Govt mulling relaxing security rules for Chinese investment, MHA holds series of meetings

India is mulling relaxing tough security conditions applicable for investment from China and extend visa on arrival facility to Chinese tourists ahead of Prime Minister Narendra Modi’s visit to that country in May.

The Home Ministry has held a series of meetings with all stakeholders to examine the possibility of relaxing the stringent security clearance conditions for Chinese investment in sectors like telecom, power and nuclear energy. The initiative has been taken following active interests on part of the Prime Minister’s Office and the External Affairs Ministry which want new relaxed security conditions in place before Modi’s visit to China sometime in May, official sources said.

Chinese companies face tough security reviews for investment in telecom, power, nuclear energy, ports and petrochemical sectors in India. Chinese business executives also face visa restrictions.

Indian security establishment has been expressing concern over alleged links between the Chinese army and intelligence agencies with their companies, particularly in the telecom sector.

But the Home Ministry has been told that stringent security clearance rules are contrary to Modi’s ‘Make in India’ campaign.

There have been reports that telecom giant Huawei had to wait for two years for getting security clearance after it began building a facility in South India.

In the past, import of telecoms equipment from China was temporarily blocked by India over concerns that it could compromise communications security.

Some Chinese companies reportedly had to wait over three years before they were allowed to do business in India.

In one instance, the sources said, one Chinese firm could open a bank account only after one year of submitting the application.

Chinese military assistance to Pakistan and Chinese help in building ports and other infrastructure in India’s neighbourhood have been causes of concern for New Delhi.

Beijing has already conveyed to New Delhi about alleged lack of level-playing field in India for Chinese investment, particularly while giving security clearance, the sources said. Last year, India had launched a visa-on-arrival facility for more than 40 countries, including the United States and the United Kingdom, but did not include China in the list.

Chinese officials have rued to Home Ministry officials that the country has been put at par with Pakistan, Afghanistan and Iran.