India China border tension May slow down Domestic manufacturing

Last updated on February 14th, 2023 at 11:21 am

According to industry experts, the recent unpleasantness between the Chinese and Indian armed forces is going to have a heavy impact on the Indian manufacturing industry.

This is primarily because the tension escalated on the border has led to obvious trade restrictions as well. Experts are of the opinion that this escalating is a ploy by the Chinese side to restrict and hamper India’s initiatives to ramp up their economic development amidst the Covid-19 crises. Many industries have decided to wind up business in China and move their operations to India and other South East Asian countries instead.

Creating disharmony over the annex part of Tibet, China has notoriously entered the Indian sides, entering the union territory of Ladakh and have reportedly started violent clashes in the state of Sikkim. On many occasions, Chinese troops have initiated agitative moves to pick a fight with the Indian counterparts.

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Another move which seems to have rubbed the Beijing the wrong way is India’s move to in April to revise its foreign investment policy that helps it tighten investment rules for companies sharing a land border with India. This development was followed by China central bank increasing its stake in housing finance lender HDFC when share prices are cratering around the world as a result of the pandemic. On the larger bilateral trade front, industry experts don’t feel there would be immediate negative impact. However, if the skirmish changes to a war like situation, then the tension could hamper both import and export deals between India and China. The latter is a huge trade partner for India.