Why in the News?

  • According to China’s trade figures, India’s imports from China reached a record $57.51 billion in the first half of the year.

India-China Bilateral Trade

  • China is India’s enormous trading partner.
  • Major items imported from China into India were: electronic equipment; machines, engines, pumps; organic chemicals; fertilizers; iron and steel; plastics; iron or steel products; gems, precious metals, coins; ships, boats; medical, and technical equipment.
  • Major items shipped from India to China were: cotton; gems, precious metals, coins; copper; ores, slag, ash; organic chemicals; salt, sulfur, stone, cement; machines, engines, and pumps.

Recent measures to curb imports from China

  • Say the pandemic or the border conflict, but the impact is identical: some Indian enterprises are boycotting China.
  • The state is now inviting Indian e-commerce firms like Flipkart and Amazon India to tag the country of origin for all products traded on their websites.
  • The government barred many Chinese mobile applications, including leading social media fora such as TikTok, Helo and WeChat and games such as PUBG.

Can we completely boycott Chinese products?

  • Trade debts are not necessarily bad: Both Indian customers and Chinese producers are gainers via trading.
  • Will hurt the Indian poor the most: This is because the needy are more price-keen.
  • Will punish Indian producers and exporters: Several firms in India import intermediate goods and raw materials, which, in turn, are used to form final goods both for the domestic Indian demand as well as the global market.
  • The pharmaceutical sector could be the worst hit: For example, with nearly $3.6 billion in assets of elements that Indian drug-makers import to manufacture several vital medicines, China catered to about 68%
  • Will barely hurt China: As per the United Nations Conference on Trade and Development (UNCTAD) data for 2018, 15.3% of India’s imports are from China, and 5.1% of India’s exports go to China.
  • Chinese money funds Indian unicorns: India and China have also evolved and increasingly merged in recent years.
  • India will lose policy credibility: It has also been indicated that India should withdraw from current contracts with China.

Way forward

  • In the prolonged term, beneath the flag of self-reliance, India must form its domestic capabilities and achieve a higher percentage of global trade by boosting its competitiveness.
  • The government’s “Atmanirbhar” principle is anticipated to aid ministries' handhold industries where self-reliance ought to be constructed.
  • In the long run, a more adequate strategy is required to be built to deliver an ecosystem that handles the cost disability of Indian manufacturing ruling to such imports.