3,560 companies in India have Chinese directors: It is futile to trust China for anything. Jawahar Lal Nehru did, and we saw the 1962 war. More recently, we saw how our distrust of them paid off in Tawang. The Chinese PLA were beaten black and blue. Despite such a history with the dragon, we have not been able to protect India’s data. Chinese economic spies are constantly keeping an eye on it.
Chinese companies and directors in India
Recently, the nation was shocked when it learned the extent to which the Chinese have infiltrated our economy. Rao Inderjit Singh, Minister of State for Corporate Affairs, informed that a total of 3,560 companies running their operations in India have Chinese directors. Basically, whether the company will be loyal to India or China is being decided by people who have Chinese citizenship.
If that is not enough, Chinese companies are also operating in India. The Ministry of Corporate Affairs has registered a total of 174 companies as foreign ones having a place of business in India.
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India’s tryst with Chinese money
Given the level of distrust Chinese companies enjoy in India, the number is staggering and concerning. It is not that we have always been wary of Chinese companies and money. In fact, India has welcomed Chinese money, products, and people with open arms in the past. In the first two years of PM Modi’s tenure, Chinese investors poured in nearly $1 billion of FDI into India.
But Jinping decided to leverage India’s trust for his strategic gains. India-China tensions started to rise. It was reflected in a 64.5 percent decline in Chinese FDI between FY16 and FY20. At the end of FY20, Chinese investments were largely limited to the automobile and metallurgical industries.
Among these declining numbers, Chinese investment in India’s electronics was (and still is) a worrying trend. When overall investment saw such a drastic reduction, Chinese investment in electronic sectors increased from $2.26 million to $54.2 million.
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Data theft is a recurring phenomenon
This is problematic on so many levels. The biggest threat is that of data theft. Every bit of our data poses a grave risk of going to mainland China. In 2020, 80 percent of smartphones used by Indians were made in China. Exuberant features at low prices as a result of lower manufacturing costs became the key pillar on which Chinese dominance is built. Xiaomi, Oppo, Vivo, and Realme still dominate the Indian market.
These or any of the Chinese companies are more loyal to the Chinese state than India. This is part of the way CCP operates. When it opened its gates for controlled capitalism during Deng Xiaoping, the “control” factor was that they would have to abide by the rules of the state.
Time and again, reports of Chinese companies passing on Indian data to their Communist masters have surfaced. The Defense Ministry even asked Armed Forces personnel to stop using certain Chinese apps.
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The government has done well, but that is not enough
On its part, the Indian government tried to choke them by tightening the rules for Chinese FDI in India. In April 2020, India refused to give direct approval to Chinese companies. Now, even if they invested in an automatic route, Chinese companies would have to ask for approval from the government.
After the Galwan valley misadventure of Jinping, the norms became so tight that even the transfer of a single share by a Chinese was subject to the government’s direct involvement.
Resultantly, Chinese investments in India have taken a big hit. Files of Chinese FDI proposals kept moving in secretariats for more than nine months. Only in February 2021 did India start to clear these files. During this time period, Indians became proactive and started to throw out made-in-China products from Indian markets.
Chinese manufacturing has taken an extreme hit from the common Indian population. India is also benefiting from it, as we are now importing more raw materials than ever to boost our manufacturing. This could be one reason why the government got lethargic. It seemed to have left Chinese investment on the vigilante of 1.35 billion Indians. It does not work like that. Government needs to match shoulder-to-shoulder with its citizens.
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