India to fast-track import clearances from China as demand surges, signalling thaw in ties

Centre plans to clear pending import approvals from Chinese and other foreign firms amid post-GST festive demand and easing diplomatic chill.

In what signals a steady softening of New Delhi’s stance towards Beijing, the government is preparing to fast-track long-pending import approvals for goods from China and other countries, The Economic Times reported.

The move marks a quiet but crucial shift, one aimed as much at easing domestic shortages as at resetting trade diplomacy that froze after the 2020 border clashes.

Officials say India will soon begin issuing and renewing Bureau of Indian Standards (BIS) certifications for overseas manufacturing units, including Chinese plants, to unclog supply chains strained by months of approval delays.

“We will soon begin issuing and renewing licences for suppliers from several countries, including China,” a senior government official told Economic Times.

“Applications will be assessed on a case-by-case basis.”

Why this matters: A demand boom meets a supply freeze

The decision comes amid a sharp surge in demand for consumer goods, from cars and appliances to electronics, following GST rate cuts in September.

Manufacturers, passing on the tax relief to customers, have seen record festive sales, and in some cases, stockouts.

For the first time ever, there’s a waiting period for large-screen TVs, dishwashers, and high-end refrigerators. Companies say replenishing inventory could take weeks without smoother import approvals.

Bureaucratic bottlenecks hit Chinese imports

Since 2020, BIS approvals for overseas factories, particularly those in China, have been moving at a snail’s pace.

Even as Indian plants received near-instant clearances, Chinese units were left waiting, paralysing several sectors dependent on imported raw materials, components, and finished goods.

To fix this, the Department for Promotion of Industry and Internal Trade (DPIIT) has now sought “company-wise details where foreign manufacturers’ certification scheme is getting delayed”, according to ET.

A similar directive has gone to industry associations as well, in what officials call a 'priority clean-up.'

Between geopolitics and factory floors

The move is being read as a subtle signal of renewed engagement between India and China.

It follows Beijing’s recent decision to resume exports of heavy rare earth magnets to India after a six-month freeze, a relief for manufacturers in the EV, renewable energy, and consumer electronics sectors.

Diplomatic momentum has also picked up since Prime Minister Narendra Modi’s meeting with Chinese President Xi Jinping in August, after which direct flights resumed and Chinese business visas began being cleared again.

Balancing soft diplomacy with Make-in-India goals

While the government’s long-term objective of localisation and value addition remains intact, the short-term supply shock has forced a recalibration.

According to ET, officials admit that domestic capacity gaps in sectors like consumer electronics and footwear have made it impossible to meet festive demand purely with local production.

A top industry executive told ET: “The government still wants localisation, but it’s taken a softer stand on overseas BIS approvals because factories here simply can’t meet demand right now.”

Currently, localisation in the air-conditioner industry stands at roughly 50 percent, with the rest dependent on imports, mostly from China.

Policy tightrope: easing trade, holding control

Despite the import thaw, FDI restrictions on Chinese firms remain in place.

Under Press Note 3, any investment from countries sharing a land border with India requires government approval, a measure introduced in 2020 to prevent 'opportunistic takeovers.'