Indian robotics and hardware startups are facing growing operational challenges as China tightens visa approvals for Indian executives, creating difficulties for companies that depend heavily on Chinese suppliers, manufacturing partners and technology ecosystems. The impact is particularly significant for India’s emerging physical AI sector, where founders and senior executives often need to travel to China to develop supply-chain relationships, inspect components and keep up with advances in robotics.
Several founders told The Economic Times that repeated visa rejections are delaying research and development work, disrupting supplier relationships and making it harder for smaller startups to find alternatives. Some companies are exploring Hong Kong, Taiwan and Singapore as alternative locations for meetings and sourcing, while others are waiting for greater clarity on China’s visa policy. The disruption comes as India’s robotics ecosystem is beginning to attract more capital and new startups.
Chinese Visa Restrictions Hit India’s Physical AI Sector
China plays an important role in the global robotics supply chain because the country has a large ecosystem producing components such as motors, actuators and circuit boards. Indian physical AI startups often rely on this manufacturing base while developing their own software, robotics systems and applications.
For founders of early-stage companies, travelling to China is not simply about meeting suppliers. It can also be necessary for evaluating components, identifying manufacturers, negotiating prices, testing prototypes and understanding new technologies.
Impact Of The Visa Restrictions
| Area | Impact On Indian Startups |
|---|---|
| Supplier meetings | Delayed or shifted to other countries |
| R&D | Slower product development |
| Component sourcing | More difficult |
| Factory visits | Restricted by travel limitations |
| Technology research | Reduced access to China’s ecosystem |
| Supplier onboarding | Delayed |
| Business development | More expensive and time-consuming |
| Small startups | Greater impact because alternatives are limited |
The disruption is particularly challenging for startups that have relatively small order volumes. Such companies may not have enough purchasing power to quickly persuade alternative suppliers in other countries to offer competitive prices or customised components.
Founders Say China Travel Is Essential
At least four founders told ET that regular travel to China is critical because India’s physical AI ecosystem remains at an early stage. Visiting China allows them to build supplier relationships while monitoring advances in robotics and manufacturing.
Vineet Saraogi, co-founder and CEO of XP Robotics, said he normally travels to China every two months, or around four to five times a year, to work with supply-chain partners, onboard new suppliers and study developments in the country’s robotics sector. His visa applications have reportedly been rejected multiple times over the past two months.
For a startup operating in a rapidly evolving technology sector, losing access to this kind of regular interaction can have consequences beyond one delayed business trip.
Typical China Travel Requirements For Robotics Startups
| Activity | Why Travel Matters |
|---|---|
| Supplier meetings | Build and maintain relationships |
| Factory visits | Inspect production capabilities |
| Component testing | Evaluate hardware before large orders |
| Manufacturing negotiations | Discuss pricing and volumes |
| New supplier onboarding | Assess alternative manufacturers |
| Technology scouting | Track new robotics products |
| R&D collaboration | Work directly with technical partners |
| Quality control | Inspect components and prototypes |
The frequency of these activities makes visa availability a business issue rather than simply a travel inconvenience.
India’s Robotics Ecosystem Is Growing
The visa restrictions come at a sensitive moment for India’s robotics and physical AI industry.
Indian robotics startups raised around $130 million in FY25, while companies in the sector raised another $42 million during the first three months of 2026, according to figures cited by ET. Several new companies are also entering the market, including CynLr.
The growing funding activity indicates that investors are becoming increasingly interested in robotics, industrial automation and physical AI applications.
India’s Physical AI Funding Trend
| Period | Funding Raised |
|---|---|
| FY25 | ~$130 million |
| First 3 months of 2026 | ~$42 million |
| Combined reported period | ~$172 million |
These figures should not be interpreted as the total amount raised by every Indian robotics company over the entire period, but they illustrate the increasing flow of venture capital into the sector.
The timing creates a potential bottleneck. Startups are receiving more capital to develop hardware products just as access to one of their most important manufacturing and technology ecosystems is becoming more difficult.
China Has A Major Robotics Manufacturing Advantage
China’s importance to robotics startups extends beyond low-cost manufacturing.
The country has built a broad industrial ecosystem covering electronics, motors, actuators, sensors, circuit boards, precision manufacturing and other components required for sophisticated machines.
For Indian startups, access to this ecosystem can shorten development timelines because multiple suppliers and specialised manufacturers are available within a relatively concentrated geography.
Robotics Supply Chain Comparison
| Component / Capability | Importance To Robotics |
|---|---|
| Motors | Power movement |
| Actuators | Convert energy into mechanical motion |
| Circuit boards | Control electronics |
| Sensors | Enable perception and navigation |
| Batteries | Provide portable power |
| Mechanical parts | Build robot structures |
| Controllers | Coordinate hardware |
| Manufacturing partners | Scale production |
The concentration of suppliers also allows startups to iterate quickly. Engineers can test a component, modify specifications and work with manufacturers on a revised version without necessarily rebuilding the entire supply chain.
That advantage becomes harder to access when executives cannot travel easily.
Small Startups Face The Biggest Problem
Large companies may have enough resources to establish supplier networks across multiple countries. Early-stage startups face a different situation.
A small robotics company may need only hundreds or a few thousand components during early product development. Alternative suppliers may be unwilling to invest time in such low-volume orders, or may charge more for customised manufacturing.
Why Smaller Startups Are More Vulnerable
| Challenge | Effect |
|---|---|
| Low order volumes | Weaker bargaining power |
| Limited cash | Harder to absorb higher component costs |
| Small teams | Fewer people available for international sourcing |
| Prototype dependence | Delays can affect fundraising and launches |
| Supplier relationships | More dependent on individual contacts |
| Limited alternatives | Switching countries can take time |
ET reported that the problem is particularly severe for smaller firms with low volumes, for which finding alternative suppliers is less viable. Some founders said prolonged restrictions could potentially cost millions of dollars in lost business.
Startups Explore Hong Kong, Taiwan And Singapore
Companies affected by the visa restrictions are beginning to explore alternatives rather than relying entirely on China-based meetings.
Hong Kong, Taiwan and Singapore are emerging as possible locations for meetings with suppliers, partners and other stakeholders.
These alternatives can help companies maintain business relationships, but they may not fully replicate China’s manufacturing ecosystem.
Alternative Locations Being Considered
| Location | Potential Role |
|---|---|
| Hong Kong | Meetings and China-linked business access |
| Taiwan | Electronics and semiconductor ecosystem |
| Singapore | Regional business and supplier meetings |
| China | Manufacturing, sourcing and technology access |
Moving meetings outside China can also increase travel and coordination costs. In some cases, physical inspections of factories or production lines may still require executives to enter mainland China.
As a result, alternative meeting locations may reduce some disruption without completely solving the underlying problem.
Visa Restrictions Come Amid Broader India-China Business Tensions
The restrictions are affecting industries beyond robotics.
Indian companies in automotive components and electronics, which also maintain strong business relationships with Chinese companies, are facing similar difficulties. ET has reported that companies across manufacturing sectors have been dealing with tighter business-visa approvals.
Separate reporting has indicated that some companies have seen visa approval rates fall to around 20-40% in recent months, compared with near-complete approvals previously.
Sectors Reportedly Affected
| Sector | China Link |
|---|---|
| Robotics | Components and manufacturing |
| Physical AI | Hardware and technology |
| Electronics | Components and contract manufacturing |
| Automotive | Parts and manufacturing |
| Consumer electronics | Supply chains |
| Industrial equipment | Components and machinery |
The wider impact means the issue could eventually become relevant to India’s broader manufacturing and technology ambitions rather than remaining confined to startups.
Physical AI Needs Both Software And Hardware
The physical AI sector differs from conventional software AI because its products interact with the physical world.
A software startup can often build, test and deploy its product remotely. A robotics company has to deal with physical components, manufacturing tolerances, motors, batteries, sensors, actuators and mechanical assemblies.
This makes supply-chain access a core part of technology development.
Software AI Vs. Physical AI
| Factor | Software AI | Physical AI / Robotics |
|---|---|---|
| Primary product | Software | Hardware + software |
| Manufacturing | Limited | Essential |
| Components | Digital infrastructure | Motors, sensors, electronics |
| Prototype iteration | Mostly digital | Physical testing required |
| Supplier relationships | Less critical | Highly important |
| Factory access | Usually unnecessary | Often important |
| Logistics | Primarily digital | Physical supply chain |
This is why visa restrictions can have a disproportionate effect on physical AI startups compared with conventional AI companies.
China’s Robotics Industry Is Advancing Rapidly
The competitive pressure is also increasing because Chinese robotics companies are developing rapidly.
Chinese robotics company Unitree recently debuted on the Shanghai stock market, with its shares surging more than 500% after the listing, according to ET.
The company’s rise is one indication of the scale of China’s domestic robotics ecosystem.
China’s advantage is not limited to individual robotics companies. It also benefits from a large industrial base that can produce the components needed by robotics manufacturers.
China’s Robotics Advantage
| Area | Chinese Strength |
|---|---|
| Manufacturing scale | Very large |
| Electronics | Deep supplier ecosystem |
| Motors | Established component production |
| Actuators | Large industrial base |
| Robotics startups | Rapidly expanding |
| Component availability | Broad |
| Production experience | Extensive |
| Domestic market | Large |
For Indian startups, the challenge is therefore not simply finding a factory. It is gaining access to an ecosystem that has developed considerable depth across the entire robotics value chain.
Visa Delays Could Affect R&D Timelines
The immediate effect of visa rejections is delayed travel, but the consequences can extend much further.
If an executive cannot meet a supplier, a component order may be delayed. If a prototype cannot be inspected, testing can be postponed. If a new manufacturer cannot be onboarded, production plans can slip.
For startups operating on tight funding timelines, even relatively small delays can have significant consequences.
Potential Startup Impact
| Delay | Possible Consequence |
|---|---|
| Supplier meeting postponed | Negotiations delayed |
| Factory visit cancelled | Quality checks postponed |
| Prototype inspection delayed | Product testing pushed back |
| New supplier onboarding delayed | Production timelines affected |
| Technology scouting reduced | Slower product development |
| Component sourcing disrupted | Higher costs or shortages |
A prolonged situation could therefore affect not only individual companies but also the pace at which India’s physical AI ecosystem develops.
Funding Growth Raises The Stakes
The growing flow of venture capital into robotics means more startups now have capital to deploy into product development.
But venture funding comes with expectations around milestones. Startups are typically expected to demonstrate technical progress, prototypes, customer adoption or revenue within defined periods.
Supply-chain delays can make those milestones harder to achieve.
For investors, the issue could therefore become part of the operational risk assessment for Indian hardware and robotics startups.
The Bigger Picture
China’s tightening of business-visa access for Indian executives is exposing a structural dependency within India’s emerging physical AI ecosystem. Indian startups may be developing their own robotics software, systems and products, but many still depend on China’s manufacturing and component ecosystem to build those products efficiently.
The problem is particularly significant because India’s robotics sector is entering a period of increased funding and experimentation. With around $130 million raised in FY25 and another $42 million in the first three months of 2026, the industry is beginning to attract meaningful investor attention. If visa restrictions persist, companies may have to diversify their supply chains faster than planned, potentially increasing costs and slowing product development.
Looking Ahead
Indian physical AI startups are likely to increase efforts to build alternative supplier relationships across Taiwan, Singapore, Hong Kong and other manufacturing hubs. Over time, companies may also seek to localise more component production in India, although building competitive manufacturing capacity for motors, actuators, electronics and other specialised parts will require significant investment and time.
For now, the immediate concern is whether the visa restrictions continue long enough to disrupt product-development cycles and commercial relationships. India’s robotics opportunity is still at an early stage, and access to global supply chains remains important. The ability of startups to diversify suppliers while maintaining costs, quality and development speed could become a critical factor in determining how quickly India’s physical AI industry can scale.
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