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Can India steer its course away from Chinese goods?

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Undergraduate student from the Department of International Relations at Jadavpur University.

The staggering relation between India and China has achieved a new height with the recent border dispute near eastern Ladhak. The Chinese expansionist policy, newly fomented by Indian infrastructural developments near the Line of Actual Control (LAC) has led to the rise of “boycott China” roars in the social media. This escalated with the video of Sonam Wangchuk, an engineer and educational reformist from Ladhak, surfacing online. He propagated boycotting Chinese items to weaken the communist nation economically rather than using military forces. This followed by the emergence of a trending application known as, “Remove China Apps” in the Google playstore, helping users to identify and remove Chinese applications from their smart phones. After about 5 million downloads in the recent weeks this app was pulled down by Google for not abiding by its policies. But this anti-China sentiment is it actually in sync with the ground realities?

Very recently the change in India’s FDI policy targeted at Chinese companies after the People’s Bank of China acquired 1.01% stakes in HDFC bank was a poignant move to let our South Asian neighbour know that we have not let our guards down even amidst the pandemic. But the adventurism of boycotting Chinese products all together can make India pay a hefty price.

The looming question is: Are we ready to take the risk of cutting all trade related ties with China? Especially during this health emergency situation when the number of COVID 19 cases are touching new heights every day, India should not forget that around 70% of its imports of APIs (Active Pharmaceutical Ingredients) come from China. In 2019, China exported 10.12 million tonnes of APIs, up 8.83% year-on-year, data from the China Chamber of Commerce showed.  In fact the ramifications of API shortage due to the lockdown gave a judder to the Indian Government. Since this API sector is a humongous source of pollution, India’s Pollution Control Board has imposed stringent laws causing India’s API sector slow down over time, and thereby, increasing its dependence on Chinese API.

While Chinese FDI will now have to go through stringent checks by the Indian government instead of a more direct route, it might turn into the opening of a Pandora box for Indian businesses and start-ups. With Chinese investments tantamount to 1.8 billion USD in India, companies like Swiggy, Zomato, Byju’s,  Paytm, Ola, and several other unicorns receiving gargantuan flow of money from Chinese investors might suffer from a setback. While China seems to be an anathema for most Indians we must realise that multitude of citizens in the country are surviving on affordable Chinese products like smart phones, electrical equipments, home appliances, automobile parts,etc. that have flooded the Indian market. Also, since India does not want to slump down from its 63rd rank (out of 190 countries) in the Ease of Doing business index, immoderate vetting can be noxious. In this age of globalisation, when a single product is made through the culmination of Chinese equipments, Indian labours and American intelligence, it is implausible to distinguish a “pure” Chinese product from a “pure” Indian product.

Nationalist sentiments and market politics do not go hand in hand. This is the very reason, China is our largest trading partner and while Pakistani misdemeanours are dealt with surgical strikes, Chinese felonies are dealt through negotiations and peaceful talks. The preponderating strength of our neighbour cannot be snubbed down by hasty attacks and waging wars can prove to be economically fatal in times like this. Thus upsetting China is not a feasible option. Public opinions are often clouded by banal conceptions which fail to see through the myriad nooks and corners of international politics. Smooth flow of information and a steady lock on the dissemination of fake news are the pillars for building a nation of well informed citizens.

The need of the hour is robust domestic policies on the lines of self-reliance. India has already become the second largest manufacturer of PPE kits after China. It is now strategising policies to provide stimulus to drug manufacturing units through improved pollution controlling technologies in order to reduce its dependence on Chinese APIs. While Atma Nirbhar Bharat Abhiyan is eyeing to boost up MSMEs, the local to global initiative can only be realised through overcoming the demand slump prevailing in the Indian economy. Unless the middle and lower middle income groups are provided with helicopter money (in hand), Indian companies cannot loosen themselves from the grip of Chinese competition.

Further a sustainable economy and strong monetary foundation is the first major step in outweighing international foes. Indigenous businesses can also take advantage of this China averse atmosphere and market Indian products at modified prices. Thought it is preposterous to steer away from the Chinese coast immediately, India can initiate paving its way to self-sustainable market regulatory policies and formulate an expedient framework towards its goal of 5 trillion dollar economy. 

About the author: Mouboni Dutta is pursuing her bachelor’s degree from the Department of International Relations at Jadavpur University, Kolkata, India. 

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Undergraduate student from the Department of International Relations at Jadavpur University.

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