Rising influence of Chinese Companies in Ashwini Vaishnaw's Rail Bhawan

In the middle of 2020, the Union Government had pretty much banned Chinese companies to take up key projects in India. 

The restrictions came in the wake of the Galwan clashes (near Ladakh at the India-China border) in which 20 Indian soldiers were killed by the Chinese. 

As a retaliatory measure, the government had also banned several popular Chinese apps including TikTok and WeChat. 

Chinese companies have been trying to build their influence in key infrastructure sectors for almost the last two decades. 

However, the government has always been mindful in ensuring that the dragon be kept away from key sectors such as infrastructure, technology, defence, and aeronautics. 

In railways also, Chinese companies have been lobbying for the last 15 years. Several big Chinese firms have been eyeing India’s lucrative rolling stock (train sets) orders, along with several other procurement orders. 

The Railway bureaucracy till date had very tactfully managed to disqualify the Chinese companies, even before the 2020 restrictions. 

“In the last two decades, Chinese have been aggressive in trying to break the Indian Railways markets. Be it rolling stock, locomotive production, station redevelopment, or high-speed projects. They’ve made lucrative offers be it on the books or off the books. But they weren’t able to breach the fort,” said a senior railway officer. 

For the uninitiated, Railways is a lucrative sector for foreign firms where global corporations such as Alstom and GE have made big-ticket investments. For Chinese companies breaking into the Indian Railways' market doesn’t only provide a commercial opportunity but also serves their tactical purpose. 

The 20 billion annual railway capex plan provides a good opportunity to make profits, along with ensuring that the Chinese dragon holds enough influence in India. 

What has made Railways switch to Chinese companies 

The off-hand tactics of Chinese corporations, along with low costs have made it difficult for a part of the railway bureaucracy to resist the temptation. 

In a first, railways recently awarded a tender to procure 39,000 wheels from a Chinese company, despite having the local rail wheel factory and European supplies options (as reported by Economic Times recently). 

“China is one territory all rail ministers have dreaded. India did not go for Chinese high speed and opted for the expensive bullet train technology. Awarding the rail wheel tender for Vande Bharat trains does ring alarm bells,” said a railway officer. 

Now that the precedent on Chinese procurement is already established, Railtel, a railway ministry PSU, is going ahead with the procurement of CCTV cameras, which are being imported from China by a range of companies (as reported by Moneycontrol recently). 

“Chinese cameras will be installed at 7000 stations and there are serious doubts about the data sovereignty as well,” said another railway officer. 

“This is despite Railway technical specifications by RDSO clearly mentioning no technology is to be from countries sharing a land border with India. The tender is not being given chance to be checked by CVC approved Independent External Monitors,” the officer added. 

Another area in railways where the Chinese are looking at growing influence is the manufacturing of train sets, along with getting into key technology sectors which are a powerhouse of all data of train movements, including army movements via rail. 

“Questions do arise that how come the railways is giving a free pass to Chinese corporations,” the railway officer added.