Anushka Saxena
Welcome back to ‘Three Thing Thoughts’! In this section, I cover three interesting pieces of news or commentary about India, published by Chinese media platforms in the last week. In today’s edition, the common thread running across three selected pieces (and a short accompanying one) – an opinion (and a preceding news piece on Guancha), an interview in Sputnik Chinese, and a news item from Sina Finance – is that even though Beijing generally maintains an underconfident perception of India’s trade, investment, and manufacturing policies both domestically and vis-à-vis itself, Delhi is gradually adjusting and opening up to China.
The Guancha comment is telling of the view around FDI and India’s high rate of rejection of Chinese investment in particular. The Sputnik interview with Qiu Yonghui (郁永辉), chief expert at Sichuan University’s Center for China and South Asia Studies, sheds light on how some Chinese analysts view the resumption of border trade across Nathu La and Lipulekh passes. The Sina news piece simply spells out a bill proposed in the Indian Parliament, but the discussion around it matters for interesting reasons. Let’s get into it!
On August 10, Guancha’s Zhang Yaqi published a comment that drew heavily on quotes from Indian businesspersons in Nikkei Asia and The Hindu, and argued, “raw materials, equipment and funding are all pitfalls” (原材料, 设备, 资金全是坑). Unlike the Tencent piece from our last edition, which announced India’s solar PV manufacturing scene dead on arrival, this particular comment gloats less and attempts to drive home the point that India cannot build a rare-earth magnet manufacturing capacity without China and compete with it, based on Indian individuals’ statements alone.
The piece speaks to some interesting numbers. For example, the Japanese supplier ULVAC holds over 70% of the global market share for vacuum sintering and vacuum melting furnaces – the infrastructure used for alloying and magnet production. India’s NAN MagneTech buys from Japan and apparently faces roughly a 15-month delivery cycle. Lohum, another Indian firm, buys the same brand from ULVAC’s production base in China and reportedly receives products in 6 to 7 months. And Japanese-sourced equipment can cost up to three times more. Hence, an Indian firm that focuses on de-risking may have to wait two and a half times longer and pay triple, and one that gets equipment on a workable timeline is buying Japanese-branded machines made in China. The opportunity to weaponise interdependence is, again, right there.
With 72,179 reads and 1,457 shares in less than a day, the idea behind the piece is gaining real traction. In a bid to prevent any positive sentiments towards China proposing rare earth magnet investments in India, a fascinating comment from a netizen invokes a controversy from 2024 involving the Chinese firm Baoding Tianwei Baobian Electric (保变电气)’s exit from the Indian market:
Baoding Baobian entered the Indian market in 2012 by establishing a JV with the Indian firm Alstom T&D India to locally manufacture high-voltage transformers. The arrival was intended to localise production and capture India’s growing power equipment market. The company reportedly invested roughly 465 million yuan (~US $70 million) and held a 90% stake in the JV.
But soon, India’s power sector increasingly started favouring domestically manufactured equipment, making it slightly challenging for foreign suppliers to compete, especially for government projects. Moreover, the 200 engineers Baobian apparently trained later joined Indian companies. Eventually, it decided to withdraw from India. The cautionary tale invoked indeed speaks to tensions evident in China regarding enhancing technological and manufacturing investments in India.
A connected, and slightly less sneering publication from Guancha, dated August 4, was an “exclusive report” by Zhang Hongri on a theme that has dominated discussions on India-China trade in the past five years – Indian restrictions on Chinese investments. The peg is an August 1 report published, again, in The Hindu. Citing the Centre for Digital Economy Policy, the piece notes that between 1991 and 2020, the Directorate General of Trade Remedies sent 1,052 anti-dumping recommendations to the Finance Ministry, of which five were rejected – a rejection rate of about 0.5%. After 2020, that rate climbed to between 50% and 62% across the 2020-2023 fiscal years, and stood at 41.5% for FY2025-26 as of the end of last year. Cases involving Chinese goods, the piece adds, have accounted for 72% of all rejections between 2000 and 2025.
Additionally, an anonymous Indian official arguing in The Hindu that China’s share of rejections is high because China’s share of investigations is high, is also quoted by Guancha, likely for two reasons. One is, to further the cause of reducing anti-dumping measures against China just because it sends in more proposals. Two, to highlight that despite the general increase in anti-dumping recommendations rejection rate, China still continues to be targetted out of all other investment partners to Chinese audiences.
Nonetheless, the piece interprets a few recent decisions as positive trends in India’s investment policy towards China. One is the March 2026 Cabinet decision permitting companies with Chinese equity of up to 10% to enter via the automatic FDI route. The second is the July 2026 clearance of four firms with Chinese ownership or links to bid for power/ energy projects – a clear break from the Baobian case study alluded to above. The third is the July 23 relaxation of e-commerce FDI, even if it is just for export-only inventory. Read in juxtaposition, these are being viewed in China as a single, favourable policy shift.
Then, there’s the Sputnik Chinese interview from August 5, wherein Qiu hails the resumption of border trade at Nathu La and Lipulekh passes on August 1, after 6 years of an imposed halt following the Covid-19 Pandemic and the Galwan Valley clashes.
Qiu’s BLUF is that this is “an important signal and measure demonstrating that India is moving in the same direction as China” (相向而行), and she is careful in locating the meaning in signalling rather than the actual value of commerce. Per the figures the story provides, Nathu La’s total two-way trade in 2019 – the last full year before suspension – was about 73 million yuan (~US $10 million), with all India-China border ports together amounting to roughly a few hundred million, against total bilateral trade that year of approximately 639.5 billion yuan (~US $95 billion). She hence argues that the scale is small and the commodity range is limited, even as she is sanguine about the expansion of both once there is some stability and enough time on each side’s hands.
Two interesting perspectives she offers merit attention. The first is that she looks at Indian media’s coverage of the reopening (starting with ANI) and interprets it as Delhi exploring a strategy of “appropriately decoupling the economy from security” (经济与安全适度脱钩) – a deeply preferred Chinese proposition. Hence, she assumes that the Indian media is expressing popular policy sentiment, without accounting for the possible existence of both disinterest and nuance. The second is her reference to the upcoming BRICS Leaders’ Summit in New Delhi in September. In its light, she talks about the resumption of the mutual-market border trade as “preparation” for high-level meetings.
Finally, on August 4, Sina Finance carried a Global Market Report item on India’s proposal to extend the tax exemption for foreign firms supplying equipment to Indian contract manufacturers from 2031 to 2041. It is really interesting that the piece is pegged to a bill that has yet to become law but was described by the Finance Ministry as “urgent.”
The piece covers phones, tablets, laptops, servers, and wearables, and names Foxconn and Tata Electronics as examples of companies to which the exemption would apply. Further, it expounds a forecast by Counterpoint Research that Apple could account for a record 26% of global iPhone shipments through India in 2026, up from 22% in 2025 and 6% in 2022, with the research firm’s vice-president noting that local policy support is accelerating “China plus one”. But there are no alarmist tones on sight with either the China+1, or the ‘Make in India’ policies.
What is important to note is that the piece was published by the ‘US Equities’ desk. It seems like it was filed as a success story for Chinese retail investors of Apple, not as a piece rebuking India’s de-risking and self-reliance efforts for Chinese netizens interested in politics and geopolitics. It simply argues that 2041 is “long enough to accommodate investment payback cycles” and that the measure is a necessary correction of “India’s own disadvantages.” Not to mention, it implicitly accounts for the fact that a vast array of Chinese equipment manufacturers themselves supply vital components to the Indian Apple manufacturing floor.
When this is set against, say, a recent 36Kr piece on India waiving duties on wireless charging modules, lithium cells, and automotive displays from July 9 through 2029, China’s two stories about India become apparent. In this piece, commentator Wang Xinxi frames the tax exemption as stemming from India’s fears of Apple’s relocation. It talks about how India only offers ~15% local electronics content for manufacturing an iPhone, while China offers 90%+. Further, unlike the Sina piece, which implicitly hails the exemption as beneficial for Chinese input suppliers in India, Wang adopts a tone of contempt and shows how dependent India is. He argues that of the 85-90% of components imported for an Indian-manufactured iPhone, roughly 56% are from China. He exclaims, and maybe rightfully so:
“What an ironic cycle: India claims it wants to replace China as the world’s factory, yet its factories cannot function without Chinese components.”
To some extent, all three of this week’s items describe economic doors India has opened to China – whether it be trade “remedies” rejected, mutual-market border trade reopened, or tax exemptions elongated. It is now time for the Indian reader to ask, which door will Beijing open?
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Eye on China is a weekly newsletter curated by the Geostrategy Programme at The Takshashila Institution, a public policy think-tank based out of Bengaluru, India.
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