India's decision to stop issuing all types of visas for Chinese persons and cancel the validity of existing Chinese visa holders who are currently out of India with immediate effect has begun hurting hundreds of Chinese enterprises that have set shop in India. The economic loss due to visa restrictions alone is over $50 million. It keeps increasing each day as normal operations of Chinese firms in India remain affected due to the absence of technical or managerial staff," says Alen Wang, chairman, Chamber of Chinese Enterprises in India (CCEI).
CCEI, which represents over 1000 Chinese companies that have registered Indian presence, says that on an average 20,000 Chinese citizens used to be in India at any given point in time to manage and run the business here. "Only 2,000 people (Chinese citizens) are in India now. Since most of the high level management people in these companies are expats, normal functioning of the companies has been impacted," Wang says.
Speaking at a discussion on the "Impact of Coronavirus on Indo-China Bilateral Trade, Current Scenario & Future Prospects" on Friday, Wang said the absence of top level leadership is delaying management decisions in existing firms while slowing down the establishment of new firms due to the legal and regulatory issues, which require their presence. Earlier Harris Liu, chief representative of China Council for the Promotion of International Trade highlighted the crucial role played by Chinese companies by stating that over 1300 Chinese firms have created over 120,000 jobs in India.
Wang suggests that India should consider resuming the validity of employment visas whose expiry dates are not close to allow them to travel to India without needing to apply for fresh visas after the country decides to lift the travel ban. He also said the visas that are about to expire should be given automatic extension to facilitate travel. Wang also wanted Indian government to consider renewing the visas of Chinese citizens who are currently in India without asking them to travel outside the country as once they are out, their return will be delayed. "There should also be a special channel to permit Chinese citizens' entry to India if they are willing to remain in containment for 14 days," he added.
The human resource problem of Chinese companies in India has come at a time when firms - Chinese and others - are in trouble due to shortage of imported raw materials and components from China. A recent report by Emkay Research pointed out that share of China in imports of the consumer durables industry is high (up to 90 per cent of compressors, large share of PCBs, etc.), with negligible alternatives. Peak summer sales could be at risk if the supply disruption persists beyond February.
"Chemicals/agro-chem companies with weak backward integration appear vulnerable (Dhanuka/Rallis/Vinati/Camlin). Steel and aluminium companies could be at risk from a slowdown in demand and cooling-off of prices. In the auto space, TTMT and (to a smaller extent) Motherson could be hit. ONGC/OIL's earnings could get hit by weak crude prices," the report said. The event was organised by Kirin Crayons & International Advertising Association (IAA).