An exercise to minimise the role of power and telecom companies believed to be linked to the Chinese government could be expanded to cover other critical sectors such as higher education as well, people familiar with the development said after a July 15 review of the penetration of such companies and institutions in the Indian economy.

The high-level meeting attended by national security planners and a select group of secretary-level officials comes against the backdrop of the Chinese army’s aggressive moves along the Line of Actual Control that led to a stand-off from May this year. The two sides earlier this month started disengaging at the face-off points in eastern Ladakh after several rounds of talks but Beijing has been slow to pull back its troops.

Last week’s exercise was aimed at coming up with a comprehensive assessment of the footprint of Chinese companies and institutions that could be a proxy for the Chinese government or have close ties to the ruling communist party. “The initiative was driven by the top political leadership,” a government official said.

Much of the discussion at the meeting revolved around a presentation made by security agencies that put the spotlight on two core areas; telecom and higher education.

Security officials who briefed the top civil servants spoke about several instances of universities and colleges tying up with Chinese institutes through Memorandum of Understandings (MoUs) without the requisite approvals.

A classic example cited by the security establishment was the Chinese-government funded Confucius Institutes to promote Han Chinese language and culture – typicality set up in association with a local partner institution.

In the telecom sector, security agencies pointed to the telecom department’s instructions to state-run phone company Bharat Sanchar Nigam Limited, BSNL, to amend its tender to exclude Chinese equipment makers from a large 4G upgrade project.

But private phone companies often prefer Chinese equipment because they are cheaper. There have also been allegations that large tenders are tailored to suit Chinese companies. Industry body COAI had last month spoken against restrictions on private companies, insisting that geopolitical issues should be kept separate from corporate decisions.

The education and telecom ministries have been asked to review the Chinese involvement in the two sectors in light of the presentation made by the security agencies and chart the next steps for the sector.

The rule that requires approvals from the education ministry, home ministry and the external affairs ministry before signing pacts with Chinese institutions or universities isn’t new. On 1 October last year, the higher education regulator University Grants Commission told universities about the need for approvals for its courses. But it is unclear if the government followed up to ensure compliance.

That exercise is expected to start soon.

Beijing started setting up Confucius Institutes across the world in 2004 to promote Chinese language and culture in foreign countries. But as China started rolling out the institutes across the world, the Chinese government-funded outposts also started increasingly coming under the scanner of agencies in host countries. The initial concerns were only about academic freedom, institutional autonomy and reported instances of censorship. But some institutes started to shut after lawmakers expressed concerns that these served as a platform for chinese intelligence and political agenda. Some more, after the law prohibited the defence department from funding Chinese language programmes at institutes that host Confucius Institutes. These institutes have run into trouble in other countries as well including the UK, Canada, France, Australia and Sweden.