Free movement of human resources and technology are crucial for making the business agreements with China work, say experts.

“Till you don’t allow free movement of human resources and technology no business agreement will work,” said an industry body official adding that, “Security has always been an issue, but it needs to be resolved for business relations between the two countries to really take off.”

Non-tariff barriers are a major issue with China, said another industry official. These are restrictions that arise from measures taken by Government and authorities in the form of laws, regulations, policies, conditions etc.

One of the issues that workers from both the countries face is work permit restrictions, which impacts the free movement of manpower.

Chinese companies such as Huawei and domestic companies such as Reliance Industries have faced problems with the Home Ministry not allowing the influx of Chinese workers.

Though the Indian Government is now keen to resolve such problems critics remain sceptical. The Home Ministry has declared that it will not take more than 12 weeks to give security clearance for any foreign direct investment project in the area of industry and infrastructure, which are forwarded by other ministers.

“This decision is very important especially to woo Chinese investments, as China had been unhappy with the way projects had been stalled in the past because of dilly-dallying by the Home Ministry,” a Commerce Ministry official told BusinessLine .

In fact, recently when the Commerce Minister visited China, the Home Ministry’s views were also taken on board.

Earlier, Chinese firms were not permitted to invest in terminal development at ports or any large rail sector projects, though no official word bars Chinese firms from bidding for such projects.

A few years ago, during the UPA-I regime, Hutchison, a Chinese port developer, had attempted to invest in a port terminal in India but could not.

More recently, two Chinese firms – CSR and CNR – could not qualify for developing locomotive factories on a joint venture basis with Indian Railways. This was despite experts pointing out that their participation could put pricing pressure on the American and European firms who are in the race.

With China committing $20 billion of investments in India over the next five years, the ball is now in India’s court to ease hurdles which have prevented Chinese businesses to flourish in India.

(Inputs from Amiti Sen, Mamuni Das, Richa Mishra)

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