Embassy puts out advisory against doing business with Yiwu

Detained Indian traders in the trading hub of Yiwu near here said on Tuesday they were fearing for their lives as a simmering fortnight-long trade dispute with Chinese businessmen continued to escalate.

The Indian embassy in Beijing put out a strongly worded advisory on Tuesday cautioning Indians “not to do business with Yiwu,” even as officials from the Indian consulate in Shanghai negotiated with local police and foreign office representatives in the trading city, which is in Zhejiang province and 250 km from here, to help secure the release of the two traders.

The two traders, who are employees of a trading company accused of owing their Chinese suppliers a reported 10 million Yuan ($ 1.58 million), are now holed up in a hotel in Yiwu under police protection following a harrowing two weeks during which they said they were “kidnapped” and assaulted by enraged Chinese traders.

“We are fearing for our lives. If I step out of this hotel, there is a crazy mob waiting at the gates that wants to kill us,” Deepak Raheja from Hyderabad told The Hindu in a telephone interview, speaking from his hotel room where he is in hiding along with Shyamsunder Agrewal.

The dispute began on December 14, when both of them said they were effectively taken captive by Chinese businessmen for two weeks, during which they said they were denied food and water and physically assaulted.

Their troubles, however, only came to light on December 31, when an Indian diplomat at the Shanghai consulate, S. Balachandran, fainted at a heated court hearing held for the two traders in Yiwu. India on Monday summoned Chinese Deputy Chief of Mission Zhang Yue in New Delhi to protest the treatment accorded to Mr. Balachandran, who was not allowed to leave the court to take his diabetes medication. He had to be subsequently taken to a hospital.

Following the hearing, during which Mr. Raheja and Mr. Agrewal were again attacked and manhandled by Chinese businessmen present at the court — in the presence of police, two witnesses said — they were both taken into police custody with renewed fears for their safety.

They were subsequently moved to a local hotel on Monday, and provided police protection. On Tuesday evening, Indian officials were trying to negotiate a release for the two traders. Complicating the matter are a number of documents that Mr. Raheja had signed, agreeing that the payment was due.

He, however, told The Hindu he had signed the papers under duress, when he was in effective captivity and subjected to ill-treatment. He said the documents were all in Chinese, and he had no translator at hand.

Indian traders want to be taken to consulate

“All we want is to be taken to the Shanghai consulate and to have police protection,” Indian trader Deepak Raheja said. Mr. Raheja was speaking on the telephone from his hotel room where he is in hiding along with Shyamsunder Agrewal.

He said both of them were “only employees,” of company owner, who Mr. Raheja said was from Yemen, and is in hiding. Mr. Raheja, from Hyderabad, said he had been in China for less than 4 months.

The local Yiwu police do not want the two Indians to remain in the hotel for much longer. Local authorities, sources said, were also reluctant to involve themselves in the case and release the Indians, wary of having to answer to dozens of angry local Chinese businessmen.

The businessmen say vast amounts of money are due to them and want to hold the company's management responsible. Investigations into such cases can run into several months in China, leaving the fate of Mr. Raheja and Mr. Agrewal unclear. Whether they will be released and allowed to travel to Shanghai hinges on whether local authorities deem them accountable for the owner's dues.

There are more than a hundred Indians who do business in Yiwu, a trading hub famed in China for a sprawling commodity market. The Indian embassy's travel advisory on Tuesday cautioning Indians from doing business in the city drew a mixed response. The advisory said Indian traders and businessmen “should be aware that when there are trade disputes with Yiwu, the Indian businessmen/traders can be illegally held under detention and mistreated by Chinese businessmen there.”

“Based on experience,” it added, “there is no guarantee that legal remedies will be readily available. Furthermore, in case of disputes arising, experience suggests that there is inadequate protection for safety of persons.”

Some traders, who have done business in Yiwu for more than a decade, questioned why there had never been prior warnings and asked whether this was only a response to Monday's media reports. They also expressed concern whether the advisory could adversely impact the millions of dollars of trade that takes place here. Eastern China accounts for one-third of India's bilateral trade with China.

The dispute has drawn attention in the Chinese media, who have highlighted the rising trade disputes between both countries and wide perceptions of mistrust between Indian and Chinese enterprises. Last year, the Indian embassy issued a first of its kind trade advisory “in response to the rising instances of trade disputes between Indian and Chinese companies,” warning Indian companies from getting into contracts with Chinese firms without performing due diligence and running credit checks.

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