Will India restrict Importing of Goods from China?
Reportedly the call for boycotting Chinese products has intensified in the past week after a data-face-off at the data-border with Chinese troops in Galwan Valley in Ladakh resulted in the death of 20 indian army personnel on june 15. The boycott sentiment has been gathering steam over the past month, starting with the coronavirus originating from china, followed by geopolitical tensions between both the countries. china (along with Hong Kong) is India’s largest trade partner and Chinese imports accounted for nearly 14% of India’s total imports in FY20, while exports were only at 5%. This shows that india has a huge trade deficit with China.
According to data from Invest india, India-China trade increased by over 30 times from 2001 to $87.1 billion in 2018-19. Imports from china have risen by over 45 times since 2000 to reach $70.3 billion in 2018-19. There are around 800 Chinese companies in India.The sector that is perhaps the most inundated with Chinese brands is India’s smartphone market. According to Counterpoint data, 81% of the smartphone shipments in Q1 2020 were from Chinese smartphone players. Brands such as xiaomi, Vivo, Oppo, which make affordable smartphones, are among the most sold. local smartphone makers occupy only 1% of the country’s smartphone market. Many of them such as Micromax, Lava and even Reliance’s LYF smartphones failed to make a mark in the indian market.
Nearly 60% of televisions and home appliances sold in india are Chinese. While some may be assembled in india, india buys a large chunk of its electronic components from China.In the pharmaceutical industry, india imports over 60% of its active pharmaceutical ingredients (APIs) from China. As per reports, this is worth $3.5 billion. Banning trade with one single country is not possible due to World Trade Organization guidelines. In addition to that, the reason Chinese goods are such an intrinsic part of India’s manufacturing is that they come at low cost and are a cost efficient alternative, especially for small businesses.