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Boycotting Chinese goods would hurt Indian economy

By Rabi Sankar Bosu | chinadaily.com.cn | Updated: 2017-08-14 14:13

China is the biggest trading partner for more than 130 countries. With its fast economic growth, China has gained a strong foothold in global trade. The "Made in China" label is establishing it as a major player in a global economy. Asia, US, Europe, Canada, Australia, Africa and several other places import from China.

Since 2014 China has emerged as India's biggest trading partner and a country with which India has a large trade deficit also. As per data from China's General Administration of Customs, India's imports from China rose by more than 7 percent in October 2016, while exports to China fell by 11 percent, widening the trade deficit to a record $48 billion.

Over the years, Chinese products have dominated Indian market. Most of the goods that are sold in the Indian markets are “Made in China”. A recent survey by Indian pollster LocalCircles, reported in the Hindustan Times newspaper, found over 80 percent Indian consumers prefer Chinese goods “as they believe they are cheaper and that Indian goods are quite expensive”.

But it’s unfortunate that some ultra-nationalist Indian politicians have been leading a campaign to “boycott Chinese goods” for the past two years. In October last year India's ruling Bharatiya Janata Party (BJP) national general secretary Kailash Vijayavargiya called for boycotting Chinese products for China’s pro-Pakistan stand in the United Nations.

Now once again, when India and China are locked in a standoff in the border area, BJP’s state unit general secretary and Member of Parliament Shobha Karandlaje called upon people to boycott Chinese goods such as toys and consumer durables. "The BJP state executive meeting felt that we should boycott their products to teach the neighboring country a lesson," Shobha Karandlaje said in the state executive committee meet of the BJP on August 7, 2017.

This is an unwise and infantile call because such a boycott could never succeed on the ground. Such moves will not help contribute to reducing India's trade deficit but could damage India-China bilateral ties instead. By boycotting Chinese goods or not using China’s products, we will hamper our economy more than China’s economy like a famous proverb- “Digging our own grave”.

The boycott decision by BJP comes in light of the growing tension at the border. It also follows a sharpening of differences between India and China over Pakistan, a transit corridor China is building through Pakistan-controlled Kashmir and China's stand on the Nuclear Suppliers Group.

Social media has erupted in crusade urging Indians to shun Chinese products and buy Indian products instead. A large section has taken to social media and is also spreading the call for boycott by word of mouth. The opinion generators on instant message applications are high on rhetoric but rather poor on facts.

Honoring the public mood, traders have boldly displayed “No Chinese goods sold here” boards outside their shops. However, active participation as of now does not involve common people burning of all Chinese goods. The irony is that the mobile phones with which messages of boycotting Chinese goods are sent or received are fully or partially made in China.

In an op-ed published in the Global Times on August 7, 2017, Wu Shunhuang, CEO of Hong Kong-based space-sharing firm Inworks, said, "In the past years, similar movements have also been launched several times, but none of them were able to hurt Chinese manufacturers. So the actual effect this time would be more like much smoke and little fire."

Each year during the festivals, Chinese products, including decorative lights and lamps, gift items and firecrackers worth millions of dollars, are sold across India. But last year the sale of Chinese goods witnessed a dip in all areas. Wholesalers in India’s largest wholesale market Sadar Bazaar in Delhi claimed that they suffered at least 30 percent loss due to the boycott of Chinese-made products. Reportedly the sale of Chinese goods not only dipped in urban pockets but rural areas as well.

In a mistaken belief, many Indians think boycotting Chinese goods will put pressure on China. On the contrary, it will harm India as India is dependent on Chinese imports. Boycotting Chinese goods will result in Indian traders’ loss, as they first purchase all this stock from China, and then they sell it in India. If boycotted, it means Indians are self-destructing their economy, as those traders contribute to Indian economy by paying tax.

Protectionism against Chinese companies and boycotting Chinese goods on the pretext of political issues will not help bridge the yawning Sino-India trade deficit, instead only damage bilateral ties between our two countries. According to statistics from China's Ministry of Commerce (MOFCOM), India initiated 12 investigations against Chinese products in the first half of this year, becoming the country with the most trade-related probes against China. But it is wrong to resort to such measures to drive Chinese products out of the local market as it will not be conducive to the long-term development of the bilateral trade between our two countries.

As per data available on the website of the Chinese embassy in New Delhi, China is the world’s largest trading nation in goods, with its exports in 2015 amounting to $2.2 trillion. The exports to India accounted for only 2 per cent of China’s total exports and India’s boycott of Chinese goods will not have much impact on China’s exports. China-India trade cooperation has deepened over the years and the bilateral trade has grown 24 times in 15 years, from $2.9 billion in 2000 to $71.6 billion in 2015. China's exports to India totaled $58.33 billion in 2015. India's exports to China dropped 12 percent from 2015 to $11.76 billion.

It should be noted here that Chinese goods have also helped to keep prices low in the Indian market, thereby helping the Indian poor. There is no doubt that Chinese products not only lowered India’s inflation rate but also fulfilled Indian ordinary people’s, especially the low-income people’s, daily needs and greatly improved their life quality.

The rising calls in India for boycotting Chinese goods have been mainly led by some BJP leaders and supporters. However, the passionate call for boycotting Chinese goods has not achieved a big success. India has a huge market for Chinese goods. Chinese goods have never been condemned by the Indian consumers and are popular across the nation. The recent survey of Indian consumers has clearly showed that over 80 percent prefer Chinese goods over Indian ones.

Indeed, products from China have entered every living room in India. From the restroom to the guest room, the bedroom to the drawing room, the garage to the pantry, Indians cannot stay without Chinese products. The ground reality is that Chinese goods are cheap. They are not faulty and harmful. They last long and well; they appeal to the eye.

The call of boycotting Chinese-made products is not a solution to the border standoff as such type of call is totally illogical, wrong, and unexplainable in accordance with WTO rules and regulations. Indian nationalistic politicians ought to remember the old adage that “consumer is king” at all times. Without proper substitutes, the biggest losers of the boycott of Chinese goods will be Indian traders and consumers. It's a bitter truth that India is really in no position to avoid using Chinese goods.

Rabi Sankar Bosu is the Secretary of New Horizon Radio Listeners' Club in West Bengal, India.

 

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