China Feels The Indian Boycott Heat : Chinese Exports To India crash 24.7% in 2020
Mainland China’s exports to India since January 2020 have fallen by 24.7 per cent year-on-year to $32.28 billion as per customs data from the Chinese government itself. This comes at a time when the call to boycott Chinese products has amplified sharply in India since May after the Chinese PLA attacked the Indian troops in Galwan.
China is probably trying to placate India as their import from India have gone up 6.7 per cent since January this year to $11.09 billion. Consequently, total trade with India has registered a slightly lower drop by just 18.6 % since the beginning of 2020 to at $43.47 billion.
The above changes have occurred due to Corona but now the Chinese will start feeling the actual heat of the Indian decoupling of economy with China.
Since the Galwan clash, India has been working on policies to decouple from the Chinese supply chain in a phased manner. It has already stymied the influx of Chinese goods into the country. The Directorate General of Foreign Trade (DGFT) announced compleye restrictions on import of television sets late in July and is encouraging local manufacturing. In the financial year 2019-20, India had imported TV sets worth $300 million from China and $400 million from Vietnam. The total value of imported TV sets during last fiscal stood at $781 million.
India is also taking measures to prevent trade partners, mainly in Southeast Asia, from re-routing Chinese goods to India with added value, according to a Reuters report. This move will mainly target imports of base metals, electronic components for laptops and mobile phones, furniture, leather goods, toys, rubber, textiles, air conditioners and televisions, among other items.
Meanwhile, Chinese smartphones’ share in Indian marked fell to 72 per cent during the June quarter 2020 from 81 per cent in March quarter 2020. Xiaomi, a market leader in India, is working on a new version of MIUI that will omit its proprietary applications banned by the government. In fact mobile phones from China should get banned 100%.
The government is also planning to impose licensing requirements for import of goods from 20 sectors, including furniture, toys, sports goods, textiles, air conditioners, leather, footwear, agro-chemicals, CCTVs, ready-to-eat food, steel, aluminium, electric vehicles, auto components, TV set-top boxes, ethanol, copper and bio fuels, to boost local manufacturing of these items. Over a period this should be banned 100%.
Reports have suggested that India is also looking to hike customs duty on imported active pharmaceutical ingredients (APIs) by 10-15 per cent. The Indian pharmaceutical industry depends heavily on imports from China, with 68 per cent APIs and more than 90 per cent antibiotics being sourced from the neighbouring nation.
China should know that there can be no business as usual. They cannot attack and kill our army personnel on the borders and then expect that we will carry out trade with them and have any cultural or social or educational relationship.
India is ready to face economic difficulties but will ensure full decoupling.
