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Boycotting Chinese products will require collective action

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“Boycott Chinese products”! This is a slogan that had started coming up when the world over people started demanding accountability from China for the spread of the Coronavirus in the world. But now this slogan is ringing louder than ever after 20 Indian soldiers were killed in a clash with Chinese forces at the LAC in Ladakh.

Earlier it was believed that greater economic links with India will encourage China to invest in a relationship of trust and friendship with India, but that has not happened. It is time perhaps to shift the gears.

Chinese Products have flooded the market

Chinese products are everywhere. If you could identify them perhaps you could choose not to buy them and instead go for an India made product or one of their global rivals. Take mobiles for instance. According to data from Counterpoint Research, Chinese companies like Xiaomi, Vivo, Oppo and Realme have cornered nearly 60% of the market share in the first three months of 2020. In contrast Indian mobile companies like Micromax, Intex and IBall don’t have enough takers to merit a separate listing).

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While you can choose to buy a Samsung or Whirlpool refrigerator over a Chinese brand like Haier, can you shun power produced by Sagardighi Power Plant or Barmer Power plant which is using equipment by China’s Dongfang Electric? You can choose to buy a Mahindra SUV over one made by Chinese MG, but can you afford to renounce even generic antibiotics made by Sun Pharma or Cipla when they use Chinese intermediates to make drugs?

Only recently did the USA beat China to become India’s biggest trading partner. Between April-December 2019-20, the bilateral trade between India and China stood at $64.96 billion. In 2018-19, India has a trade surplus of $16.85 billion with America, while it has a deficit of $53.56 billion with the neighbouring country.

Chinese Investment in India

From Diwali lights to Ganesh idols Chinese products have flooded our markets. Indian companies can barely withstand the onslaught of state subsidised cheap exports from China. But that is not the only problem.

According to think tank Gateway House Chinese companies have invested $4billion in India’s tech start-up sector alone. These investments could be small, but China via tech sector is embedded in Indian society. Chinese investors have already cornered major stake in 18 out of India’s top 30 Unicorns and start-ups like Paytm, Big Basket, Byju’s, Delhivery, Flipkart, Hike, MakeMyTrip, Ola, Oyo, PolicyBazzar, Quikr, Rivigo, Snapdeal, Swiggy, Uddan, Zomato.

So while these apps are made and run essentially by Indian startups, they have investments from Chinese investors like Alibaba, Tencent and Bytedance. Chinese apps like TikTok which have courted controversy over sharing of fake news have notched up millions of subscribers in India. While shunning all services where Chinese investments are made is easier said than done, the government may have to tighten curbs and signal that it cannot be business as usual with China. China can not be behaving like an enemy and expect to rake in profits from the huge Indian market.

Maharashtra, June 17 (ANI): Protest against China for killing 20 Indian soldiers in Galwan valley of Ladakh through painting by an art school, in Mumbai on Wednesday. (ANI Photo)

How can we send a message to China?

Recently the government took a major decision to ban foreign direct investment (FDI) under the automatic route from countries having land borders with India. Chinese tech investments are not always very big- rarely over $100 million – and made by the private sector, which doesn’t cause immediate alarm. Indian start-ups rely heavily on overseas venture capital (VC) funding – all start-ups worth over $1 billion are foreign-funded. Start-ups with compelling ideas and execution should be able to find willing investors from around the world.

If we are going to stamp out Chinese products from our markets, government will have to incentivise local business and encourage manufacturing in India. India’s manufacturing companies will have to start making things from ground up in India and avoid importing Chinese products and rebranding them. India prides itself with an indomitable spirit. What’s required now is a political will and the determination of people if we want to send an economic message to China.

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