Covid cases are on rise in India. Government didn't handle lockdown well to accommodate guest (migrant) workers and they were stranded. On top of all these, lives of Indian soldiers died recently in a clash with Chinese soldiers and China is continuously testing limits at Galwan Valley. You need a disruptive breaking news to crush all these and prove Government is in control. This is simply that. This is nothing but fueling the anti-China sentiment growing in the country. This will temporarily relieve government from answering the other growing concerns.
It's also quite ironic that so many companies with strong Chinese funding are still operating. Chinese smartphone makers are also doing great in India despite economic slowdown. OnePlus recently did a flash sale and sold out.
It'll be interesting to see what's going to happen in Long term. But this one, it's just a spicy headlines.