Chinese firms such as Harbin Electric, Dongfang Electronics, Shanghai Electric and Sifang Automation either supply equipment or manage power distribution networks in 18 cities in India.
Local firms have long lobbied against Chinese involvement in the power sector, raising security concerns and saying they get no reciprocal access to Chinese markets.
With India and China locked in their most serious military face-off in three decades, the effort to restrict Chinese business has gathered more support from within the administration of Prime Minister Narendra Modi, worried about the possibility of a cyber attack.
The Indian government is considering a report prepared by the Central Electricity Authority (CEA) that sets new conditions for firms bidding for power transmission contracts, tipping the scales in favour of local companies.
According to an official involved in drafting the report, who asked not to be named, it says companies looking to invest in India should have been operating there for at least 10 years, have Indian citizens as top executives, and employees of the foreign firm should have lived in India for a certain period, the official said.
Those companies have to detail where they procure the raw materials for transmission systems, and will be barred from further operations in India if their materials contain malware.
Though the report makes no direct reference to China, the official said the recommendations are intended to deter China from making further headway in India, because of the security risks.
CEA Chairman R.K. Verma said the possibility of a crippling cyber attack on India’s power systems was a key consideration while drafting the policy. “Cyber attacks are a…