Gateway House estimates that Chinese investors have poured $ 4 billion into Indian tech startups since 2015.
“China expects to dominate this internet market,” said Gateway House fellow and report co-author Amit Bhandari.
South Asia head of Washington-based think tank Albright Stonebridge Group, Sukanthi Ghosh, said India was also key to China’s goal of becoming a dominant force in global tech.
“I don’t believe anyone has lost in this relationship. Both countries have benefited significantly,” Ghosh said, “and this is tied to China’s strategy of Asian hegemony and its growing competition with the US.”
But earlier this year, India signaled that China was taking steps to curb growing influence. In April, the government announced that foreign direct investment (FDI) from countries sharing land borders with India would come under further scrutiny..
Analysts say the new regulations are unclear. For example, Bhandari said investments in social media platforms would raise more scrutiny, raising questions about data storage and privacy. The government says the rules are meant to prevent opportunistic acquisitions and acquisitions of Indian companies caught in the fall from the Kovid-19 pandemic.
They also appear to be targeting China.
Pakistan, India’s main rival, India, is not investing in any meaningful way, according to Bhandari, while other countries that share a border with India are not known for making small and large investments.
“It’s directed towards China, but not in a direct way,” he said.
Bhandari said the tightening of FDI norms meant Chinese companies could still export software and hardware to India, but they would not dominate the Indian Internet ecosystem.
Basically, “China doesn’t have a free run in this market,” he said.
Government policy has initially caused some skepticism in the Indian tech sector. Border skirmishes between Chinese and Indian troops occurred in May, resulting in minor injuries to troops.
This event – at the summit of a remote mountain close to Tibet – is the latest in a long line of border fires, and has fueled the latest round of anti-China sentiment in India. At least 20 Indian soldiers were killed in clashes with Chinese troops on Tuesday, the Indian military said.
Diverting Chinese influence
China has attracted negative attention.
“If India allows narrow-minded nationalism to spread into the realm of science and technology, it will certainly hurt its own interests,” the Global Times wrote.
Chinese companies are trying to establish a long-term presence in India, and their investments in Indian companies will give them a permanent share of the market, according to a Brookings India report published in March.
“I don’t think there is a widespread understanding of how difficult it is to reduce India’s dependence on China,” said Anant Krishnan, former Brookings India associate and report writer.
“India relies on China for everything from heavy machinery and all sorts of telecom and electrical equipment, to active cement products,” said Krishnan, now a reporter with The Hindu newspaper. Estimated that.
Trade between the two countries will reach $ 87 billion in fiscal year 2018-2019, the Indian Commerce Department said. India was India’s second largest trading partner that year, behind the United States.
But the relationship is arbitrary. China exports to India.
“These are constructive dependencies on China, and deportation campaigns are not really solved,” he said.
Krishnan’s recent tightening of FDI norms is not aimed at stopping Chinese investment in India, but “about redirecting Chinese investment to more favorable regions of India – [manufacturing] Creating facilities and jobs. “
Cutting off China means job losses for Indians
Chinese smartphone manufacturers have already built factories and created jobs in India.
One of the most significant developments in China’s relations with India over the last five years is the emergence of India as the largest overseas market for Chinese mobile phone companies.
Last year, four of the top five smartphone makers in India were Chinese: Shiomi, Vivo, Oppo and RealMe, according to market research firm IDC. Samsung is the No. 2 seller of a non-Chinese brand, South Korea.
According to IDC, sales of China’s top smartphone brands will total more than $ 16 billion in 2019.
And all have manufacturing facilities in India. Doing so has allowed Chinese companies to adopt Prime Minister Narendra Modi’s “Make in India” program and avoid stringent import tariffs. Shiomi makes 95% of the phones sold in India locally.
“So if you are talking about reducing sales or shipping of these guys, it will also affect factories in India, which will” completely “affect Indian jobs,” said IDC analyst Kiranjeet Kaur.
She said that during previous cross-border skirmishes, there were campaigns calling for Indians to boycott Chinese goods. But they never made a dent in the sales of Chinese smartphones in India.
So Many Indians vow to cut Chinese hardware and software, “I don’t think this will change their buying decisions at all,” Kaur said.
“They’re based on these Chinese phone ecosystems. There are no other options.”