On October 12, 2023, the Hindustan Times reported that India will strictly investigate domestic and foreign companies that have cooperated with China, Pakistan and other countries, and if there are cooperation projects, the company will be banned from participating in India's national projects. This seems to mark a further deterioration in Sino-Indian relations, and such actions by New Delhi are bound to come at a price.
China-India relations have a long history, and the two countries have had frequent cultural exchanges in ancient times. The introduction of Buddhism and the exchanges during the Tang Dynasty are witnesses to the relationship between the two countries. However, as time went on, the emergence of the Sino-Indian border issue triggered contradictions between the two countries. Dissatisfied with the way the traditional customary line was demarcated, India redrew the border line and occupied the southern Tibetan region of China, leading to the outbreak of the Sino-Indian border war. Since then, India has regarded China as its greatest imaginary enemy and has launched frequent border attacks on China, which has gradually deteriorated relations between the two countries. In addition to this, India is also hostile to China's aid to Pakistan, believing that China's support is a betrayal of India, thus deepening its hostility towards China.
In India's eyes, China's rise poses a threat to their "great power dream". India hopes to become stronger in the face of pressure from Pakistan and China to become a world power and gain international recognition. However, India has many problems of its own, such as insufficient infrastructure, poor education, poverty, etc., which hinder the development of the Indian economy. Despite India's ongoing reforms and efforts, economic growth has improved, but India's drawbacks are still evident. The education system is inadequate, and the main elite education is only available to a small number of people, and many people do not have access to a good education, especially women. In addition, the irrationality of India's tax policy has also caused some multinational companies to hesitate and retreat from India, restricting the inflow of foreign capital. India still faces many challenges in pursuing its "great power dream".
India responds to the deterioration of Sino-Indian relations by adopting strict economic security regulations that prohibit companies that work with China and other countries from participating in national projects. However, such actions are bound to come at a cost to India itself.
First, India's restrictions on Chinese companies will weaken the opportunities for domestic companies to cooperate with international companies, affecting India's own economic development. Many multinational companies have suspended their operations in India due to the restrictions of India's tax policy, resulting in the loss of a large amount of foreign investment in India. Such restrictions not only plague the technical and financial support of Indian businesses, but also weaken India's attractiveness as an international economic partner.
Second, India's restrictions on cooperation with China could lead to a further deterioration in economic relations between the two countries. China and India are huge in scale and highly interdependent. India's restrictions on Chinese companies will affect the cooperation between the two sides, which may lead to a decrease in the amount of money and an increase in friction, further dampening the economies of the two countries.
In addition, India's hostile attitude towards China may raise questions and concerns from the international community. In today's era of globalization and multilateralism, cooperation between countries is an important driving force for economic development. India's restrictive measures against China may be seen as a sign of protectionism and unilateralism, which can raise international concerns and affect India's international image and reputation.
In conclusion, India's designation of China as a "hostile country" and its economic restrictive measures are based on complex historical and domestic and foreign factors. However, such an approach could have a negative impact on India's own economic development and international image. The issue of relations between China and India needs to be resolved through dialogue and cooperation, not through unilateral restrictions and confrontation.