Visa hassles, bureaucracy and politics dampen Chinese business enthusiasm for India
Visa woes and bureaucrats complicate business environment already tense from nations' rivalry
China and India have repeatedly vowed to attract investment from each other with many Chinese companies viewing the South Asian giant as a promising source of growth, but the realities of doing business in India often sour their hopes as they face red tape and distrust fuelled by the rivalry between the two nations.
Corruption and India's bureaucracy are cited as major hurdles for Chinese businessmen, with the visa-application process high on their list of concerns.
Indian Prime Minister Manmohan Singh told Premier Li Keqiang during talks last year that his country was committed to simplifying the process for Chinese to apply for visas to India, but no agreement was signed on the issue.
Liu Shujun, who heads the India operations of the China-based Longjian Road and Bridge Company, has been in the country for more than a decade. He described the visa application process as complicated. In 2009, all of the company's Chinese employees - most in India on business visas - were sent back to China by the Indian authorities over a visa issue, which resulted in the construction of an expressway being delayed by a year.
Liu was finally able to settle the matter using personal connections with Indian government officials to arrange for the workers to be allowed back, but said he has faced similar back-and-forth battles each time visas needed to be renewed. "Every time I go to the Indian embassy in Beijing, the staff there will ask for different documents," Liu said.
Madhav Sharma, chief representative of the Confederation of Indian Industry in China, said the visa problem cut both ways and there were cases when Indian companies could not get long-term visas for China.
"If they are able to follow the processes properly, it's not a big issue," he said. "The governments on both sides are now working … to see how they can further facilitate the movement of people."
Liu's company is building a 34-kilometre section of the Pink City Expressway that will link the northern cities of Gurgaon and Jaipur. The project has been ongoing for four years, but Liu said it could have been completed in China in two. Liu said bureaucracy was a major drag on business. In the course of his work, he has had to deal with 14 Indian government agencies.
Liu said China was often regarded as an unfriendly nation in India, which could result in projects by Chinese companies being subjected to longer approval processes than those from other nations.
Sachin Liu, a manager at the Chindia Chamber of Commerce and Industry, which represents more than 100 Chinese companies in India, said the nation is a lucrative market for investors, especially for infrastructure projects, but Chinese investors should be cautious in the country to avoid stirring up resentment.
"The media here can be a problem," he said, referring to reports or commentaries that are sceptical of a Chinese presence.
But Indian politicians and businesspeople believe the frustrations expressed by Chinese companies will not affect India's ability to draw overseas investors.
"India's march ahead is unstoppable," said Tarun Vijay, a lawmaker and national spokesman for the opposition Bharatiya Janata Party. "We have a high number of skilled workers and English-speaking people. And in the technology and software sector, India is marching high."
Shankar Dey, a Mumbai-based business consultant, said India has long been a market economy that upholds free-market principles and the nation's legal system was modelled on English common law, making it easier for foreign investors to navigate the business world.
Sharma said the main challenges facing Indian companies in China were rising labour costs, the appreciation of the yuan and finding staff. He said local mainland authorities could provide help to Indian companies in setting up manufacturing bases. "Local governments can help them to establish themselves in those zones or cities that are looking for investment," he said.