Chinese investment in India may fall due to border conflict, analysts say

Since 2010, China has committed or planned more than US$26 billion worth of investment in India but some of that may now be in jeopardy

Public sector construction projects ‘will be tougher for Chinese companies to bag, but private ones will still be largely driven by cost considerations’, analyst says

Reading Time:2 minutes

Anti-China sentiment in India could hurt Chinese firms doing business there. Photo: AFP

Published: 3:00pm, 25 Jul 2020Updated: 4:12pm, 30 Jul 2020

Chinese companies in India are bracing for tough times ahead, with some of them scaling down operations or cutting jobs as relations between the two countries worsen.

While analysts say the business environment should improve in the long term, Chinese firms in India are suffering because of the coronavirus outbreak and the Himalayan border dispute.

Since the military clashes began in the Galwan Valley – in which at least 20 Indian soldiers have died – India has imposed tighter limits on Chinese investment in projects such as railways, motorways and telecoms, and blocked Chinese apps like TikTok and UC Brower.

Since 2010, China has committed or planned more than US$26 billion worth of investment in India, according to a report published in March by the Washington-based research group Brookings Institution, with infrastructure projects accounting for about half the total.

However, that figure may drop after India’s transport ministry barred Chinese companies from government road projects earlier this month.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x