India Set to Scrap Curbs on Chinese Firms for Govt Contracts, Boost Trade

• India's finance ministry plans to lift five-year-old restrictions on Chinese firms bidding for government contracts to revive commercial ties.
• The 2020 curbs, imposed after a deadly border clash, required Chinese bidders to register and obtain political/security clearances, effectively barring them from $700-750 billion in contracts.
• The decision follows requests from government departments facing shortages and project delays, and a recommendation from a high-level committee led by Rajiv Gauba.
• The restrictions led to a 27% drop in new projects awarded to Chinese bidders in 2021 and hindered India's thermal power capacity plans.
• Shares of Bharat Heavy Electricals and Larsen & Toubro fell, anticipating increased competition from Chinese firms.

Why It Matters: India is easing restrictions on Chinese firms for government contracts to boost trade and address project delays.