Boycott Chinese Goods: What it Means for India?

Will boycotting China help India?

1. In 2019, imports from China accounted for 14% of the total value.
2. Since childhood, we have been seeing and using Chinese products.
3. The toys, apparels, and various electronic gadgets, such as mobile phones that are in use in India, come from China.
4. So, in a way, while the Indian economy is dependent on various countries, most of which are from the European Union, it is also reliant on the products and services that come from China.
5. Chinese products are in high demand in the Indian economy, and about 80% of the products that we use come from the Dragon nation.
6. In recent times, there has been an uprising against the country, owing to the pandemic and the border issues.
7. Due to this, the anti-China sentiment is looming over the people of India.
8. And in light of this, the Government has decided to boycott Chinese products and services.
9. However, the question is, will it be easy?
10. And more importantly, how is it going to affect the Indian economy?

The Ground Reality

• Trade figures show that imports from China are nearly seven times higher than the exports from India.
• Such statistics have created a considerable gap in the trade with the country, with exports being $16.7 billion and imports, a staggering $70.3 billion.
• Another thing to note here is that China's exports to India account for only 2% of its total global exports.
• So, this means that you cannot affect the Dragon nation in any way by boycotting their goods.
• With a limited manufacturing potential, India cannot hope to stand a chance in a trade war against China, which is already serving its goods across the world.

You must also be aware that China's imports include not only electronic gadgets and toys but also various other consumer durables, such as vehicles, industrial goods, solar cells, and drugs and pharmaceutical products, among other things.

• In 2017-18, China imported nearly 60% of all the electrical and electronic equipment that Indian manufacturers required.
• China also dominates the Indian smartphone market and has captured 60% of it with top brands like Xiaomi, Oppo, and Vivo.
• Also, China has control over 90% of the country's toy market, while it has managed to capture nearly half of the bicycle markets.
• So, we can say that the key industrial sectors in India are heavily dependent on China.
• Now, if the Indian Government decides to boycott Chinese products, it will significantly impact both imports and exports and the economy.

Impact on the Economy

1. While boycotting Chinese goods can have severe consequences for both imports and exports, its effect on Indian startups and other such companies is a whole different story.
2. Experts suggest that Chinese investment in the Indian economy has grown manifold since 2014.
3. Reports state that while in 2014Chinese investments in Indian firms accounted for about $1.6 billion, the same increased over five times to $8 billion by 2017.
4. Others argue that these reports don't depict a clear picture of how much Chinese investment is present in Indian companies since they don't consider equity and the investments that come from third-world countries.
5. Furthermore, the country is also making attempts to acquire significant stakes in Indian businesses, and boycotting Chinese products would mean deterring relationships, causing considerable losses to those businesses.
6. Chinese giants like the Alibaba Group, Tencent Holdings, and TR Capital have already set foot in the Indian markets by investing in rapidly expanding startups like Byjus and Big Basket.
7. Moreover, the country is a huge player in our digital space. Applications like Tik Tok have amassed way more users than other such popular channels like YouTube.
8. So, boycotting Chinese products means severing all ties with the Dragon, which is likely to impact Indian startups and cause huge losses.
9. Many such companies are already beginning to feel the heat of this effect.
10. For example, various popular Indian startup companies like Zomato, Swiggy, Big Basket, and Paytm have incurred huge losses that run into the billions.
11. Also, since India is a member of the World Trade Organization, we cannot discriminate against any of our trade partners against their rules.
12. All this has got the Indian Government pondering about how to deal with the situation.

The Future

1. Disputes with China over the border remains one of the foremost reasons for banning Chinese goods in India.
2. But boycotting Chinese products would mean that Indian manufacturers must go the extra mile to ensure that our products stand a chance to compete against those of the Dragon.
3. So, the Government needs to handle this issue with the utmost vigilance.
4. It is especially true since banning Chinese goods or services in India will have little to no impact.

In Conclusion

• We must wait and see how the border issue pans out.
• While the Indian Government must ensure the promotion of made-in-India products and services, the priority now is settling the border dispute.
• The Government can do only so much, especially in the wake of a global viral outbreak.
• But it must ensure that it does something before the dragon nation can capture the whole of the Indian market.

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