Chinese Visa Dip After Galwan Clash As Economic Security Takes Centrestage

The number of visas issued to Chinese nationals by India has seen a sharp drop since the border clash between soldiers of the Indian Army and the People’s Liberation Army (PLA) at Galwan four years ago, with the Narendra Modi government focusing sharply on national economic security, according to top officials and data accessed by HT.

Twenty Indian soldiers, including Colonel Santosh Babu, lost their lives at Galwan while trying to push back an attempt by the PLA to nibble at Indian territory in East Ladakh. An unspecified number of Chinese soldiers were also killed in the skirmish.

HT has learnt from senior officials in the national security establishment and economic ministries that about 200,000 visas were issued to Chinese nationals in 2019 before the pandemic struck and the June 15, 2020 Galwan clash, and that this number was brought down to just 2,000 in 2024 after a structural screening of Chinese investments in India.

However, the government in the past eight months has issued about 1,500 visas to Chinese nationals – of which around 1,000 visas have been to facilitate Indian electronics industry demands. Another 1,000 such visas are in the pipeline, most of them again for the electronics industry based on intensive screening.

The trade deficit with China crossed $38.11 billion in the first five months of the current year as India could export only $8.93 billion worth of merchandise to China between January-May 2024 while goods worth $47 billion were imported from Beijing — despite the government reducing corporate income tax and launching a ₹2 lakh crore production linked incentive (PLI) scheme in a dozen sectors to boost production.

While the Indian electronic industry claims job losses due to the denial of visas to Chinese businessmen and workers, official data released on June 14 showed India’s merchandise exports in May 2024 jumped over 9% percent on an annualised basis, driven by petroleum products, engineering goods and electronics, in that order. India exported electronic goods worth $29.12 billion in FY 2024 compared to $23.55 billion in FY 2023, largely due to the PLI scheme.

According to five top officials, the structural screening of Chinese investments post-Galwan revealed that Chinese telecommunication companies such as Vivo were violating Indian laws, and were even charged by the Enforcement Directorate for laundering funds to China to evade Indian taxes. ED has accused Vivo of siphoning about $13 billion back to China, apart from violations of visa conditions by its executives and workers.

“We are deeply alarmed by the current action of the authorities. The recent arrests demonstrate continued harassment and as such include an environment of uncertainty amongst the wider industry landscape. We are resolute in using all legal avenues to address and challenge these accusations,” Vivo said in a statement after the ED action.

While Indian industry clamors for more visas for Chinese workers and technicians, the national security establishment — including the economic ministries — are clear that visas will only be issued after vetting, as unchecked issuance of visas will hit India’s “Atmanirbhar Bharat” plan and impact domestic manufacturing.

India-China bilateral ties have been in the deep freeze since the PLA transgressions in May 2020, with Beijing still creating hurdles to the Indian Army patrolling its own side of the Line of Actual Control in Ladakh. Even after multiple rounds of military and diplomatic talks, PLA is still to de-escalate from LAC and restore the status quo ante in East Ladakh. Four years after Galwan, the Chinese military is deployed in full strength in East Ladakh, with Chinese reserves backing them from the hinterland.

The situation in the Indian Ocean Region is no different as Chinese surveillance ships are deployed in the region round the year. Even on Thursday, Chinese ballistic missile tracker Yuan Wang 7 was deployed 1,000 kilometers south of Kanyakumari and PLA Navy’s anti-piracy forces were deployed in Djibouti, Gulf of Aden and in the Madagascar channel.

One official said that with the Xi Jinping regime continuing to put pressure on India on land and sea, the Modi government had no option but to take steps to ensure the economy is less dependent on China. “India’s national economic security cannot be compromised for a few pieces of silver…. Visas will be issued for Chinese technicians and businessmen only after screening with assurance that travel conditions will not be violated,” said a Cabinet minister who asked not to be named.