Recently, India quietly approved investments by Chinese enterprises in several key sectors, seen as a positive signal of thawing relations between the two neighboring countries.
The most notable among these approvals is a joint venture between India’s local electronics manufacturer, Dixon, and the Chinese smartphone brand Vivo. They plan to jointly build a smartphone manufacturing plant in India, with Dixon holding 51% equity and thus control.
Previously, India’s Ministry of Finance also opened a door, allowing four Chinese power equipment companies already operating factories in India to participate in tenders for important government power projects. It's worth noting that, in the past, Chinese firms found it extremely difficult to enter such projects involving national strategic security.
The backdrop to all this traces back to 2020, when military clashes erupted between Indian and Chinese troops along the border. After that, India tightened its policies, requiring all investments linked to China to undergo strict government scrutiny—a rule that has remained in place ever since.
So why the relaxation now? Analysts suggest India is adopting a more flexible strategy. On one hand, India aims to rapidly develop its domestic manufacturing sector, especially in areas like smartphones and power infrastructure, where it needs Chinese technology and expertise; on the other hand, India faces mounting pressure from global supply chain reconfiguration. In short, it wants to leverage China’s strengths for its own development while maintaining control over critical sectors.
Indian experts also point out that the economies of China and India are actually highly complementary—India relies heavily on Chinese components and technology. However, India emphasizes that it remains cautious toward all foreign investments, not just those from China. This recent easing comes with conditions, primarily aimed at strengthening “Make in India.”
The evolving stance of the Indian government toward Chinese companies clearly reveals a reality: beneath rigid political and ideological barriers, economic logic proves far more resilient than imagined.
This reflects India’s pragmatic “hedging” strategy. While border tensions cannot be quickly mended, the urgent need for upgrading domestic manufacturing and transitioning energy systems cannot be fulfilled without access to China’s mature supply chains and technological capabilities. Rather than saying India is “softening,” it is learning to “cut”—strictly limiting economic cooperation with China to instrumental roles that enhance its own industrial capacity, using precise mechanisms like joint ventures with majority ownership and tender exemptions to isolate political risks.
For China, this presents both opportunity and challenge. The opportunity lies in India’s vast market potential, still highly attractive. The challenge, however, is that future collaboration will no longer be characterized by unchecked expansion but must instead comply with India’s stringent regulations and localization requirements. Chinese enterprises must adapt to this “dancing with shackles” model.
Ultimately, complex international relations always return to the practical demands of development. When ideology fails to solve issues like electricity supply and employment, pragmatic cooperation inevitably emerges through the cracks. India’s recent “small steps, rapid progress” offers a rare economic footnote toward de-escalating geopolitical tensions.
Original source: toutiao.com/article/1871909826391052/
Disclaimer: The views expressed in this article are solely those of the author.