India has significantly tightened its visa policies for Chinese nationals following the Galwan Valley clash between the Indian Army and the People’s Liberation Army (PLA) in June 2020. This shift aligns with the Modi government’s emphasis on national economic security and a strategic push for self-reliance under the “Atmanirbhar Bharat” initiative.
Key Points:
- Visa Issuance Decline:
- In 2019, before the pandemic and the Galwan clash, India issued approximately 200,000 visas to Chinese nationals.
- By 2024, this number plummeted to around 2,000, reflecting a comprehensive reassessment of Chinese investments and increased scrutiny.
- Economic Impact and Trade Deficit:
- Despite a significant reduction in visas, India has faced a substantial trade deficit with China. In the first five months of 2024 alone, India’s trade deficit with China exceeded $38.11 billion.
- Exports to China amounted to $8.93 billion, while imports from China were valued at $47 billion during this period.
- Sector-Specific Visa Issuance:
- Over the past eight months, about 1,500 visas have been granted, primarily to support the Indian electronics industry, which has been significantly impacted by the visa restrictions.
- The Indian electronics sector has faced job losses due to the limited access to Chinese technicians and workers.
- Regulatory and Security Concerns:
- Post-Galwan, investigations revealed regulatory violations by Chinese companies such as Vivo, which faced accusations of tax evasion and illegal fund transfers.
- The Indian government maintains a stringent vetting process for visa issuance to ensure compliance with national security and regulatory frameworks.
- Growth in Exports:
- Despite challenges, India has seen a growth in its merchandise exports, with a notable increase in the export of petroleum products, engineering goods, and electronics.
- The Production Linked Incentive (PLI) scheme has bolstered the growth of electronic goods exports, which rose from $23.55 billion in FY 2023 to $29.12 billion in FY 2024.
- Ongoing Border Tensions:
- The diplomatic and military standoff at the Line of Actual Control (LAC) in Ladakh persists, with the PLA maintaining a strong presence in the region.
- Chinese naval activities in the Indian Ocean region continue, adding to the geopolitical tension.
The Indian government’s stringent visa policies and increased scrutiny of Chinese investments underscore a broader strategy to enhance economic security and reduce dependency on China, amid ongoing territorial and geopolitical tensions.
