Tensions between China and India are spilling over into global business

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Rising tension between India and China is leading to hiccups in international trade, the suspension of business deals and calls for a boycott of Chinese goods and citizens.

This week, trade organizations said that Chinese shipments were suddenly being held up at Indian checkpoints, highlighting growing strains in a vital trading relationship after the countries clashed in a deadly border battle more than a week ago.

The India Cellular and Electronics Association (ICEA) — which represents Apple (AAPL) and Foxconn, among other companies — complained to India’s Ministry of Finance on Tuesday that all electronic imports from China were being scrutinized at ports in India “without prior warning.”

“There was refusal to clear followed by delays, and now, talk about 100% examination,” ICEA chairman Pankaj Mohindroo wrote in a letter to the ministry. “The logistics of seamless movement is in total disarray.”

The timing is especially stressful because businesses have already been suffering from production snags and other disruptions due to the coronavirus pandemic, noted Mohindroo. He estimated that the sector “has only recovered to less than 40% of normalcy.”

“In the normal dispensation, goods are cleared automatically without examination,” Mohindroo wrote. “We have just begun to limp back to normal after a massive set of losses for three months — and now this.”

The Ministry of Finance declined to comment to CNN Business about the letter.

India suspends three China business deals as border tensions rise

Other trade organizations are worried too. The Chennai Customs Brokers Association, based in southeastern India, said Tuesday that authorities have been instructing freight handlers across the country “to hold all consignments which have originated from China.”

Shipments are now expected to be placed “under hold and subject to a reexamination before release,” a representative for the group wrote in a notice to members. While there has been no official notice about the new practice, the association warned businesses that there could be delays clearing cargo at ports, airports and customs stations across the country.

Prior to last week’s border skirmish, growing anti-China sentiment in India had already led to calls for a boycott of Chinese products and services, while new rules on foreign investment were expected to constrain China’s ability to cash in on India’s internet boom.

Then the fight at the border happened. Twenty Indian troops died in the violent exchange, sending China and India into a tense diplomatic and military standoff.

The economic stakes are high. India imports more goods from China than any other country. And India and China have enabled each other’s rise as technology powerhouses.

In another sign of fraying ties, local authorities in India announced this week that they were hitting pause on more than $600 million in deals with Chinese companies, including one with automaker Great Wall Motors.

A minister for the state of Maharashtra said that officials were waiting for India’s central government to assess the current business climate and announce a clear policy about how to move forward on deals with Chinese firms.