The logo of TikTok application is seen on a screen in this picture illustration taken February 21, 2019. Photo: VCG

India's finance ministry amended its public finance rules on Thursday, in a thinly veiled effort to bar Chinese companies from taking part in its government procurement, a move that experts said was a continued escalation of trade tensions that will result in a no-win situation.

Bidders from countries bordering India are barred from government procurement of goods and services unless they go through a specific registration process, the Indian finance ministry said, citing national security. 

Procurement of medical supplies for containment of the COVID-19 pandemic was exempted from the new rule until the end of 2020.

The move, with the country's additional measures against apps developed by Chinese firms, is an escalation of trade and investment friction, highlighting a growing tendency by the Indian government to politicize business matters, said Liu Xiaoxue, an associate research fellow at the National Institute of International Strategy under the Chinese Academy of Social Sciences.

"Barring Chinese companies from such government projects is not the first time such tactics have been deployed. It will be a no-win situation," Liu told the Global Times on Friday.

Under the current international situation, the Indian government probably believes its actions are not unusual, given the way the US has suddenly turned against China, noted Liu.

Tensions between China and the US have escalated, with China on Friday asking the US to close its consulate in Chengdu in Southwest China's Sichuan Province after the US abruptly ordered a shutdown of the Chinese consulate in Houston this week. 

The ban on government procurement is a further step the Indian government has taken against Chinese business interests after it unveiled in April a new investment regulation believed to be discriminatory against investors from China. Multiple key Chinese projects in the country have been suspended. 

Separately, the Indian government has been cracking down on more Chinese apps, according to media reports on Friday.

Chinese apps including Helo Lite and Bigo Lite, versions of already banned apps, have been removed from Google and Apple app shops. These apps were the lighter versions of 59 Chinese apps such as TikTok, UC Browser and WeChat that were banned by the Indian government in June.

ByteDance, which owns TikTok, said it was expecting a loss of $6 billion after three of its apps were banned. 

However, India's ban on these apps also cost itself jobs. Alibaba subsidiary UC Web, the company behind the UC Browser app, has already stopped its service in the country and let go of local employees.

Chinese companies in India are learning what political risks can mean for their businesses and their passion has been cooled down, Liu said. 

"Political risks are expected to continue as long as the border tension between China and India remains high," Liu said. 

Source: Global Times