Is A Boycott Of Chinese Made Products A Good Idea For India?

The Confederation of All India Traders, or CAIT, a trade group that represents 70 million Indian traders and 40,000 trade associations, has launched a national campaign to boycott some 3,000 Chinese products.

Citing that cheap Chinese imports have undercut Indian businesses, CAIT stated: “The time has come when the traders and people of the country should unite and boycott Chinese products.”

However, due to the prevailing Covid-19 pandemic, the details of the campaign will be delivered to traders via video conference.

“Apart from this, CAIT will also run a big campaign across the country through social media and will connect more and more people to this campaign,” the organization added.

Harish Garg, president of CAIT’s chapter in Chandigarh said the campaign will “not only motivate traders not to sell Chinese goods but also urge Indian consumers to buy indigenous products in place of Chinese goods and in this way Prime Minister Narendra Modi’s call ‘Vocal for Local’ will also be [fulfilled].”

Garg added: “To achieve this goal, CAIT has prepared a comprehensive list of about 3,000 products imported from China, for which Indian substitutes and alternatives are easily available and Indian customers will also not mind because all those things are already made in India.”

The products on the boycott list include low cost consumer goods, toys, fabrics, textiles, stationery, paper, food items, electronics, among others.

CAIT Secretary General Praveen Khandelwal and National President B.C. Bhartia assert that China has been “India’s antagonist" and said the organization has been “continuously campaigning from time to time" for a boycott of Chinese products over the last four years.

“As a result of these initiatives, [imports] from China have dropped from $76 billion in 2017-18 to $70 billion at present," the organization said.

CAIT now wants to reduce the volume of imports from China to $13 billion by December 2021.

CAIT also alleged that imports of Chinese goods into India have skyrocketed from only $2 billion in 2001 to $70 billion in 2019. “This staggering figure clearly shows how China has tried to capture Indian markets which is one of the world’s largest," CAIT said.

India’s relations with China have also worsened over geopolitical matters as troops from both nations have been locked in a standoff for weeks at various points along the disputed Himalayan border.

As such, other voices have also sought to boycott China.

Sonam Wangchuk, an engineer from Ladakh in Kashmir, appeared in a "boycott China" video that has circulated widely on social media platforms.

Wangchuk urged Indian consumers to hurt China financially by removing all Chinese apps from their mobile phones and to get rid of their Chinese-made cellphones and any other products made in China.

However, boycotting Chinese products may be close to impossible.

"It's hard for Indians to get rid of [Chinese apps] overnight," said technology journalist Sahil Bhalla. "The ascent for Indian apps on the Google Play Store and Apple's App Store has been very slow."

Bhalla noted that many Chinese tech firms consider India their biggest and most important market and that Chinese companies have invested billions into India's tech sector and hired many local workers.

Some economists also oppose blanket boycotts.

Biswajit Dhar, professor at the Center for Economic Studies and Planning in the School of Social Sciences, Jawaharlal Nehru University in New Delhi, said: "India is a resource-constrained country and it is searching for foreign investment. If you are leaning on foreign investment, you are going to be attracting foreign firms. So if you ban or boycott foreign products, what will you do about these foreign companies?"

Dhar also indicated that China's most dominant influence in India has to do with trade, not investment.

India's trade deficit with China stood amounted to about $65 billion between 2018 and 2019.

"In this day and age [of trade wars], these sorts of [boycott] measures may not pay off in the long run," Dhar said.

Sadanand Dhume wrote in the Wall Street Journal that decoupling from China makes no sense for India.

“Instead of prickly nativism, India needs economic reform and lower trade barriers to compete effectively with China,” he wrote. “Anti-Chinese sentiment in India [is] running high. Many Indians blame Beijing for the coronavirus, which has battered the Indian economy.”

An online survey by News18, an Indian media company, revealed that 91% of respondents supported a boycott of Chinese goods.

“There’s a broad sense in India that many of the international rules of the game, whether in trade or finance, have been exploited by China,” said Cornell University economist Eswar Prasad. “The question is: How do you maintain productive trade and economic links with China without getting swallowed up by China?”

Dhume asserted that while India has some legitimate grievances with China, Chinese trade and investment benefit India.

“China’s emergence as India’s second-largest trading partner after the U.S. has helped improve living standards by providing Indians with competitively priced goods,” he wrote. “More recently, China has become a major investor in India as well… Current and planned Chinese investment in India has crossed $26 billion, up from $1.6 billion invested in 2014,” including many Indian tech startups.

Dhume concluded that the “size and scope” of India’s economic ties with China make it impossible for New Delhi to “decouple without big economic disruptions.”

“The Chinese market is too large to walk away from, and Indian startups need capital that Indian investors alone cannot provide,” he added.

Author Vivek Kaul pointed out that Indians buy Chinese goods because they often offer better value than locally made counterparts.

“There is a Chinese import in almost all aspects of our lives,” he wrote. “The medicines we have (ingredients that go into making medicines are imported from China). The electricity we use (electrical machinery is imported from China). The computer I am typing this piece on (most laptops are assembled in China). Even the milk I use to make coffee is dependent on Chinese imports (industrial machinery for dairy). The food we eat may have used fertilizer imported from China.”