The chorus for the boycott of Chinese goods in India has grown as a result of the brutal killing of 20 Indian soldiers in a violent face-off along the Line of Actual Control (LAC) in Ladakh’s Galwan Valley on June 15, 2020. It is for the first time after 1975, that India-China violence has resulted in fatalities.
Tensions along the LAC are unlikely to die down soon, if one were to go by statements emanating from the Chinese and Indian side on June 25, 2020 (India has sought restoration of the status quo, and disengagement of troops). China has recently faced global criticism for its lack of transparency with regard to COVID19, and has been exhibiting belligerence not just in South Asia, but South East Asia as well. It does not seem to have an iota of interest in reducing tensions across the LAC, instead, it wants to achieve its objective of ‘salami-slicing’ without much effort.
Over the past week, there have been hashtags of #boycottgoodsfromChina on social media, and images of individuals breaking TV sets in Gujarat have been telecast on TV channels.
Steps taken by the government
One of the first steps, the Government of India took to send a tough message to the China post the violent clashes at the India-China border, was the decision that BSNL and MTNL would shun the use of Chinese equipment for the upgrade of 4G technology.
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Other measures, which the central government has taken with the aim of reducing Chinese imports is that it will soon be compulsory for e-commerce companies to display clearly, whether a product being sold on their platform is made in India or not. A list of non-essential items is also being prepared by the Government for which dependence upon Chinese goods is being reduced. The Delhi Hotel and Restaurant Association (which represents budget hotels and guest houses) has also announced, that it will not provide accommodation to Chinese tourists, at any of the hotels or guest houses associated to it, nor will it use Chinese goods as a mark of protest against the killing of soldiers.
Senior ministers including Union Minister of Consumer Affairs, Food and Public Distribution Ram Vilas Paswan called for a boycott of Chinese goods, while one Minister Ramdas Athawale called for a boycott of Chinese food.
In the midst of the chorus, there were some voices of sanity, such as of Former Prime Minister HD Deve Gowda. Gowda in a statement issued for the all-party meeting stated ‘reactionary’ language of economic boycott. “Its implications are deep. We should be guided by pragmatism.” The Former PM, being a mass leader understands the perils of a hyper- nationalist discourse better than many who are proposing drastic solutions.
Numerous commentators have highlighted the point, that a boycott of Chinese goods will harm India, more than China.
First, India is China’s 12th largest partner, while China happens to be India’s largest partner. India’s imports from China (that is, China’s exports) are just 3% of China’s total exports, while China’s imports from India are less than 1% of its total imports. China accounts for 5% of India’s exports and 14% of India’s imports.
Second, cheap Chinese goods have meant that many consumer items, especially electronic goods, like Air Conditioners, LCD’s, mobile phones have become more affordable for the middle class. Not only has the middle class been able to get access to items which it would have been unable to, if not available at reasonable prices, but because it has spent relatively lesser on these items, its own economic condition has improved.
Third, even if one were to move beyond finished goods, India is dependent on China for intermediate products. For instance, a large percentage of active pharmaceutical ingredients (nearly 2/3rd) come from China the rest of them come from countries like Germany, Sweden and Italy. China provides these ingredients at cheaper prices than other markets. India is looking to increase the production of pharmaceutical ingredients domestically, ramping up domestic production of these ingredients is likely to take time and can not happen overnight.
A boycott of goods is fine in terms of rhetoric, but a better way of sending China a clear message would be to introduce restrictions in specific sectors, and to introduce anti-dumping laws. This point has been made by a number of commentators. The US, the UK, for instance, are trying to reduce their dependence upon China for medical supplies, and the US has brought in some strict laws with a view to reducing its dependence upon China. The approach of reducing imports of non-essential Chinese items is the route which India should also take, as mentioned earlier the government has indicated that it is likely to adopt such an approach.
Even politically, a blanket boycott sends a wrong message as though India is not self-confident and has not moved beyond the ‘1962 syndrome’. This in spite of the fact, that it has made impressive strides in the past 58 years, and is an important player on the world stage.
There is a difference between rhetoric and realities, experienced commentators and senior politicians, like Former PM HD Deve Gowda with their ears to the ground, understand the implications of rash decisions and jingoism. While it is important to take a firm stance, and not kowtow to China, it is important not to fall into the trap of a hyper-nationalist narrative, set by a handful of strategic commentators and sections of the electronic media who are just seeking to increase their TRPs. India needs to deal with the China threat at various levels. Apart from dealing with the current issues at hand, it needs to come up with a long term strategy both in the economic and strategic context. In addition to bolstering security ties with the US, Australia, Japan and Vietnam, there is a need to get the domestic economy back on track.
Arvind Panagriya, Professor of Economics at Columbia University and a former Vice Chairman of the Niti Aayog, in an article for Times of India reiterates this point. Panagriya said:
….. India’s urgent economic problem is to rebuild the economy and return it to the 7.5% growth trajectory on which it had been traversing before the disruption in the financial sector derailed it. Under such circumstances, piling up yet more disruption on the real economy through trade sanctions is hardly a wise step.
A simplistic approach towards Beijing is unlikely to be successful, New Delhi needs to be nuanced and imaginative and refrain from unnecessary rhetoric.
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Consulting Editor, Geopolitics with The Dispatch, Tridivesh Singh Maini is a New Delhi-based Policy Analyst. He is associated with The Jindal School of International Affairs, OP Jindal Global University, Sonepat, Haryana. He is a former SAV Visiting Fellow (Winter 2016) with the Stimson Centre, Washington DC. Mr Maini was also an Asia Society India-Pakistan Regional Young Leaders Initiative (IPRYLI) Fellow (2013-14), and a Public Policy Scholar with The Hindu Centre for Politics and Public Policy, Chennai (November 2013-March 2014). His research interests include; the role of Punjab in India-Pakistan ties, the Belt and Road Initiative (BRI) and the changing nature of Indian federalism. He is a contributor for a number of publications including; The Hindu, The Diplomat, Modern Diplomacy and The Geopolitics.