Officials in western India’s Maharashtra state said Monday they were reviewing deals with three Chinese companies as they seek clarity from the Indian government on how, or if, to proceed.
The preliminary agreements were announced last week as part of a local government initiative to help revive the Indian economy from the coronavirus pandemic. Growth in India slowed long before the crisis, and GDP is expected to decline this year for the first time since 1979.
Twenty Indian soldiers died in the border skirmish last week, sending China and India into a tense diplomatic and military confrontation. The economic stakes are high. India imports more products from China than any other country. And India and China have allowed each other to rise as technological powers. Chinese tech giants have invested billions of dollars in India’s biggest startups, while their smartphone makers dominate the market there.
The biggest trade deal at risk in Maharashtra is with Chinese automaker Great Wall Motors, which had agreed to a partnership worth nearly $ 500 million, according to Indian authorities.
The other deals involve Chinese industrial manufacturer Hengli Engineering and Beijing-based automaker Foton Motor, which already has a joint venture with Indian electric bus company PMI.
Officials did not reveal what other Indian companies could be affected. Many local companies unveiled deals in Maharashtra last week, including Varun Beverages, a supplier of Pepsi (ENERGY) products in India, and Hiranandani Group, a leading real estate developer.
Tensions continue to rise a week after the violent exchange. There has been a change in the mindset of the Indian Army after the fatal border clashes, according to a source in the Indian Armed Forces. Indian sources at the border have now been instructed to confront any assault and transgression with equal force, the source told CNN.
On Monday, Subhash Desai, Maharashtra’s state industry minister, said in a tweet from the state government’s media account that his officials were waiting for the central government of India to assess the current business climate and announce a clear policy on how advance agreements. with Chinese companies.
– Sherisse Pham, Rishi Iyengar and Vedika Sud contributed to this report.