Hyderabad: With the death of 20 Indian soldiers in a violent face-off with the Chinese Army in Galwan valley in Ladakh region early this week, the popular sentiment in the country has turned against China. There is a growing clamour among the people to boycott Chinese products as Chinese companies make money from India while the Chinese government and its military establishment continue to target India at the border.
Trade experts, however, believe that keeping the Chinese companies out of government contracts will be a more effective manner to punish China economically rather than trying to curb Chinese imports, which may be difficult due to the norms of international trade.
“We should send a clear message that Chinese companies are not allowed in India’s strategically important sectors like telecom, power, railways and ports,” said Ajay Dua, former Commerce & Industry Secretary.
Ajay Dua, who was India’s chief negotiator at WTO trade talks, clarifies that these sectors are not covered under free trade rules of the global trade body.
“WTO rules do not apply to exports related to such projects,” he told ETV Bharat. “You can do anything in government procurement.”
He says government procurement is sometimes covered under bilateral or multilateral agreements but there is a lack of clarity whether government projects are covered under WTO trade rules or not.
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“Most countries are not complying with the WTO trade rules in case of government procurement,” clarified the former bureaucrat who has worked extensively on the global trade issues.
“The government can ask BSNL-MTNL not to procure Chinese telecom equipment. It can also ask the Railways, High Speed Railway Corporation and entities like Delhi Mumbai Dedicated Freight Corridors that they should not give any contract to Chinese companies,” he added.
Chinese companies are active in government sector
According to a PTI report this week, the Union government asked BSNL to rework its tenders to keep Chinese companies out of strategically important telecom sector of the country.
The decision was taken after a controversy erupted following the government’s decision to award a contract for building a tunnel in Delhi-Meerut Regional Rapid Transit System to a Chinese company Shanghai Tunnel Engineering Company (STEC), which emerged as the lowest bidder.
Although, later the Ministry of Housing and Urban Affairs (MoHUA) clarified that the tender had not yet been finalized. In this case, the bids were asked much before the hostilities broke out between the two countries and also before the announcement of Atma Nirbhara Bharat Abhiyan, but social media users criticized the announcement as anti-China sentiments were running high in the country after the videos of brawls between Indian and Chinese soldiers in Ladakh region surfaced last month.
Swadeshi Jagran Manch (SJM), an advocacy group considered close to the ruling Bharatiya Janata Party, also demanded cancellation of the tender to the Chinese company.
In a tweet, Ashwani Mahajan, co-convener of Swadeshi Jagran Manch said that the need of the hour was to ‘boycott Chinese products, stop endorsing Chinese brands, and the government should stop Chinese imports, Chinese investment and tenders to Chinese companies for infrastructure including the proposed tender to the Tunnel Engineering Company’.
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New Delhi based developmental economist Ajay Dua clarifies that the rules of international lending institutions such as the World Bank and Asian Development Bank (ADB) do not permit such discrimination.
“The problem arises when these projects are funded by international agencies, then we will have to look at their rules,” Ajay Dua noted.
Railways, MMRDA cancel tender of Chinese companies
After a controversy erupted over awarding the government work to Chinese companies, Indian Railways decided to cancel a Rs 471 crore tender given to a Chinese company - Beijing National Railway Research and Design Institute of Signal and Communication Group. The tender was given in 2016 and this week Railways decided to terminate the contract citing ‘poor progress’.
According to reports, the Mumbai Metropolitan Region Development Authority (MMRDA), has also decided to cancel tenders given to two Chinese companies - China Rail Road Corporation and Build Your Dream – for Mumbai’s Monorail project.
