Chinese businesses that operate in India or have bagged contracts for projects in the country may face trouble due to the recent violent provocation at Galwan Valley in Ladakh.

New Delhi, June 17:

The government is planning a series of tough economic measures against China after the recent provocation by the neighbouring country’s army in Ladakh’s Galwan River Valley region.

Chinese businesses that operate in India or have bagged contracts for projects in the country may face trouble due to the recent violent provocation that started Monday night.

While the government had earlier pacified citizens who called for a ban on Chinese goods, the death of 20 Indian soldiers after the fresh confrontation may lead to a drastic change in stance.

There could be a two-level economic retaliation, according to government sources who spoke to India Today TV on conditions of anonymity.

Direct action

The first plan involves direct action. Projects, where work orders have not been allotted after the financial bidding, will be scrutinised and Chinese stakes may be in trouble, according to sources.

Projects where the work allocation has already happened, however, can not be acted upon.

The first economic blow could affect the successful financial bid by a Chinese company, Shanghai Tunnel Engineering Co Limited (STEC), for the construction of an underground stretch of Delhi-Meerut RRTS (Regional Rapid Transit System) project.

Top sources in the ministry of road transport and highways told India Today TV that the matter is being examined and “a decision that may hurt the Chinese company’s prospects could be taken”.

STEC emerged as the lowest bidder for the construction of 5.6 km underground section between New Ashok Nagar and Sahibabad, which is part of the Delhi-Meerut RRTS corridor, on June 12.

The project is being managed by the National Capital Region Transport Corporation or NCRTC. The corporation had opened online financial bids submitted by 5 bidders last week.

Five Indian and multinational companies had submitted their bids for the project.

As per NCRTC, the results of the financial bids show that STEC — by quoting a figure of Rs 1,126 crore —qualified as L-1. Indian company Larsen & Toubro (L&T) was listed as L-2 as it quoted Rs 1,170 crore.

Interestingly, the tendering happened in November and the opening of the financial bids took place in the second week of June when Indo-China face-off in Eastern Ladakh was at its peak.

Even before the opposition could train its guns against the govt over the success of the Chinese bid, the BJP’s affiliate in the Rashtriya Swayamsewak Sangh (RSS), the Swadeshi Jagran Manch (SJM), demanded the Narendra Modi government to cancel the bid.

Making domestic players stronger

The other change in the offing is at the eligibility level for Indian contracts. Top sources in the govt said that Chinese companies used to edge out India entities in global bids due to the stringent clauses set in the tenders.

There have been many instances where Chinese giants — due to their greater global exposure and experience — used to bid low and beat domestic players.

A senior source in an infrastructure ministry said, “The ground eligibility rules are going to be changed to make domestic players eligible. The technical norms for project tenders need a serious relook. This can act as another level of filtering.”

The other measure would be to study the bids and screen bids to identify Chinese players. The govt plans to reduce the ease of doing business for Chinese through a method of filters

In April, the Indian government amended the foreign direct investment (FDI) rules for bordering nations, including China.

FDI from these countries will now have to go through the Indian government’s checks instead of a more direct route, and the move has been touted as an attempt to protect Indian companies.