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Doklam effect? How India plans to make going tough for Chinese firms 

By PN Team Posted on Aug, 19 2017

Thousands of kilometres away from Doklam where the Indian and Chinese troops are locked in a tense standoff, the Centre is quietly working on a plan that could hit the 'dragon' where it hurts the most. 


India is redrafting, and in some cases tightening, rules for business in sensitive sectors such as power, telecom and electrical equipment supplies, making it difficult for Chinese firms to enter and compete for contracts in the same. 

On Friday, CEA chairman R K Verma told the authority was working on a report to secure India's power systems, but stressed, “It is not against any one country but against all those who want to harm or tamper with our system.“ 

Interestingly, power minister Piyush Goyal, in an interview, said his government would invoke the principle of reciprocity when awarding future contracts, which some industry experts read as a move to keep foreign firms, especially the Chinese, out of strategic sectors. 

Verma declined to comment on the conditions CEA is prescribing. But a Reuters report said the conditions could require companies to have been present in India for 10 years, have Indian citizens at the top, and a certain period of Indian domicile for employees. Companies may also be asked to disclose source of inputs for transmission systems and mandatory tests for malware. 

The Centre is also simultaneously on the telecom sector, demanding higher security standards in an area dominated by Chinese makers of equipment and smartphones. 

Last week, the ministry of electronics and information technology has asked 21 smartphone makers, most of them Chinese, to provide details about the "safety and security practices, architecture frameworks, guidelines, standards, etc followed in your product/services in the country."


Chinese vendors such as Xiaomi, Lenovo, Oppo, Vivo and Gionee together account for over half of India’s $10 billion smartphone market. The letter, dated August 12, was also sent to Apple, Samsung Electronics and local maker Micromax, a ministry source said. 

Sunil Misra, director-general of the Indian Electrical and Electronics Manufacturers' Association, said the new rules for power transmission would help local industry and were in line with the limited access China gives to foreigners in its market. 


(Inputs from ET)

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