CHENNAI: India’s finance ministry is planning to roll back restrictions imposed five years ago on Chinese companies bidding for government contracts, in a move that signals a cautious revival of commercial engagement between New Delhi and Beijing amid easing diplomatic and border tensions, Reuters reported on Thursday quoting people familiar with the development.
The curbs were introduced in 2020 after a violent clash between Indian and Chinese troops along the Line of Actual Control, which sharply worsened bilateral relations. Under the 2020 rules, firms from countries sharing a land border with India, effectively targeting Chinese companies, were required to undergo additional registration and security clearances before participating in public procurement. The measures significantly reduced the presence of Chinese bidders in government tenders, particularly in infrastructure, power and manufacturing-linked projects.
Officials now say the finance ministry is considering scrapping these requirements as part of a broader reassessment of economic ties with China. The move is aimed at reviving competition in government contracts and speeding up the execution of public projects that have faced delays due to a limited pool of qualified bidders. Chinese firms had earlier played a major role in supplying equipment and undertaking large-scale projects, especially in sectors such as power transmission and renewable energy.
The proposed policy change reflects a gradual improvement in India-China relations following years of strain. Diplomatic engagement has picked up, military-level talks have helped ease tensions along parts of the disputed border, and both sides have taken steps to normalise people-to-people and business exchanges. Officials see the easing of procurement restrictions as a pragmatic step to support domestic economic priorities without formally signalling a full reset in bilateral relations.
However, the move is not expected to mark a complete dismantling of safeguards on Chinese participation in the Indian economy. Restrictions on foreign direct investment from China in sensitive sectors are likely to remain in place, and security scrutiny of strategic projects is expected to continue. Government officials emphasise that national security considerations will still guide decisions on allowing foreign firms access to critical infrastructure and public contracts, the report said.
If approved, the rollback of procurement curbs would open the door for Chinese companies to once again compete for a wide range of government tenders, potentially lowering costs and improving project execution timelines. At the same time, it underscores India’s effort to balance security concerns with economic pragmatism as it seeks to accelerate growth, expand infrastructure and manage complex ties with its largest trading partner.