Exploring Possibility of Reducing Reliance on Chinese Products

Aatmnirbhar Bharat has been the buzz word ever since our PM Mr. Narendra Modi called for Self Reliance or complete dependence on Indigenous products for all Indians. This concept of Self Reliance should have been implemented far earlier, now that the craze of Foreign brands and cheap, good quality Chinese products has made its way through all the Indians’ hearts and minds and will be very difficult to live without.It is very easy to call for Self reliance without ramping up our local production and product quality but equally difficult to implement.

I recently purchased a Laptop of Brand HP for myself thinking HP is an American brand and this way i would boycott Chinese products.Little did I know that all the Laptops for Sale in Asia Pacific region of HP are manufactured in China but marketed by HP Inc, America. This is how deep Chinese have entered in our land. If you go for alternatives , Lenovo, Asus are all hardcore Chinese brands and Dell is again manufactured in China. We all start looking in our pockets whenever we hear popular Xiaomi ringtone. Oppo,Vivo,Redmi are all Chinese and in today’s time more than 60% of Indians are reliant on these brands for mid-high end smartphones. So what makes China this huge a power that is difficult for world to live without its products :

1. China is a communist country where rights of people are severely suppressed and human resource is highly exploited in name of providing service to nation.
2. Chinese companies get Huge support from Chinese Communist party, get interest free loans,cheap electricity and water,cheap labour and this is why they can produce large number of goods at negligible cost.
3. Environmental norms are highly relaxed, easy environmental clearances for setting up industries hence Chinese enjoy monopoly in producing cheap good quality products.
4. China spends approximately 200 billion dollars each year on R&D to improve quality and innovation.

India is hugely reliant on Chinese for its domestic market in vast category of products.

1. China is one of the largest trading partners of India with bilateral trade between 2 countries accounting for almost 93 Billion dollars.Current trade deficit b/w India and China is 56 billion dollars.
2. India imported goods worth 75 billion dollars last year and imported just 18 billion dollars worth of goods which is Huge sign of worry for the Govt as trade deficit is highest in the world.
3. 80–90% of API(Active Pharmaceutical Ingredients) used to manufacture Medicines in India are imported from China. India is 3rd largest Pharma industry in the world but without Chinese API’s we cannot manufacture them as was observed during lock down in China when there were supply shortages of raw material in India due to closed supply lines.
4. 70–85% of Global solar panels are manufactured in China.
5. 75–80% of High Speed rail systems , Agriculture machinery is Made in China.
6. 40–50% of Cargo ships are made using Chinese material.
7. 60–70% of Electronics components and finished products are imported from China, assembled in India and sold in India and other nations.This included Mobile phones, accessories, Laptops and other Electronics components.
8. India mainly provides primary material like rice,cotton,diamonds,jewellery,yarn,garments,generic medicines and petrochemical products to China.
9. India imports manufactured items from China to meet demand of fast growing power,energy and Telecom sector in India.

Reasons why India cannot abruptly cut ties with China and Chinese products :

1. India is dependent on China for supply of Raw materials for manufacture of Life saving drugs in India.
2. 80% of Medical equipment used in hospitals is imported from China.
3. 30% of Automobile parts, 80% of Toys ,Cycle components are imported from China.
4. Indian middle class is dependent on Cheap Chinese consumer durable. 60% of home appliance market and 70% of Mobile phones market is captured by Chinese companies.
5. China has invested huge sums of money in Indian startups like Byju’s,Paytm,Flipkart,Ola,Big basket and without Chinese funding these companies would not have reached where they are today. Recently Indian Govt has made Govt approval mandatory for any FDI from India’s neighbouring countries in any of the Indian company via Direct or Indirect route. This rule is made primarily for China to prevent hostile takeovers by Chinese companies as Indian companies have lost huge valuations in recent Stock Market crash due to Corona Pandemic.

So where it is that India can explore possibility of being self reliant and reducing usage of these items to reduce imports :

1. India imports firecrackers to the tune of Rs.1500 crores each year which spoil the Environment. India can cut on its usage in future.
2. Drug manufacturers must start diversifying their importers of raw materials and look towards other countries like Taiwan,South Korea and the West.
3. Setting up of factories and manufacturing plants of Foreign companies in India must be promoted by Govt, Regulatory clearances from all ministries must be expedited, tax concessions must be provided initially to these companies to reduce costs, cheap labour and other facilities must be provided.
4. Last year 56 companies exited China, 26 moved to Vietnam,11 to Taiwan,8 to Thailand, 2 to Indonesia and only 3 came to India.This shows more work needs to be done to make attractive policies to attract these companies into India.

India needs to first reduce and diversify its importers , start to manufacture locally,boost exports,improve product quality and cost of setting up Industries in India and then slowly reduce dependence on China. Only then we can become Self Reliant.