China India File photo:CGTN

Indian economy and customers will suffer as New Delhi plans to sanction several Chinese companies due to their "military connection," because India can't find an ideal replacement from other countries, said Chinese analysts. They said such moves only show that the Indian government failed to manage domestic nationalism. 

The Indian government has identified at least seven Chinese companies operating in India "with alleged direct or indirect links to the People's Liberation Army (PLA) along with Chinese venture capital investments in India, including 'big names,' where the benefits of civilian innovation are suspected to be used for China's defense sector," Indian media the Economic Times reported on Monday.

They are Alibaba, Tencent, Huawei, Xindia Steel Ltd which is considered one of the largest joint ventures between China and India, Xinxing Cathay International Group which has set up a manufacturing facility in Chhattisgarh with an investment of Rs 1,000 crore ($11.4 billion), China Electronics Technology Group Corporation (CETC) and SAIC Motor Corporation Limited.

The move came after New Delhi banned 59 Chinese apps in the country. 

Hu Zhiyong, a research fellow at the Institute of International Relations of the Shanghai Academy of Social Sciences, told the Global Times on Tuesday that these Chinese IT giants are providing irreplaceable online finance services to India and making it more convenient for the Indian middle class to do business online. So if the Indian government sanctions these companies, the country's middle class will be harmed as well.

"India does not want to confront China militarily, but needs to find a new way to respond to radical nationalism, as these Chinese firms have become new targets," Hu said.

Military-civilian integration is a common and open commercial model around the world, and "connection to military" is only an excuse India uses to restrict Chinese companies' legitimate civilian business, a Chinese intelligence security expert told the Global Times on Tuesday under condition of anonymity, citing US aviation giant Boeing, which not only manufactures civilian aircraft, but also serves as one of the largest contractors of the US military.

Although Xinxing Cathay makes military vehicles and clothes, and CETC is one of the largest providers of electronic systems, including radars, to the PLA, the Chinese companies' business with the PLA does not mean they will threaten the national security of India, and India did not provide evidence to support its accusations and motivation, the expert said.

When Beijing moved to ease the border tension created by India, New Delhi showed no sincerity to settle the issue, but even tried to further escalate it - conducting more military drills in the border areas and sanctioning Chinese firms, Hu said. These moves show that India has been hijacked by domestic radical nationalism, and has failed to manage it, Hu said.