January 8, 2026, 15:29 IST
Bharat Heavy Electricals (BHEL) shares tumbled sharply on Thursday, hitting the 10% lower circuit limit after reports suggested India might ease restrictions barring Chinese companies from bidding on government contracts. The “lower circuit” is a safeguard that halts trading when a stock’s price plunges too far too fast. Siemens shares also took a hit, slipping more than 3%. 1
Two government sources say the finance ministry is considering rolling back restrictions put in place five years ago, after a deadly border clash in 2020. If that happens, it could unleash fiercer competition for government contracts worth between $700 billion and $750 billion. This matters because government procurement is a major player in sectors like rail, power, and infrastructure. So far, foreign bidders have mostly been shut out under the existing rules. 2
The 2020 rules required bidders from countries bordering India to register with a government panel and secure both political and security clearances before they could participate. But an anonymous source told the report that officials are now pushing to scrap that registration step altogether, handing the final decision to Prime Minister Narendra Modi’s office. 3
The restrictions quickly caused real business losses, snatching away a $216 million train contract from China’s state-backed CRRC, the report showed. It also highlighted how bans on importing Chinese power gear have dragged India’s efforts to push thermal power capacity to around 307 gigawatts (GW) over the next decade. A high-level panel, led by former cabinet secretary Rajiv Gauba, has recommended easing some of these rules. 4
The policy debate shook already fragile markets. India’s Nifty 50 dropped about 1%, while the Sensex lost nearly 0.9% in afternoon trading. Both indexes now face their roughest stretch in over four months as investors grappled with new U.S. tariff threats and a steady outflow of foreign capital. “Trump’s tariff threat has triggered a kneejerk reaction,” said Viram Shah, founder and CEO at Vested Finance. 5
BHEL’s recent rally hit a snag, losing some momentum after its sharp climb. The stock had surged to a 17-month high of ₹305.85 on Wednesday, marking a roughly 44% jump over four months. Brokers pointed to a heavy order backlog and expect a boost from planned expansions in thermal power capacity, aiming to keep electricity steady, with price targets set between ₹363 and ₹370. Meanwhile, the company hinted it’s gearing up to strengthen its EPC – engineering, procurement and construction – capabilities for upcoming projects. 6
Even after Thursday’s selloff, BHEL had surged roughly 32% over the past year, according to a market note that pegged the stock at nearly 202 times trailing earnings — a hefty valuation that can trigger sharp moves whenever there’s policy news. That same note also spotlighted BHEL’s September-quarter profit, which soared more than four times compared to the year before. 7
The company also signaled fresh momentum in the rail sector on Thursday, revealing it has kicked off deliveries of underslung traction converters for the Vande Bharat Sleeper Train project, collaborating with Titagarh Rail Systems. BHEL called this its first foray into the so-called “semi-high-speed propulsion” arena. These trains are designed to reach speeds up to 160 kmph, with 200 rakes divided between the BHEL-led consortium and an India-Russia joint venture. 8
Even before the policy report landed, technical analysts were already raising red flags over shaky short-term sentiment. Rupak De from LKP Securities called the Nifty’s near-term trend “sluggish,” while Drumil Vithlani at Bonanza Portfolio focused on a bullish play in ABB India, targeting ₹5,600 in the near term — highlighting how sector bets are being tested amid headline risks. 9
