In a move that is aimed at using economics as a tool for furthering diplomatic agenda, the Centre is working on a policy framework to screen threats emerging from big-ticket investments in strategic sectors by a host of countries including China.

The Union Home Ministry is examining a proposal from the Intelligence Bureau (IB) to filter all sensitive investment proposals from foreign entities into three broad categories under “entities of concern”, “countries of concern” and “sectors of concern” to check any unwanted investments into strategically important sectors like telecommunication, power and infrastructure.

As part of the policy level interventions to counter Chinese threat, the Union Home Ministry is mulling over the proposed scheme to examine proposals from the point of view of these three parameters. When approved, the scheme would cover threats from Chinese entities as well.

Chinese firms have emerged as the lowest bidders in many infrastructural projects in India with active support of Chinese Government. Such Chinese footprints were increasingly being noticed in States like Maharashtra, Chhattisgarh and Haryana. “There is a large-scale presence of Chinese companies in States like Chhattisgarh where major investments were in the sectors of telecommunication, engineering and manufacturing,” a senior Intelligence official said.

The Intelligence agencies have noted with concern the visit of Chinese business delegates to Betul Island in Goa near INS Khadamba to explore business opportunities. The other area of concern is the award of contracts to non-Chinese firms, which in turn employ Chinese firms/persons, as was the case in the Dhamra Port Company in Odisha, which is strategically located near APJ Kalam Island (Wheeler Island).

Amid huge investment agenda of the Chinese Government under the ambitious Belt and Road Initiative, there is a significant uneasiness due to Chinese ascendency. The aggressive nature of the Chinese trade and culture promotion poses risks to economic engagement including the Indian Ocean Region.

China is also aggressively using its soft power through the setting up of Confucius Institute to gather Intelligence in the host countries.

According to Intelligence estimates, increased business and tourist activities besides Memorandums of Understanding with Indian universities and colleges for promoting Chinese language and culture through various student exchange programmes pose a threat to Indian interests. China is also attempting through is businessmen to gain access to decision making levels in Indian establishments.

“As part of the existing policy formulations, the Chinese investment proposals are cleared by the Government in consultation with the security agencies on a case to case basis. The new framework will further help in better identification of threats and restricting investments that may harm the Indian economy in the longer run,” the official added.