Indian based startup unicorns like Flipkart, Zomato, Swiggy and Paytm have recently been under the radar of Twitterati accused them of getting investments from Chinese investors. This anger has abruptly taken a rise after the deceitful act done by China at the Galwan Valley after 20 Indian soldiers were killed.
People have shown their anger on Twitter and have also suggested to start boycotting the services of these applications which are either china based or being funded by Chinese investors all over India. Many users have asked that these companies should get their stakes back as most of the stakes of these companies are in the hold of Chinese investors.
People on Twitter are asking people to boycott and it can be a harm to their current market situation. Although they have not come up with any formal response regarding this they posted a photo informing people that how they are trying to help sellers across India to work hard and how they will support them by providing their health insurance plans, by laying off the storage fees and trying to provide flexible work policies making them feel more comfortable and helping these sellers to ease their work.
China has created a large effect in the Indian market by investing frequently in the past 5 to 6 years. Many of the Indian homegrown startups have been backed up by Chinese investors. China has been a key investor in the technological development of the Indian market. With the recent situation where people are boycotting Chinese goods and the Government is banning Chinese Apps, things are turning worse.
“The overall sentiment is anti-China and that is building on various counts which have now been aggregated. A lot will depend on whether or not the government wants to play the hardball.The social media storm was inevitable. In the past also we have seen how some apps were downgraded citing ‘national interest’. There could also be some direct business impact for the time being. However, how it will reflect in the long term will totally depend on the way the government plans to handle the current situation.” – Anonymous Industry Executive
Snapdeal Statement
While companies like Flipkart, Ola, Zomato, Swiggy and Oyo have not given any formal statement or uttered any word regarding this but Snapdeal came forward to give a statement.
“Snapdeal has always been focused on creating opportunities and access for India’s small and medium businesses – sellers and manufacturers. For over a decade, we have championed the cause of Indian MSMEs and provided them with a platform to grow and succeed. As a proudly Indian company, we remain committed and steadfast in this mission.” – Snapdeal
China’s Investment and Future Prediction
A source named Gateway House has estimated around $4 billion of investments have been done by them in India’s technology-based Startups in 2019 while a $2 billion investment was done in the year 2018. Moreover, at least 18 of the top 30 startups in India are being backed by Chinese investors.
Ant Financial, Tencent, Shunwei Capital, and Alibaba are some of the big Chinese investors who have their stakes in Indian based unicorns. Well, a startup founder has also stated that after the month of April the Chinese investments have started to come down due to which the doors have been opened for other avenues which are based in UK, USA, Middle East and India.
“Fresh investments will take time because everyone is cautious as to what will happen next. There is going to be a bit of a lull because the sentiment is certainly low. Both Wuhan and border tensions have come at the same time. There is an element of negativity. However, it will not have a major impact on the existing companies operating in India that have Chinese investors on board. The very fact that Chinese companies have invested in Indian firms, doesn’t make them ‘Chinese products’. There are so many Indian companies that have set up manufacturing units in China. If we keep on boycotting things like this, we will end up hurting our own economy and the talent growth” – Sreedhar Prasad, Independent E-commerce Analyst
Conclusion
Although it will be a hard road for India on the economic front for a while as there is a ban on the investments by the world’s second-largest economy it will help in getting invested by other countries too which are more reliable and will help create a good relationship with them. Also, it will be helping all the Indian based startups and entrepreneurs and provide them with a great opportunity in the near future.
With the current tensions at the border, it looks impossible for a while to expect good relations with China and the spread of the deadly coronavirus will also play an important role in the Chinese market as many countries would give a second thought to having economic relations with them.
The USA is the world’s largest economy, and is showing some disinterest in China for the past two to three months too can look forward to India and can become a prime investor in these firms.
FAQs
How many Chinese apps are banned in India?
224 Chinese are banned in India since 2020
Is PUBG banned in India?
PUBG is banned in India under the instruction of the Government of India.
Why Chinese apps are banned in India?
Chinese apps are banned in India because of the security and thereat of Indian citizens and the ongoing conflict between the two countries.
India is a very calm country. It has shown resilience in every work that it has taken in hand. The government and all the diplomats keep on trying hard to maintain that image of a peaceful country. But when we say that India is peaceful and calm, we don’t mean that it just tolerates any nonsense that the world throws at it.
In a bugle of incidents, India was hit by China in a very crucial spot. There were fatal border clashes between these two biggest countries in the world. set of events started to take place in India. A trend that was probably never thought of before. The trend was to boycott Chinese products in India. Anything or any product that was a product of China was boycotted from the market in large numbers.
All this was done in a hope that it will affect the Chinese economy in a bad way. It was done as a reply to the Chinese backlash that happened across the border. The backlash was one of a kind and was never seen before. It happened on the land of the border of India and China.
When this happened and people of India began to think that they will reduce the consumption of Chinese products up to a level zero, they didn’t think about the after-effects of this action. They didn’t even think if boycotting at a national level is even possible or not? They didn’t even think about the fact that, if this action is even possible? If you have ever wandered in this direction of thought, then this is the article for you. Here, in the article, we will discuss how the Chinese goods were boycotted and were even possible for a country like India to boycott products of China.
This is the core issue that India faced and it is also the core of the thought of boycotting Chinese products in India. China was involved in some serious backlash on the border of India. Every citizen thought of taking revenge on China. The fastest way that they could think of, was the Gandhian way. The way of boycotting anything and everything that was manufactured in China.
Anything and any product from China faced a backlash. People all over the country decided to boycott products from China. This was a patriot blind act but this really shows the zeal with which the citizens of India operate.
This was the beginning of the Anti China trend which focussed on eradicating every Chinese product from the market. People in the western Indian city of Ahmedabad hurled Chinese TV sets down their balconies, while traders in the capital, Delhi, protested by burning Chinese goods.
On the other hand, when people were hugely boycotting Chinese products, the government of India said nothing. The government of India mentioned nothing officially to the anti china sentiments that flowed in the country.
Despite the Indian government saying nothing about the boycotting of goods from the land of China, there was something that went on in the background. In the backstages, Indian public sector undertakings and all the designated departments of the government were supposed to lessen the influence of Chinese counterparts and Chinese involvement in the processes. This is something that can be seen clearly when the accounts of the government were scrutinised.
The railways were one of the organisations which hold a lot of tender for every work that it does. It was also the organisation that was reported to have cancelled a lot of work that was outsourced to some of the Chinese companies in the record. This really raises eyebrows in the direction of boycotting Chinese involvement in every major decision in India.
It was also reported that the government also asked all the electronic commerce on the internet to show the country of origin, from which the products are sold. This can be a way to promote more transparency and fluency in electronic commerce but this can also be something relating to the anti china movement.
Later in time, India took even more intense steps to stop Chinese influence and involvement in India. The government banned more than half of apps that were flagged as inappropriate in privacy and safety issues. This included very famous apps like TikTok, UC browser and the CamScanner.
After the backlash that happened because of China, the bilateral relations were obviously bad and it was proof of bad handling of relations from the side of China. China became a culprit to the whole world and trades with India worsened at the time of the clash. It was also seen that the bilateral trade between countries was already down by as much as 15 percent. This figure was the lowest since 2018.
It was also speculated that the Indian government will also impose more and more tax on the import of items from China. Which will eventually demotivate people of India to buy from China and look for other alternatives. This was a big question, the question of selection of alternatives apart from the land of China.
China, as it is known to the world, is a cheap Labour country, which can manufacture things at a very low cost. This is a very big competitive advantage that China has over the world. It is populous and it provides products that are relatively cheap than most parts of the world.
Multiple companies who are MNCs use China as a step in their supply chains all over the world. So this is a crucial question to ask. What are the alternatives to China and if India can even afford the boycott? Is it even possible to reduce products from China and still keep the growth levels up in our country? Let us discuss some reports.
Is There a Substitute for China?
As the Anti-Chinese sentiment flourished on the land of India, it was very few people who were thinking, “If not China then who ?” China is probably the biggest exporter to India in terms of the magnitude of imports from the nation. There are a lot of industries that are dependent on China in terms of materials that they require to carry on their respective productions.
“At least 70% of India’s drug intermediary needs are fulfilled by China,” Sudarshan Jain, president of the Indian Pharmaceutical Alliance, told the BBC.
Not just for India, for China too, India is a great market. Both are hugely dependent on each other but China has a competitive advantage of being at a high level of manufacturing for the world. In other words, China is the second-largest trading channel for India after the United States. This makes it really important for China to not mess up relations with India.
Another fact is that all the imports from China account for about 12 percent of sectors such as automotive components and parts, Chemicals, pharmaceuticals and consumer electronics.
India’s booming smartphone sector is also one of the sectors which heavily depends on cheap Chinese phones made by Oppo, Xiaomi and others with the majority of share in the local market.
“We are not worried about finished goods. But most players across the globe import key components such as compressors from China,” says B Thiagrajan, managing director of Blue Star Limited, an Indian manufacturer of air conditioners, air purifiers and water coolers.
He also adds that it generally takes a lot of time to set up supply chains that are local and intrinsic to a nation. For a country like India where demand is huge for every product and service, setting up a local supply chain will be a work of wonder. Especially for the products for which it is hard to find a substitute. Handicraft is a category where India imported $431 million worth of goods from China in the 2020 financial year without any significant opposite in exports.
China is a big player in not just the market of China but also in the market of India. There can be multiple occasions when investors from China invest hugely in India. There are instances when Chinese money flew out to India into Indian startups which later turned into unicorns and are now a world-renowned brand.
There are many companies that invest in India, such as the technological giants of Alibaba and Tencent, which are behind a lot of money that flows into the Indian economy through startup tunnels. The examples include a lot of famous and household names like Zomato, Paytm, Big basket and cab aggregator Ola.
All these companies were once small companies and startups which grew to become multi-million dollar ventures with help from investors all over the world. One of the investors was from China and they mean serious business when it comes to money and wealth creation for both parties.
“There have been more than 90 Chinese investments in Indian startups, most of them made over the last five years. Eighteen out of 30 Indian unicorns [tech startups valued at over $1bn] have a Chinese investor,” says Amit Bhandari, an analyst at Gateway house.
At $6.2 billion, direct Chinese investment in India appears relatively small. But, Mr Bhandari says, restricting the likes of Alibaba from creating monopolies in the Indian market will be crucial given the “outsized impact” of these investments.
The foreign direct investments are a great mention here. India has already amended its FDI (foreign direct investment) rules to stave off hostile takeovers of Indian companies.
While China has accused India of contravening WTO principles, it’s unlikely to cut ice under current circumstances “as there is no way of enforcing any decision if an intercountry conflict is cited as a reason to justify the violations”, Zulfiquar Memon, managing partner at MZM Legal, said in an email interview.
This will provide India with some freedom to reduce the dependency that it has in terms of imports from China. This is the mantra of self-reliance, which is simply the fact that you can reduce imports when you are Atma Nirbhar, or self-reliant in yourself. India has a big trade deficit that touches the number that’s nearly $50 billion.
When everyone is talking about boycotting China and letting the bird go out of hand, it is the question of how the land will be satiated. This can be done by finding some alternatives to China which are really rare. Or this can be achieved when Bharat becomes self-reliant in its goods and produces. This is the time when the government is promoting the self-reliant scheme in India. It is promoting and motivating every initiative that will lead to making India self-reliant in some way or the other.
So to lessen the dependence of imports among the Anti China sentiments, India is thinking of reliance. That is the reason why The government is now emphasising “Atma Nirbhar” or “self-reliance” in India. It is a term that explains some entity that is full in itself and does not need others to sustain itself. The Atma Nirbhar Bharat Yojana tries to cover five crucial things in an economy: economy, infrastructure, system, vibrant demography and demand.
In a recent report, The daily Global Times warned that “China’s restraint is not weak”. It says it would “be extremely dangerous for India to allow anti-China groups to stir public opinion, thus escalating tensions”, and adds that the focus should instead be on “economic recovery”.
The domestic manufacturing sector of India can substitute as much as 25% of total imports from China, according to new findings from Acuité, a rating agency. This would lead to a reduced import bill of over $8bn in a single year.
This is a huge step towards a self-reliant India but this will introduce many retrains in the market. People would have to face some issues of supply and demand for that matter too. Mr Bhandari of Gateway House says boycotting popular Chinese apps such as TikTok might be more effective than boycotting physical goods in terms of value-added because there are multiple alternatives.
Conclusion
As we see that both China and India are huge storehouses of demand and supply. For India, China accounts for about 12 percent of imports in many major sectors of the country. China is the second-largest trade channel for India which is just after the United States. Thus, both the economies generate a lot of demand and supply which help both the countries in the manner they should.
The Anti-china sentiment that flew across India was a big blow to the relations and magnitude of imports and exports. This effect was deepened when the coronavirus hit the world.
As the covid 19 pandemic blew in the whole world, the demand for medicines and all the equipment that is needed by doctors increased a million times. This was the time when India’s imports from China rose in June and July 2020 by about 7.2%. At the same time, exports to China have contracted by 1.4% despite the demand slowdown due to COVID-19. The primary instruments needed in India were the PPE kits and all the emergency equipment required for treating the Covid 19 disasters.
Not just this, Chinese capital has been a very good source of foreign direct investments in India and this has broadened relationships in many ways. Both the countries benefit from this, in terms of wealth creation.
According to Invest India, there are more than 800 Chinese companies in India’s domestic market. All these factors include that India replied to China on borders a hard way. Citizens too joined the party by trying to boycott Chinese goods.
This is impossible to completely vanish Chinese produce from India but it is good to be self-reliant. The government has probably found a sweet silver line of hope in all this time of Anti China sentiment. The idea of sustainability will improve the nation-building process and is overall a sustainable method for growth.
FAQs
Can India completely boycott Chinese products?
As of now, it is not possible to completely boycott Chinese goods as India is on its way to becoming a self-reliant nation. Also, there will be huge job losses as China will push their companies to stop their production in India.
Why are Chinese products popular in India?
As the products of China are somewhat cheap compared to Indian products so people prefer Chinese products.
Is China a threat to the Indian market?
Yes, China provides goods that are really cheap compared to Indian products which are affecting the small and medium business industry in India.
The government of India brought in a lot of changes in the FDI norms. This was done keeping in mind the nation’s condition amidst the global pandemic. The main aim was to prevent foreign companies from opportunistic take overs of Indian firms.
The recent investments made their point on curbing Chinese investments in Indian Firms. As per the new FDI norm any country that shares a land border with India will no longer be able to use the automatic route in the FDI. The companies who would like to invest must seek government’s clearance over any investment proposal.
The changes were brought in late April earlier this year. The main aim was to stop Chinese Investors from their predatory behavior. These rules would be applied on countries such as Bhutan, Pakistan, Nepal, Myanmar, Afghanistan. But there is a very small flow of investments from these countries. So, this is evident that the norms are to keep an eye on China for any signs of exploitative behavior.
All this was not done on any sudden decision. The reason behind all this is form the year 2015. Since 2015 China has increased its investment in India. This looks like a very strategic move. According to a report by the DPIIT, Department for Promotion of Industry and Internal Trade. The total amount of FDI that has flown from China to India is around $1.8 Billion. All this within a 2015-2019. In the year 2015 itself there was an investment of total $494.75 million.
The industry that has particularly caught the eye of the Chinese investor is the Indian Automobile Industry. Between the same period that is from 2015-2019. The automobile Industry has seen a total investment of $876.30 million. The electrical equipment manufacturing along with the book printing sectors have also seen a hug inflow. All this FDI flow confirms the foothold of Chinese investors in the nation.
Yearly FDI Inflows (in USD Million)
The companies that would be affected the most would be the companies like BigBasket, Paytm and Ola. These companies are just collateral damages of the governments new rules to protect minor companies. The online Grocery vendor Gofers along with the digital payment app and OLA have received millions of dollars as investment from Chinese Investors.
The new norms would effect the fresh funds that were supposed to role in.
“The new FDI guidelines essentially imply Chinese capital would require prior government approval. In effect, given the uncertainty around approval, startups will shy away from Chinese capital. In the immediate future, this could impact PhonePe and potentially Paytm at a later date,” said Ashneer Grover, CEO and co-founder, BharatPe
According to a report by the Think Tank Gateway House a total of $4 Billion has been invested in Indian startups by the Chinese tech investors. Another report said that 18 of India’s 30 Unicorn Startups are funded by Chinese Investors.
BigBasket the online grocery store got a $50 million funding from Alibaba. This investment rolled in when the company was facing its own share of problems in the lockdown. But these new FDI norms would hit the company. BigBasket would face troubles for its capital infusions with Alibaba. BigBasket would now have to search other places to reach its requirements on the basis of investments.
Paytm raised a huge sum of $1 Billion from the Soft Bank in Japan and from Ant Financial from Alibaba. Paytm faces tough competition from Google and PhonePe(owned by Walmart). To fight these competitors Paytm has to be always on the edge of innovation . But the company would face a major fallback after the new norms. Alibaba is the largest share holder in the company. This would indeed affect the digital payments platform.
Alibaba’s Ant Financial has been an investor in Zomato since the year 2018. Ant Financial invested $210 million in the food delivery app. It go a stake of 14.7%. By this Ant Financial became the company’s Largest investor. This stake was raised to 23%. According to news reports this was going to be increased earlier this year. But between that the Indian government revised its FDI norms.
18 of the 30 Unicorn Startups who are funded by Chinese Investors would face a lot of troubles. The move of making changes in the FDI norms is to hurt the Chinese Investors. But this would hurt the unicorn startups. This move has put many jobs on risk.
The make in India campaign focuses on sectors like oil and gas, railways, electronic systems,ports and shipping, renewable energy, roads and highways. Space, textile and garments, thermal power, tourism and hospitality and wellness.
Mr. Narendra Modi, Prime Minister of India, said
“I want to tell the people of the whole world: Come, make in India. Come and manufacture in India. Go and sell in any country of the world, but manufacture here. We have skill, talent, discipline and the desire to do something. We want to give the world an opportunity that come make in India,”
PROS of Make in India Campaign
Campaign for the masses
The Prime Minister emphasized on the development of labour intensive manufacturing sector. This campaign is to generate a lot of employment opportunities in Manufacturing.This would help National Manufacturing Policy in achieving objectives through this campaign. The aim is to increase the GDP from current 15-16% to 25% till 2022. (Manufacturing sector)
The purchasing power of people will get increased through employment. This will help to eradicate poverty. This would also help in the expansion of consumer base for companies.
Growth of Factories over the Years
Model of the Make In India campaign
The model of the campaign is look east and link west policy . This will strengthen the industrial linkages with other countries. This would also help to build bilateral ties with many countries.The growth model is Export-Oriented. This will improve India’s Balance of Payments. This would also help in piling up foreign exchange reserves.
An auto response mechanism will be formulated by the government. The Government also has decided to resolve issues about procedural clearings. This will be done at different levels in a given time frame. This is a positive step towards an industrial friendly environment.
Foreign investment will not only bring foreign capital. It will also bring technical expertise and creative skills .
Fortifying the Rupee
The emergence of the manufacturing industries would help in converting India. The nation would then will be a hub. A place for the fabrication of various commercial products. This would lead to be a grand collection of the FDI. All this in return would help to strengthen the rupee. This would help against the domination of the American dollar.
Up-gradation of technology
India is an underdeveloped country. This means that we lack various latest, new age mechanization. Lack of new technology is a big hurdle in the path to development of the nation. But due to the campaign a lot of investors would be attracted to India. This would give India an opportunity to upgrade to the latest version of technology.
Availability of Youth
The young generation is often referred to as a unending fuel. Youth comprises of a major Indian population . This youth often moves outside the nation to study and make a future. India due to the lack of young labor misses out on all the innovative and creative points. Make in India can make this possible by keeping the youth in the nation. This would also give them ample opportunities.
When it comes to a theoretical perspective. It can be seen that the campaign tends to violate the theory of comparative advantage. India should import the products that cost more at production in state .
Is the world ready for a second China? This goes as per the point made by Dr. Raghuram Rajan. Government of India wishes to convert India into a second China. India but has no time advantage like China.
India to stop imports?
Make in India will lead India to focus only on export. This will lead India to make some changes in it’s export promotion measures. This can have a devastating effect on the import bill.India suffers from a countless number of companies that are called infrastructural bottleneck. To overcome this India has to invest a huge amount over a span of some years. Generating such a big amount is a a hard task.
Agricultural negligence
Agricultural sector will take the greatest blow due to this campaign. India has 61% cultivable land. This will happen due to the introduction of industrial sector. This introduction would lead to the negligence of Agriculture.
The Make in India campaign focuses on Manufacturing Industries. To set up these a lot of industries have to be build up. The manufacture of these requires a lot of natural resources be it fuel, water land. So a lot of new build ups would cause in depletion of these.
Loss of Small businesses
The Make in India welcomes foreign companies. To invest and manufacture in India. This act eases up the rules for foreign trade and investment. This act may seem very healthy when it comes to foreign relations. But this would cause domination over small businesses . This would force them out of business.
Recognition of Indian Products
The make in India campaign would help increase the brand value of Indian products. But this wont help the brand when it would come to the upper middle class. The upper middle class are the people who can actually afford all this. So making a mark in front of them would be a great task.
Make In India
Pollution
India is currently unable to do anything with the problems like Pollution. According to stats Pollution Index of India is 76.50. The Make in India is supposed to increase this further. The level of Pollution in India would rise to levels never seen. This would make the condition in India worse. So, Make in India can help India economically. But would have adverse effects ecologically.
Due to the ongoing military standoff at the Indo-China border, Chinese funded startups may face challenges in raising capital for their businesses. Chinese investors have found Indian startups valuable and deeply invested in top startups like Paytm, Zomato, BigBasket, and many more but soon these startups may face challenges in capital investments for their businesses due to the ongoing military standoff between two countries.
The military standoff may affect the Chinese invested startups in India and Chinese funded businesses, as per the reports Chinese investors have funded over 18 out of 30 unicorns in India which is roughly around $3.9 billion of investments in 2019.
Chinese investments in India
Businesses that already have Chinese investors deeply invested cannot afford to back out at this moment and will not, but early growth stage startups in India which are looking out and rely on foreign investments may find it difficult to find foreign capital investments for their startups.A startup founder said “While investments from china have slowed down, other avenues have open up from countries like the United States, UK, and the middle east”.
Foreign investors find investing in India attractive because India has an attractive risk-return trade off and India remains the second-fastest growing economy in the world.
The Department for Promotion of Industry and Internal Trade (DPIIT) through a Press Note No.3 of 2020, has announced that any of India’s neighboring countries will require the Indian Government approval in case of any FDI investments in India. Many have speculated that this move is aimed to restrain Chinese investments in India.
The companies that are going to be affected the most by the foreign direct investment (FDI) norms are Big basket, Ola and payments platform Paytm, these startups have so far received billions of dollars investments from Chinese companies.The FDI makes it compulsory for all the investors including Chinese direct and indirect investors to seek government approval before investing in Indian companies. This will create a hurdle for the Chinese investors such as Alibaba and Tencent who have invested billions in Indian startups.
“The new FDI guidelines essentially imply Chinese capital would require prior government approval. In effect, given the uncertainty around approval, startups will shy away from Chinese capital. In the immediate future, this could impact PhonePe and potentially Paytm at a later date,” said Ashneer Grover, CEO and co-founder, BharatPe.
lately Bigbasket was backed with a funding close to $50 million from Alibaba. The amount was funded to the company when it was struggling to meet the operations requirements due to restrictions imposed by the lockdown.
Top Chinese funded startups in India
According to the data gathered by Tracxn, C Chinese investors have backed unicorns like Byjus, Paytm, Ola, Oyo, Swiggy, Zomato, Dream11, and Udaan, while some investors have also invested in soonicorns (a term used for potential unicorns) such as Practo, ShareChat, Meesho, and CarDekho.
Top Chinese funded startups
The new FDI guidelines is going to affect the current investments as well as the investments by neighboring countries who are interested in investing in Indian startups.
Telecom Ministry of India has taken a major step against the boycotting of Chinese goods movement. They have given orders to the MTNL, BSNL and other big private companies to ban all the Chinese based deals and all the equipment they have been using. This has been a major economic decision that has been taken by the government after the India China standoff which led to killing of 20 Indian soldiers being an act of deceit by China.
Telecom Ministry orders MTNL BSNL to Ban Chinese Equipments
The Telecom Industry has told the service providers to make changes in their condition accordingly. They have also told them to cut off all the previous tenders and to rework on that too.
This critical decision which has been taken by the Indian government can also play a very major role in the 4G upgradation which has been done and the industry which was looking forward for the introduction of 5G networks can be also affected too. While Huawei was asked to perform a 5G rollout in India, but due to these changes this thing looks unlikely to happen.
Indian telecom market has been dependent on China based providers since the beginning. This has been a very crucial step and a very important one too. This can cause harm to the Chinese market a bit more. While, this being a first economical step between two countries, the relation is worsening.
The government has also said that any new brand deals will also be banned and all the equipment will be stopped in our country.
India and China relations worsening day by day
This step is clearly taken by the government as an answer to the killing of 20 Indian soldiers who were martyred at the LAC in Galwan Valley in Ladakh. The Indio-China relations have been in very bad terms for quite a while and has worsen after this incident.
This is the first time government has taken any major step regarding the India China conflict and providing them with a major setback. At a hard time like this, the step taken came immediately after a month long protest of banning of the Chinese based application in our country.
CAIT Generated a List of 500 Items Should be Banned Immediately
Also, the CAIT(Confederation of All India Traders) has also asked the people to boycott all the China based goods in our country. They have listed around items 500 which includes bags, textiles, furniture, watches, footware apparel and kitchen item too. The CAIT said in a statement, “By calling for the boycott of these Chinese products, the objective is to reduce import of Chinese finished goods by $13 billion or about Rs 1 lakh crore, by December 2021”.
They have also asked the Indian celebrities who endorse the Chinese products should also come forward and support this cause as the soldiers of our country are dying fighting against a cruel country like China.
A Very Tense Situation At the Ladakh Border
The situation at the Ladakh border is very much tensed after the Chinese soldiers crossed the borders even after the talk of not harming each other. They took a coward step against the us as it was “pre-meditated and planned action” by China.
People Also Breaking The China made Television
People in India have also shown their anger by throwing away the television sets which were made in China and breaking them. Effigies are also being burned of the Chinese leader Xi Jinping in many of the Indian cities.
These steps are very important to show the Chinese government our solidarity against the use of any of their products and what harm can be done to them without even picking up any weapons. It is high time now and taking these important decisions should be necessary. China has created a very big impact in the Indian market and it will be very difficult to abolish all their products but at the same time it has become very important for us to take these kind of steps.
Can Pave The Way For Atmanirbhar India
Well, some positives can also be taken from this step taken by government as people will start working inside India more and the dependency will lower for sure. It will be a tough road but the results can be fruitful. Atmanirbhar campaign will get more of the support through this and now Indian based services can boom up helping India to become a strong economy.
The telecom industry will shortly require some different alternative and then these industries will start to look up to the Indian based startups and the millennial of our country. Indians are working on them and this could be a big help in terms of economic front.
In this time of pandemic, China is pushing borders against India and other neighboring countries.China has a powerful and bigger weapon and that is Economy and that is why China is getting political. China is using its economy to dominate our neighbouring countries and thus it is becoming a superpower.
It is the worst time for India to go on a war as our economy is down and this war couldn’t be won by money as China has its allies around us. It is helping our neighbouring countries in infrastructure and other projects but if no one uses them, it becomes difficult for these countries to pay back China. China also overstates his own bills and there comes China again and asks to handle the operations and takes control over these infrastructures so that it can use these bases as military base in times of war and be prepared. In case, the war is held, it will be from all the sides as we are surrounded by China’s allies. China has a military base in Africa and it is using it to threaten U.S. However, India is taking serious precautions to make China realise that it will impact their economy as well.
Although this is not for the first time as the supporting stand of China towards Pakistan pot URI attack also led to a campaign to boycott Chinese products in India. However, this time, many social media influencers are coming up with several reasons to boycott Chinese products to spread awareness among Indian citizens. I would like to share some YouTube links which are helpful to understand the agenda of China for using Economy as a weapon against India:- SonamWangchuk
Baba Ramdev
These videos will also help in understanding the reasons to boycott Chinese products. There are many alternatives available for the Chinese apps and if we start using these alternative apps instead of the Chinese apps, it will affect the economy of China. As India is the biggest importer of Chinese goods and trade deficit of India with China is one of the biggest between two trading partners. A boycott is only possible if we start using alternatives from other countries or we become self-reliance as our honorable Prime minister wanted to say and import substitution can be done. If we will be able to boycott Chinese products completely then China will be in a situation where he will need to think twice before waging a war against any neighbouring countries. Our country now needs to manufacture products which are ‘Made in India’ but are ‘Made for the world’.
Here are some examples, how Indians are totally depend on Chinese apps and using them continuously and on daily basis and these apps are the reason behind the growth of Chinese Economy:
According to facts provided by some news and personals, China is using the data from the Chinese invested apps and Chinese apps to gain information and also some information have been hacked by China through these apps as well.Recently a person from Vadodara Twitter account was hacked and the access point were seen as China. He stated that his account was synced with Pubg mobile and that might be the reason of hacking. China is a stakeholder in the company Tencent which has developed Pubg. Now this becomes more important to boycott these Chinese apps, to protect your data and information and also in order to support India so that China’s biggest weapon can be used against them.
India is also trying their best to deal with China and make them taste their own medicine. They have reviewed the FDI so that Indian can’t Chinese puppet like our neighbouring countries. We are late but we are not in China’s trap and we have learnt the truth about China’s economy.
Vocal For Local campaign
Prime Minister Modi in his address to the nation on May 12, 2020 launched a ‘VOCAL FOR LOCAL‘ campaign. He urged the citizens of India to buy and promote local goods and brands. The Prime Minister further said that global brands were once local but when people started supporting them they went global.
It is known that India and China are the two fastest growing economies in the world and India is the largest importer of Chinese goods and services in the world.
The trade deficit between India and China is the largest among the major trading partners. It is interesting to note that India imports about seven times more from China than it exports. India imports more than $ 50 billion worth of goods from China and exports $ 2.5 billion worth of goods to China.
It is a known fact that Chinese products are very cheap compared to their Indian counterparts. In addition, the Chinese government also provides subsidies to its exporters. India spends around 9% on transportation, energy etc., but this cost is nil by the import duty imposed on China by India. To avoid import duties, many Chinese companies use trans-shipment routes — sending goods to Bhutan and then India.
Globalization has spread its roots so deep in our lives and the supply chain is so interconnected, the productions process is so complex that it is difficult to isolate one country and boycott it’s goods completely but as Mr. Sonam Wangchuk mentioned, systematic and phased boycott is possible. We can starts from stop using the Chinese software in a week and hardware in a year. We need to constantly make efforts to ease the business environment in India and bring out labour reforms and look for less expensive alternatives which will take time but it is the time to make some uncommon decisions that will impact our lives and will help Indian Economy and will impact Chinese Economy as well.
The Confederation of All-India Traders (CAIT)
CAIT
A traders’ organization, on Sunday expressed solidarity with the Ladakh-based educational reformer and visionary Sonam Wangchuk’s appeal to boycott Chinese goods. Tension between India and China, the man who inspired Bollywood blockbuster “3 Idiots”, has appealed and asked Indians to boycott all Chinese companies. In a tweet, the engineer-turned-education reformer asked people to boycott all Chinese products in Ladakh to stop Beijing’s “bullying” and to free 1.4 billion bonded labourers in the country.
CAIT, which claims to represent seven crore merchants, said it had identified around 3,000 categories of heavily imported Chinese products “which should be immediately replaced by Indian products as good quality for such products Indian replacements are available “
CAN INDIA REALLY BOYCOTT CHINESE PRODUCTS
India imports many raw materials as well as finished products like steel, minerals etc. from China. When it comes to boycott imports from China, this can only be done in the case of finished goods but the import of raw materials from China cannot be stopped.
India also imports consumer durable like electrical appliances, mobile phones, cars etc. Medicinal drugs like leprosy, antibiotics etc. from China. In addition, the Chinese smartphone market accounts for $ 8 billion of India’s smartphone market (Lenovo, Oppo, Vivo, etc.). If India planned to boycott Chinese products, India’s GDP would fall drastically.
After the launch of ‘Make in India‘ campaign by Prime Minister Modi, many Chinese companies have set up their units in India, employing hundreds of thousands of workers in India. If India boycott Chinese products, these companies may face pressure from Chinese authorities to stop their production in India, leaving hundreds of workers unemployed.
As mentioned above, India imports about seven times more from China than its exports. If India plans to boycott Chinese products than find an alternative that can match the cost and availability is almost impossible. Thus, India’s GDP can be contracted.
5- It is interesting to note that almost every product we use has a little bit of China. Smartphones, laptops, air conditioners, etc. which we use in our daily life, some parts are manufactured in China.
We must understand that the present process of manufacturing is interlinked. For example, a phone is made with the help of Chinese laborers and land, investment from a different country says that the US has made an innovation from Japan and can end the Made in India apps. Every product has the same process when it comes to labor, investment, innovation, etc. Thus, it can be concluded that each nation cannot be separated nor its good can be boycotted.
Many countries in the world started boycotting products from various countries, but were unsuccessful due to the complex manufacturing process. Some of them are listed below:
1- In 1930, China tried to boycott all Japanese products to protest against the Japanese colony, but failed.
2- In 2003, the US attempted to boycott French goods after 9/11 in protest of France’s refusal to send troops to Iraq but then failed.
SO IS THERE ANY ALTERNATIVE?
Sonam Wangchuk
Recently, Sonam Wangchuk answered several questions on the boycott of Chinese products. He said that the customer is king. This means that consumers should stop using Chinese products. He chanted a boycott of China’s software in a week, hardware in a year, finished and non-essential products in a year, and systemic boycott of essential products, raw materials, etc. in the coming years.
We can also implement the import-substitution method in India to boycott Chinese products. This means that the products we import from China can be manufactured in India, but in the short term this is impossible.
The Indian government should reduce the rates at which loans are issued to Indian companies like China. In addition, the government should provide infrastructure, services, etc. to prepare Indian companies to compete with China. India may boycott Made in China products but in a systematic and planned manner as stated by Sonam Wangchuk.
