India’s government is finalising rules to cut down visa delays for Chinese technicians, responding to complaints from businesses who say the restrictions are hurting the country’s ability to become a manufacturing hub.

The Department of Promotion of Industry and Internal Trade is working with the ministries of home and external affairs to put in place a framework that will fast-track visas for engineers and technicians needed to install Chinese-made machines in Indian factories, people familiar with the matter said. The aim is to cut down the visa processing time to within 30 days from the four to five months it currently takes, the people said, asking not to be identified as the discussions are private.

Prime Minister Narendra Modi’s government imposed strict rules on China following a deadly 2020 border clash between the two nations that led to a downward spiral in relations. Hundreds of Chinese apps were banned, approvals for Chinese investments and visas slowed and direct flights between the two countries were cut. Local media estimated that India issued just 2,000 visas to Chinese nationals in 2024 from about 200,000 before the pandemic in 2019.    

There are ongoing talks to resolve the border crisis but ties remain strained, with New Delhi insisting relations can’t return to normal until the dispute is settled.

The government is planning to streamline the visa process by allowing all companies in targeted sectors that receive government subsidies to apply for business visas for Chinese workers, people familiar with the matter said. Under current rules, only manufacturing businesses that have won approval under the incentive programme can apply for business visas for Chinese workers, with the rest forced to apply for cumbersome employment permits, which require extensive paperwork.

India’s Ministry of Home Affairs and Department of Promotion of Industry and Internal Trade didn’t immediately respond to requests for information.

India remains heavily reliant on imports from China, especially machinery needed in manufacturing. The Chinese engineers are typically needed to install the equipment, conduct repair work and train Indian workers on their use.

Businesses say the government’s hard line on Beijing appears to be undermining India’s manufacturing push and the billions of dollars in subsidies paid to electronics, cars and pharmaceuticals makers. Modi has sought to make India an alternative manufacturing hub to China, especially in electronics, with companies like Apple Inc setting up production facilities in the country in recent years.

While the government has streamlined the visa process for businesses under the incentives programmes, executives say there are still significant challenges.

A top executive of an electronics manufacturing company based in Noida, close to the capital New Delhi, said the visa restrictions are leading to escalating costs, investments being blocked and a loss of credibility of Indian firms as reliable suppliers. The person asked not to be identified in order to speak freely on the matter.

The India Cellular & Electronics Association estimates the border standoff with China has cut production in the sector by about US$15 billion from 2020-2023 and led to a loss of 100,000 job opportunities. The association counts Apple and its suppliers as well as Chinese smartphone firms such as Oppo and Vivo among its members.

“The industry is very cognizant about the nation’s security requirements but at the same time, transfer of skills, investments, technology transfer, absorption of technology etc, are critical for achieving” India’s economic goals, said Pankaj Mohindroo, chairman of the association.

Mohindroo said government action against Chinese firms have also impacted the industry as not many Chinese nationals are willing to travel to India to explore business opportunities. The Modi government widened its probes against firms such as Xiaomi Corp and Vivo for alleged tax evasion and money laundering since the border dispute.  

“We are cautiously optimistic that this matter will be resolved in the best interest of the industry and the nation in a timely manner,” Mohindroo said.

  - Bloomberg