The path towards self-reliance
The relation between India and China is at an all-time low. There is tension across the border between the two nations. Indian army has been given the power to give a befitting reply if any cross border activity is observed by the Chinese People’s liberation army. The reason for all this is the Galway incident that happened last week which resulted in the Marty of 20 Indian soldiers.
Now we don’t know the casualties on the china side and we don’t expect the government to come up with the number of casualties, as the history tell us that government of China is known for hiding information. But reports by different news agencies tell us that there are more casualties on the Chinese side.
But India has taken this issue seriously. The tag line #Boycottchina become a slogan since the event has happened. Every Indian has come out and spoke about the importance to reduce our dependence on China. And we already know about the different Chinese apps that are under pressure as people of India are against those.
Citizens out on the streets calling for a complete boycott of Business with china. But a reality check on this, can India really boycott Business with China suddenly out of blue. The answer to this is undoubted NO.
Let us get the numbers straight. China is India’s second-largest trading partner. China benefits more from trade with India. India exported about $16 Billion and Imported about $65 Billion in the last financial year. India’s import bill is 4 times bigger than the export bill. This is called the trade deficit, And the trade deficit is about $48 Billion. Not the number speaks it all. If the trade deficit is brought down then it will be a befitting reply to china the power on India. If this number is brought down, then china will suffer.
But to reduce this trade deficit, India must move cautiously. with a view to harming the neighbour, India must not inflict damage on itself. Announcing a complete ban without building up the local or domestic products will be like breaking out own arm to break down the wall.
Now the Indian government has taken the serious of Galwan valley incident and wanted to give a befitting reply to the neighbour. But it cannot go for a war with a country. This is a new India and it wants to show its power in all the ways possible and trade is one way to break a countries economy. Now India wants to use this and reduce its dependence on China.
The Indian government is cautiously analyzing all the ways to do this. The government of Maharashtra has recently cancelled 3 contracts with china companies due to the difference in the contract, and the 3 projects are about 5000 crore Indian rupees.
Prime Minister has also previously announced that India should become self-reliant to face future challenges. And announced Atma Nirbhar Bharat in which India will become self-sufficient making use of Make In India goods and Local and domestic manufactures.
Government of India also started to target cheap imports from China such as furniture and non-essentials as a primary step. The government has identified 12 sectors for which Indian can promote and increase domestic production which will reduce the dependence on China for those products. It has asked for the prices of products that are imported and the price of the same product made by a domestic manufacturer. This indicates that the government is trying to make use of local manufacturers to counter Chinese products and this is a very cautious step to protect ourselves while breaking neighbour.
The plan might be to increase the taxes on these Chinese products to make the domestic products competitive. This will increase the market of domestic products and by far reduce dependence on china in the long run. India uses Anti Dumping duty as a tool to help domestic products sustain in the market the cheap Chinese products. Not increasing this tax will make Chinese products costlier and domestic products cheaper and hence domestic products market will expand.
Government is stepping to help domestic industries which can help in meeting the demand on India and thereby reduce the dependence on Chinese products.
In part India never tried to reduce its imports. This is an unprecedented move by the Indian government and this will completely sweep the imports from one country. in past India never played a protectionist role. That is it never tried this large step to increase domestic production and reduce imports. India is always played the role or liberal nation. This made us depend so high on China and not its time we increase domestic production and reduce imports. This is India’s new way to break the neighbouring nation and developing Indian economy.
Previously Indian government banned only those products against which complaints are raised by domestic industrialists. But now India taking the step ahead.
The first step in this unprecedented move is that the centre has asked the State-owned telecom companies to avoid Chinese companies and prefer domestic equipment. this product is clearly an indication that the government don’t want Chinese equipment in state-owned companies.
Another move that has been taken by the government is that it has asked to display the origin of products in the government-run eCommerce platform GeM. This is an online e-commerce portal run by the government and this move will make the purchaser decide whether to buy Chinese products or Indian products. Clearly Indian products will have an upper hand while ordering when this move is implemented.
Now comes the interesting part. If the step that is taken in GeM is also implemented in Amazon and Flipkart the two largest eCommerce giants in India. This will make the platforms to display the origin of the product and hence the already angry people of India will stay away from the products whose origin in China. This move though not clearly might seem is an Unprecedented and a well-planned step by the Indian government.
We are already hearing the news that IPL, India’s most awaited Cricket Tournament is looking for other option for Chinese sponsor because of the pressure to avoid any Chinese involvement. If IPL finds a way to completely avoid Chinese investors, this will be a big move.
Delhi is already trying to review the trade pacts with different countries. Because it knows that china will try to find different ways to dump products in the Indian market and thereby capturing the market.
Now India is trying tactical measures to counter China. Restrict the trade, No government procurement and restricted sales on eCommerce platforms and this is just a tip oft he iceberg. More moves are to be expected when domestic manufacturing is increased.
We have to tell “This is New India”. The old way of using the weapons for war is over. Now India has and will use all the tools to face the future and counter any action by the neighbouring nation.