/China -India: Tensions over Trade and Territory

China -India: Tensions over Trade and Territory

Indian companies have a far smaller presence in China than other major economies. But firms including Infosys, TCS, Dr Reddy’s Laboratories Reliance Industries and Mahindra & Mahindra have a foothold there in manufacturing, healthcare, financial services, and outsourcing.

A potential row over Huawei could revive tensions in the broader India and China relationship just as the two sides have been making high-level efforts to ensure their long standing territorial disputes do not escalate.

In October, Prime Minister Narendra Modi will host Chinese President Xi Jinping in the sacred Hindu city of Varanasi, his parliamentary constituency in northern India, where the two are expected to address trade issues including a $53 billion trade deficit in 2018/19 that India is concerned about.

The main right-wing group tied to Modi’s ruling alliance, which has a long-standing distrust of China and promotes self- reliance in the economy, has stepped up criticism of Huawei.

In a letter written to Modi last week, Ashwani Mahajan, the head of the economic wing of the Hindu nationalist Rashtriya Swayamsevak Sangh, said there were concerns about the operations of Huawei in India.

“We as a country are not yet sure of relying on Huawei. Globally, the Chinese companies, including Huawei, are facing allegations that they ‘underbid’ projects, and position themselves and their establishment back home to snoop and enable them to shut remotely, if required be,” he wrote.

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