Boycott China: Is It Feasible For India?

In the after effects of Indo-China border skirmishes that escalated leaving 20 Army personnel martyred throughout the face-off at the border, have agitated the citizens who are summoning for boycotting of Chinese merchandises in the Asian nation.

Made in China commodities have invaded every inch of household even as traders and manufacturers massively rely upon raw materials and imports from the neighboring nation. Even the government has started concentrating on India’s production and building autochthonous commodities that can compete in the world market, however, the concept of boycotting Chinese goods doesn’t resonate well given our limited capabilities.

  Why China’s merchandises are so popular in India?

• The basic reason for the popularity of Chinese products in the Indian market is the low costs of its products. Due to low prices, wholesalers purchase Chinese stocks in bulk and sell these products at higher costs so that they can earn an enormous profit. India’s biggest wholesale market in Delhi’s Sadar Bazaar has nearly 40,000 retailers that sell Chinese commodities. Virtually everything on the shelves like toys, electronics, watches, home appliances – is created in China.
  
  
• The cost of production in China is low due to the availability of the inexpensive working class.
  
  
• The cost of production of Indian makers is high due to expensive material, the old technique of production, and higher fixed costs. Because of the higher value of production, Indian goods cannot compete with Chinese commodities in India and at the universal level. Thus people prefer to purchase Chinese stocks.

Tradesmen say they are ready to boycott Chinese imports but with conditions solely. They said the government should scale back excise duty and provide financial support to small scale manufacturing industries and encourage them to boycott China products. 

Approximately 70 percent of electrical items come from China. It is unfeasible to throw Chinese items on the road in the economic crisis.

 Can the government afford to boycott Chinese goods?

Boycott Chinese products are easier said than done because India’s trade with China explicitly reveals our dependence on the country for sourcing multiple goods. 

The insufficient production capabilities of India had enabled China to emerge as the biggest exporter of user commodities as well as technological advancement in terms of machinery and industrial resources additionally helps China to export products at a lower price than the importing country’s market value or its cost of production.

Thus, the boycott of Chinese products is feasible if there’s an alternative resource that can match up to the price and availability of Chinese merchandise.

The economic decisions at the government level will have to take a sensible approach because numerous industries are dependent on imports from that country.

India can impose anti-dumping duty but around one hundred Chinese commodities can be impacted by anti-dumping actions including future investments from China. The economic ties might also be hampered with the Chinese companies bidding for vital projects such as the 5G market, as per the report. The solar industry will be badly affected because of its dependence on raw stuff sourced from China.

The idea to ban Chinese products may not look effectively doable, but on a personal level citizens can start using homegrown brands or alternate brands which will positively create a case against China by challenging the market share of its stocks in the country.

Can India replace China in Technology and Telecom sector with Government’s Incentives & Funding?

 Indian government’s decision to implement a blanket ban on the utilization of Chinese products, deals, and equipment for the telecom companies is seen as a strategic move to scale back dependence on China.

 The ongoing dispute between India and China, the government has strongly determined to halt Chinese deals and accessories for all mobile service providers in India owing to “network security” concerns.

” India can replace China as a leading low-cost, high-technology telecom and technology equipment supplier, provided it gets the right amount of government incentives and funding to compete with global players in the world market, said by top business leaders”.

The Department of Telecom (DoT) has informed Bharat Sanchar Nigam Limited (BSNL)to not use Chinese material in its up-gradation to 4G network, which is an element of its rehabilitation package. The Department has also conveyed a similar message to Mahanagar Telephone Nigam Ltd (MTNL).

 The service providers of the nation have been asked to alter conditions in such a manner that Chinese firms are not able to participate in the process of tender. They have been asked to eliminate all previous tenders for telecom tools.

 In telecom, three Chinese firms, Xiaomi, Vivo, and Oppo have a 50% share of the mobile handset market. Due to the government decisions, they are now under pressure but Oppo recently canceled an online launch due to #BoycottChina. China is one of the vital exporters of telecom equipment to India and this decision is probably going to impact the 4G up-gradation purchase method.

 Not only the technology and telecom sector even the Railways PSUs have also determined to cancellation its signaling contract with the Chinese firm Beijing National Railway Research & Design Institute of Signal & Communication.

In 2016, India had signed a Rs 471 Crore worth project with the Chinese company. Railway authorities are not satisfied with this company due to its working methods and not sharing information. Although its project is funded by the World Bank and has been given in the World Bank’s arbitration, the Railways has decided to address a letter to the World Bank requesting cancellation of its contract because of the company’s non-performance and poor quality.

From the state-run mobile service providers to Indian Railways PSUs, Indians companies have determined to bar Chinese vendors.

How India can restrict the entry of Chinese merchandise?

India can restrict the entry of Chinese commodities in the market by imposing protective tariffs and countervailing duty on inexpensive Chinese products like toys and electronic things. After imposing these two duties the costs of Chinese commodities increase in the Indian market, hence Indian manufacturers will have the possibility to produce these products on Indian soil which will generate trade and employment in India.

 Conclusion -The aggravated ongoing dispute between India and China has triggered a call to boycott Chinese products in the country, but it will be very difficult for Indians to boycott Chinese products in this situation when people have no money to buy Indian products and invest in the Indian market.