An Indian trader has gone missing in the Chinese town of Yiwu, after an unidentified man took him away from a local restaurant, in an incident that is set to trigger a fresh commercial and diplomatic dispute, amid already rising strains between India and China regarding the safety of businessmen in the southern trading hub.

Indian officials told The Hindu the trader from Mumbai, who was in Yiwu on a temporary visa, was taken away on the night of May 19. He has remained unreachable since then.

Two Indian traders, who were accused of owing Chinese suppliers 10 million RMB ($1.58 million), were kidnapped in December, and held for more than two weeks, before Indian officials pressured Chinese authorities to arrange for their release. Their case is now being heard at a local-level court in the nearby town of Jinghua.

The kidnapping of another Indian is set to further strain ties, particularly after the Chinese Foreign Ministry on Tuesday hit out at an advisory issued by the Indian Embassy here a day earlier, warning Indian businessmen of the dangers of doing business in Yiwu, a major trading hub in the southern Zhejiang province, after fresh cases were filed against the two traders.

“The Indian Embassy's advisory isn't conducive to resolving the relevant issue, and will also affect normal trade and economic exchanges between China and India,” Foreign Ministry spokesperson Hong Lei said at a briefing.

“We hope that India will view China's handling of the case in a rational way,” he said, adding that China “always safeguards the legitimate interests of foreign businessmen, including Indians”.

Mr. Hong, in a briefing in March, called on Indian traders to honour their compensation commitments. The traders argued at a court hearing last month that they were only employees of the trading firm that owed the dues, with the Yemeni owner missing. One of the traders, Deepak Raheja, told The Hindu on Monday the traders had presented documents supporting their case to the court, and they had been hopeful of a favourable verdict.

A fresh case filed by suppliers in Yiwu at a local court in January, accusing the two Indian traders of owing a further 1.6 million RMB (Rs. 1.39 crore), triggered Monday's advisory from the Indian Embassy, which warned of “a high possibility of fresh cases being lodged in order to exert additional pressure on Indian businessmen.”

The circumstances surrounding the disappearance of another trader from Mumbai on May 19 are still unclear, although indications are that his trading company had run into a commercial dispute with suppliers in Yiwu.

Dozens of foreign businessmen are reported to have been held captive by Yiwu traders when deals encounter problems. They are usually released after dues are settled and cases usually aren't made public. Indian traders who are based in Yiwu have played down the cases, describing them as the norm in the entrepreneurial and often lawless business environment in many parts of southern China.

One Indian trader, who spoke to The Hindu, said kidnappings happen “only if you owe large sums of money.” “If you pay your dues, there is no problem, and Yiwu is a place where you can do a lot of business,” the trader from New Delhi said.

He added that several traders had expressed concerns regarding the advisory issued by the Embassy. “You cannot say the whole town is a bad place to do business because one or two people haven't settled their dues,” he said. “We worry that this will harm the good business that several hundred Indian traders are doing here, with no problems.”

Indian officials said they have received panicked calls from more than half a dozen Indian businessmen in Yiwu, Shaoxing and some other trading hubs in Zhejiang and neighbouring Guangdong in the past year alone, after traders were held hostage because of payment disputes.

“Perhaps, this is a feature of doing business in the Pearl River Delta,” said one official in an interview earlier this year, referring to China's southern manufacturing and trading heartland.

The incident may trigger a fresh dispute between India and China

Circumstances of the disappearance still unclear

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