oycott Chinese goods once again became the prime agenda and Indians on social media following the outbreak of the novel coronavirus in China a few months ago and also violent face-off between Indian and Chinese troops in Ladakh’s Galwan valley. Some Indian users on social media have been calling for the ban of Chinese apps.
Well, the boycott takes us back to the British era, when India’s nationalist movement called for a boycott on English goods, it seems like we are heading back to the past. But can we really afford to boycott China? The idea of boycotting Chinese products is good but right now what we need is infrastructure for Swadeshi products. It may not be possible to boycott China products overnight. But in some capacity people have already started disowning Chinese goods. The question is how long they can do it? Boycott of Made in China products will lead to boycott of majority of products from US or European brands because even for those products most of the raw material goes from China. People need to think for the long run, is it practically possible to boycott Chinese products or is it just an emotional reaction as happened previously? If yes then how do we find replacement of Chinese products as they are used in API, mobile phones, Raw material? If we stop importing Chinese products, will it affect China or India more? People are only focused on removing Chinese apps but they don’t understand how deep is the market penetrated by Chinese products. Would a boycott of Chinese imports serve any economic benefit to India? Or would this grand experiment in self-sufficiency be futile as seen in pre-reform India? Do middle-class Indians really have an option if they want to boycott Chinese smartphones? Indian Government has passed the order of banning some Chinese apps in India, but look at those popular apps from Paytm to Swiggy and how it has become a vital part of our survival, the government could not dare to ban those apps. The Modi government is banning apps but permitting China products in India. If you look back, time and again China attacked us, we asked people to ban them and again we forgot what we decided. Till the next attack makes headlines we continue pleasing ourselves with Chinese apps. And when we talk about boycotting China, do we mean to boycott Chinese goods, or snap entire two-sided ties with the country?
The top startups in India, which include names such as Paytm, Zomato, Swiggy, Udaan, BigBasket, LensKart, CarDekho, and many others, count Chinese investors among their largest backers. In fact, according to reports, Chinese investors have pumped in $3.9 billion in 2019, up from $2 billion in 2018. In the process, they have surpassed the USA to emerge as the biggest backers of the country’s digital economy. Not just that, a think tank named Gateway House had earlier this year reported that Chinese technology investors have put in an estimated $4 billion into Indian startups. According to the same report, 18 of India’s 30 unicorns are now Chinese-funded. Apart from Paytm, Ola, BigBasket, some of the other Indian tech companies that have Chinese investors include Byju’s, MakeMyTrip, Zomato and Swiggy. If we decided to snap ties with China, what happens to these investments? And if the Chinese investors were to withdraw their money from these firms, who would replace this funding? Not just that, these startups also employ a big chunk of India’s population. What happens to them? However, this $13 billion constitutes less than a fifth of our total imports from China, which added up to roughly $70 billion in 2018-19.
Export- Rs. 1.17 lakh crore. This is what India earned from China, which constituted 5.08% export share in India’s total exports. On the other hand, Import – Rs. 4.92 lakh crore. This is what China earns from India, and it constitutes 13.69% import share in India’s total imports. The total trade between the country adds up to Rs. 6.09 lakh crore, with trade balance with China adding up to Rs. (negative) 3.74 lakh crore, which means import is higher than export. How then do we become ‘Atma-Nirbhar’? There seems to be no way that we can completely rid ourselves of imports from China. Not to forget the huge cross-border investment inflows between the countries.
India imports not just consumer goods from China, but also industrial goods that are crucial for key manufacturing sectors. Moreover, more than 100 Chinese firms have a presence in India. Chinese state-owned companies have bagged huge projects here. Some of these include Sinosteel, Shougang International, Baoshan Iron & Steel, Sany Heavy Industry, Chongqing Lifan Industry, China Dongfang International, and SinoHydro Corporation. In telecom especially, three Chinese firms namely Xiaomi, Vivo and OPPO have a 50% share of the mobile handset market. China sells us some very crucial machinery that adds to domestic manufacturing and exports. The point really is that in today’s world, supply chains are deep and complicatedly interlaced – it is just not possible for any country to not trade with the largest manufacturer in the world (China accounts for 28% of global manufacturing) and yet grow its income and share of global trade. There is no doubt that if India wants to increase its overall prosperity, it will have to grow its external trade – not trading with a country manufacturing 28% of the world’s goods is just not feasible. One can also approach Indian consumers. And a question that has to be answered is – how does it benefit India if its citizens are forced to buy the same or inferior quality goods at a higher price? If we take the telecom sector for instance, we are currently seeing a situation where BSNL and MTNL are planning to revise their tenders to exclude Chinese suppliers – it is a given that in those circumstances, costs will go up and these companies will become even less competitive than before.
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