India has approved four Chinese-linked power equipment manufacturers with factories in the country to participate in government tenders for critical power infrastructure projects, according to a Ministry of Finance order reviewed by Reuters. The exemption, issued on June 24 and reported on Friday, grants the companies permission to compete for selected government contracts for two years as New Delhi accelerates expansion of its electricity transmission network.
The approved companies are TBEA Energy, Nanjing Electric India, New Northeast Electric India and Taikai Electric (India). According to Reuters, the exemption applies only to these firms and is not intended to establish a broader policy for other Chinese companies seeking access to Indian government projects.
India’s Ministry of Power requested the exemption in January for companies with manufacturing facilities in India that are involved in critical power projects, according to the government document reviewed by Reuters. Officials said the move is intended to support the country’s rapidly expanding transmission network as electricity demand grows and renewable energy capacity increases.
A spokesperson for India’s Ministry of Finance did not publicly comment on the decision after the order became public. Reuters reported that the ministry’s order specifies the exemption will remain valid for two years from the date of issuance and “should not be treated as a precedent for other companies.”
Reuters previously reported in January that New Delhi was considering broader relaxations for Chinese bidders as diplomatic and border tensions between India and China showed signs of easing. The latest exemption represents one of the clearest examples of that policy shift in the strategic power sector.
The decision marks a departure from restrictions imposed after the deadly 2020 border clash between Indian and Chinese troops. Following the confrontation, India required Chinese companies seeking government contracts to register with a government committee and obtain political and security clearances before participating in public tenders. Those measures significantly reduced Chinese participation in state-funded infrastructure projects.
The policy change comes as India seeks to expand its electricity infrastructure to meet rising domestic demand and integrate additional renewable energy generation into the national grid. According to Reuters, officials concluded that allowing selected manufacturers already producing equipment inside India could help reduce project delays and strengthen supply chains for critical transmission projects. (Reuters)
Financial markets reacted quickly to the announcement. According to The Economic Times, shares of several power equipment manufacturers, including Hitachi Energy, GE Vernova T&D India and Siemens Energy India, declined after investors assessed the prospect of greater competition in government tenders.
The exemption is expected to affect procurement for transmission equipment used in government-backed electricity projects. Reuters said the decision applies specifically to the four approved companies that already operate manufacturing facilities in India rather than opening all government contracts to Chinese suppliers.
Regional and Global Impact
The decision could influence commercial ties between India and China by allowing limited participation of Chinese-linked manufacturers in India’s strategic infrastructure sector while maintaining restrictions on other firms. Reuters reported that the exemption reflects India’s effort to balance national security considerations with the need to expand electricity infrastructure quickly.
For India’s power sector, the policy may increase competition in government tenders and improve equipment availability for transmission projects. At the same time, domestic manufacturers and international competitors operating in India could face stronger competition for future contracts, according to market analysts cited by The Economic Times.
Background
India tightened restrictions on Chinese companies following the 2020 border clash in the Himalayas, introducing political and security clearance requirements for bidders from neighbouring countries. Reuters reported that those measures effectively limited Chinese participation in government procurement across several sectors.
During 2026, New Delhi has gradually eased some restrictions affecting imports of critical equipment and procurement for selected state-owned companies as infrastructure projects experienced supply shortages and delays. Reuters also reported that India has been seeking ways to accelerate its expansion of electricity transmission capacity while supporting its renewable energy targets.
What Happens Next
The exemption will remain in force for two years from June 24 unless the government changes the policy earlier, according to the Ministry of Finance order reviewed by Reuters.
The four approved companies will now be eligible to participate in government tenders for critical power infrastructure projects under the terms of the exemption. Reuters reported that the order explicitly states the approval should not be considered a precedent for other Chinese-linked companies, meaning future exemptions would require separate government approval. (Reuters)
