National security planners have uncovered significant irregularities in the operations of Chinese companies and the importation of Chinese products into India, according to sources familiar with the matter. These irregularities range from improper documentation for visas to evading local taxes and bypassing scrutiny by the Ministry of Home Affairs (MHA).
Indian intelligence and financial investigation agencies have revealed large-scale misuse of the e-visa scheme prior to 2020. Some Chinese nationals overstayed their visas without mandatory renewals and traveled to sensitive border states and union territories such as Arunachal Pradesh and Jammu & Kashmir. Officials from three ministries, who spoke on condition of anonymity, expressed concern over the exploitation of the current visa regime by Chinese companies. These firms often mis-declare visa categories, applying for business visas for activities that should require employment visas.
In addition to visa violations, there is growing apprehension about the economic impact of importing billions of dollars worth of furniture, lighting, fixtures, and sanitaryware from China. This influx has harmed local industries, similar to how Chinese telecom companies once dominated the Indian market, affecting domestic phone manufacturers. A troubling pattern has emerged where Chinese firms claim “Make in India” benefits to establish units in India, yet import or source up to 80% of parts from China.
The issue extends to Chinese firms operating in India for nearly two decades. Officials have refrained from naming these firms until formal complaints are registered and action is taken. Concerns over the quality of Chinese products have also been noted, with many products being cheaper but of inferior quality compared to Indian counterparts. In response, the Modi government began issuing Quality Control Orders (QCOs) through the Union Commerce Ministry post the Galwan clash in June 2020 to set benchmarks and enforce standards.
Visa statistics further highlight the issue. In 2018, 47,000 business visas and 150,000 e-visas were issued to Chinese nationals. By 2019, the number of business visas dropped to about 19,000, while e-visas surged to 200,000. Post-pandemic, the Union government significantly reduced visa issuance, with only 2,500 business visas and 3,000 e-visas granted to Chinese nationals in 2023-24. Officials indicated that these numbers are unlikely to increase until the cited issues are addressed and the boundary dispute in East Ladakh, following the 2017 Doklam incident, is resolved.