The Communist Party of India-Marxist (CPI-M) has urged the Indian government not to target Chinese companies in the name of security.
An editorial in People's Democracy, the party mouthpiece, referred to reports that India was finalising a new foreign direct investment (FDI) policy "that will, for the first time, include China on a list of countries that are considered sensitive for India's national security".
"By all means we should take all measures to secure our interests," the magazine said. "But this needs to be done sector specific and not country specific."
The journal expressed surprise that the new FDI policy was coming in the declared year of friendship between India and China.
"Further, it comes barely a month before the official visit of Chinese President Hu Jintao" to India.
The editorial followed the Indian decision to scrap a joint venture bid floated by BSNL that was won by the Chinese telecom enterprise ZTE, following adverse remarks from intelligence agencies.
Earlier, New Delhi refused to approve a Chinese construction to build a deep-sea port in Kerala.
"While ... security sensitive areas and sectors must be carefully scrutinised for the entry of FDI... omnibus banning of countries smacks more of a paranoia than concern for security interests," the party said.
It said both India and China were today perceived as emerging economies. "Obviously there would be powerful vested interests globally who would not wish to see" the two countries coming together.
"It can only be hoped that the current Indian concern is not the product of such pressures from interested quarters."