Trump tariffs: Chinese firms agree to Indian norms, minority stake in JVs, says report

Many Chinese companies have reportedly become more amenable to abiding by Indian conditions in order to expand in the country. Shanghai Highly Group and Haier are among such companies.

According to a report in The Economic Times, these companies have agreed to certain Indian conditions such as retaining  a minority in joint ventures, which they reportedly were not keen on earlier. The report cited sources who said, in case the US market gets shut off for China, these Chinese companies would want to be present in the Indian market. 

This is pertinent in the context that India was not keen on investments from China after the border violence in 2020. 

Haier, one of the widely popular electronics companies in India, has agreed to sell a majority stake in its local operations. It is now in talks with several Indian companies and private equity funds to sell up to 51-55 per cent. 

The government is willing to clear joint ventures with Chinese companies if they have a minority stake, the company board is dominantly Indian, and the venture offers value addition or new technology to grow local production.

As per the report, Shanghai Highly is also open to a technical alliance that will transfer production lines and technology. 

TRUMP TARIFFS ON CHINA

The United States has imposed tariffs of up to 245% on Chinese imports in response to China's retaliatory trade measures. This development comes after China directed its airlines to stop taking deliveries of Boeing jets, following the US's decision to levy a 145 per cent tariff on Chinese goods. 

The White House described this move as part of President Trump's 'America First Trade Policy'. 

The administration accused China of limiting access to crucial high-tech materials, such as gallium, germanium, and antimony, which are vital for military, aerospace, and semiconductor industries. China has recently halted exports of six heavy rare earth metals and rare earth magnets, further impacting global supply chains. The White House stated that China had earlier banned the export of key high-tech materials to the US, aiming to restrict supply to industries like automotive, aerospace, semiconductor, and military sectors. Additionally, Beijing instructed Chinese carriers to stop purchasing aircraft-related equipment from US companies.