India to Expedite Visa Process for Chinese Technicians Amid Industrial Concerns

India is finalizing measures to expedite the visa process for Chinese technicians in response to concerns from several companies. These companies argue that the central government’s restrictions on granting visas to Chinese technicians are undermining the nation’s industrial aspirations. 

In June 2024, it was reported that New Delhi is considering extending visa relaxations to meet the needs of domestic manufacturing facilities that are installing Chinese machinery. However, the new visa regulation guidelines are yet to be officially notified.

New visa guidelines for Chinese technicians yet to be finalized

Businesses based in India claim that the current visa restrictions are hindering the country’s potential as a manufacturing hub. The Department of Promotion of Industry and Internal Trade (DPIIT) is collaborating with the Ministry of Home Affairs and Ministry of External Affairs to create a framework that will expedite visas for engineers and technicians required for installing Chinese-made machinery in Indian factories.

The objective is to shorten the visa processing time from the current 4-5 months to within 30 days, according to sources familiar with the discussions, who requested anonymity due to the private nature of the talks.

Several reports published June 17 noted that India will grant visas under new standard operating procedures (SOPs) to technicians from China for around six months. The time period is considered sufficient for foreign technicians to install the machinery at a facility and train Indian workers in its operations (installation, repair, and use).

As per a government official, India is trying to create a better and more streamlined SOP and is hoping to roll it out after receiving clearance from the Inter-Ministerial Committee (IMC) for capital goods. The IMC was formed in 2020 to address issues and bottlenecks in the capital goods (CG) sector. It comprises representatives from all relevant Ministries and Departments and meets regularly to discuss and resolve sector-related challenges.

Local media have reported that India issued only 2,000 visas to Chinese nationals in 2024, compared to about 200,000 before the COVID-19 pandemic in 2019.

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In 2023, India had rolled out updated SOP guidelines aimed at accelerating the visa clearance process for Chinese nationals employed in industries where the government implemented a production-linked incentives program (PLI) to expand domestic industrial capabilities. Nevertheless, delays persisted, and vendors and local manufacturers repeatedly requested simplifying the visa process for Chinese technicians and experts.

India first introduced the PLI schemes in 2021 to bolster manufacturing capacity in 14 industries: white goods, food products, drones, advanced chemistry cell batteries, medical devices, white goods, textiles, food products, automobiles, and specialty steel. As of March 2023, the schemes have paid out INR 970 billion (US$11.6 billion) to recipients, with a total budget outlay of INR 19,700 billion (US$23.61 billion).

Geopolitical tensions create barrier for India’s manufacturing units

During the COVID-19 pandemic, India issued Press Note 3 in April 2020, to amend the Consolidated Foreign Direct Investment Policy of 2017 (the “FDI Policy”) with a stated view of curbing opportunistic takeovers and/or acquisitions of Indian companies. This meant that all foreign direct investment (FDI) from countries which share a land border with India (the “Border Countries”) shall be subject to prior approval from the Government (“Approval Route”).

Now, after giving the go-ahead to joint ventures like that between JSW and MG Motor India, the Indian government could approve Chinese companies ‘diluting their stakes’ in Indian firms. This decision would be reportedly made on a ‘case-by-case’ basis as managing security concerns is still a top priority for New Delhi. If implemented, Chinese entities like Xiaomi could expand their India operations.

Of 450 FDI proposals received from Chinese companies since 2020, the Indian government has only approved 15 percent (around 70 projects); decision is pending on 200 proposals. Those who secured approvals were considered essential, such as for the production of iPhones in India.

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Relations between India and China have stayed sour ever since soldiers from both sides clashed on the Himalayan border in 2020 and, more recently, when China’s President Xi Jinping missed the G20 Summit held in New Delhi in September 2023.

Upon Prime Minister Narendra Modi’s re-election, re-appointed Minister of External Affairs S. Jaishankar reaffirmed New Delhi’s commitment to “finding a solution for the border issues” with China. A day later, on June 12, the Spokesperson of the Chinese Embassy published a post on X (formerly, Twitter): “#China and India are important neighbouring countries. Relevant border issues should be handled properly. A sound and stable #ChinaIndia relationship is in the interest of both countries, and conducive to the peace and development in this region and beyond. China is willing to work with India to push forward bilateral relations in the right direction.”

Delay in visa approval process hurting manufacturing capacities of Indian companies in India

Companies feel that India’s industrial goals and the significant subsidies provided to manufacturers of electronics, automobiles, and pharmaceuticals are being undermined by the current restriction placed by the central government on China. Indian Prime Minister Narendra Modi has aimed to position the country as an alternative manufacturing hub to China, with companies like Apple Inc. establishing production facilities in the country.

Domestic manufacturers have claimed that visa restrictions against China are driving up costs, preventing investments, and diminishing Indian companies’ standing as trustworthy suppliers.

The India Cellular & Electronics Association (ICEA) estimates that the border standoff with China has resulted in a US$15 billion production loss in the sector from 2020-2023 and the loss of 100,000 job opportunities. ICEA chairman Pankaj Mohindroo has emphasized that although the association recognizes India’s security needs, the central government’s actions against Chinese firms have deterred many Chinese nationals from traveling to India for business opportunities.

Visa approval process

Over the years, the visa approval process for Chinese ventures and Chinese expert personnel has become more rigorous as it requires prior approval from the Indian central government.

At present, the Ministry of Home Affairs is vetting SOPs for visas for Chinese experts required by manufacturing units beyond PLI sectors in India.

While some relaxation might come on visas, the government appears not to be looking at other relaxations on conditions to facilitate Chinese presence in the Indian economy, including investment concessions.

Media reports quoting electronics industry executives claim that 4,000 to 5,000 visa applications of Chinese technicians are awaiting central government clearance. These reports also said the restrictions have cost India around US$15 billion in production losses in the past four years.

Documents required for India Business Visa:

• Original (or copy) of the dispatch letter from the Company of the applicant
• Business license of applicant’s company and its authenticated English translation or CCPIT Registration Certificate of Incorporation
• A letter of request from any of the FAOs or SASAC or MFA (or any other duly authorised Chinese organisation) [This is applicable for applicants who are working with State Owned Enterprise (SOE) ]
• Business Visa Proforma be obtained from Indian Visa Application Centre.
• Certification of incorporation or registration of the Indian company or PAN of Indian company
• Itinerary of visit
• Sponsorship letter issued to the applicant by the Indian company for the grant of Business Visa under any specific schemes of the Government of India.
• Bank Guarantee Certificate of minimum amount of RMB 1,00,000 or last 6 months of bank statement showing a minimum balance of RMB 1,00,000

Source: Embassy of India, Beijing, China

India’s industries rely heavily on Chinese specialists because no other nation can provide the quality experts needed, and the majority of the machinery and components are imported from China. Taiwan, which leads the world in electronics, too, needs to depend on Chinese professionals. Chinese experts’ permits are also being sought after by Taiwanese technology makers operating in India. 

Conclusion

India must work on relaxing the visa norms for Chinese technicians more swiftly with domestic manufacturers facing challenges such as lack of trust from suppliers and dip in investments from China. Since China continues to be a major source of expertise for India’s manufacturing sectors, streamlining the visa application procedure is essential to sustaining the growth of the country’s industrial sector. This is also particularly important for the success of varied PLI schemes and keeping foreign investment coming into the country. Despite the geopolitical tensions and stringent approval processes that have historically hindered Chinese ventures, the necessity of Chinese specialists remains paramount to Indian industries. While India is committed to fostering a conducive environment for domestic manufacturing, it must navigate complex international relations more carefully.

With inputs from Melissa Cyrill.

(US$1 = INR 83.44)

The article was originally published on June 20, 2024. It was last updated on July 19, 2024.

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