Ban China Products in India - Everything You Want to Know
Shouts to Ban the Chinese Products are growing across the globe. Especially in India, after the recent killing of Indian soldiers in Galawan valley by the Chinese. Sentiments To Boycott Made in China, products, Apps, and services are gaining steam.
On 29th June 2020, the Government of India has banned 59 Chinese Apps citing concern for the safety and the sovereignty of Indian cyberspace. However, the media is labeling it as a Digital Surgical Strike by the Indian Government.
It is a bold move and will not go down well with the Chinese dictators whose official spokesperson( Zhao Lijian) has already cited concerns over it.
But can we afford to do ban Chinese Companies and Products? Let's explore if we can, and will it be prudent to do so?
But first, let's understand why Indians want the GovernmentGovernment to ban Chinese products and why there is so much anguish expressed on social media?
Why People Want Governments To Ban Chinese Products?
Firstly, People are angry about the cover-up of CoronaVirus by the Chinese GovernmentGovernment. For not being transparent about the information, Human rights violations, and muting the whistleblowers.
China stopped the spread of the Virus in their own country by sealing the epicenter (Wuhan). But they never stopped International flights from Wuhan to prevent the global spread even knowing that the Virus can spread from person to person and is an airborne disease.
Global Chinese companies now face the brunt of anger for the deeds of CCP (Chinese Communist Party).
#BanChineseGoods - People are supporting this movement, and many are also opposing the ban on Chinese products and Apps.
But the movement is not thought or planned. It is a knee-jerk reaction to the CoronaVirus pandemic and the aggression on the border.
There are a considerable number of Chinese hardware and software companies that have come under fire from the supporters of the movement.
Undeniably, Chinese people are hardworking, tenacious, and adaptable; and they have created some world-class companies, products, Apps, and services. The problem has been the CCP for which there is a lot of criticism, even inside China.
There are several reasons why people want to ban Chinese products - one of the biggest is to help boost local manufacturing and enable native companies to make money and provide employment.
However, the Indian government have failed to protect the local manufacturing companies. They were sleeping when China was making in-roads and destroying our Industries.
Why Indians Want the Government To Ban Chinese Products?
For India, there are several reasons to hate China - they have killed the local manufacturing. Everything Indians are currently buying comes from China. It's making the nation dependent, and in turn, empowering CCP.
Another primary reason is China helps Pakistan at every global forum and takes a stand against India. It supplies arms, ammunition, technology, machinery and offers financial aid to keep the pressure on India. Consequently, it is fueling the war in Kashmir and the death of Indian soldiers and citizens.
Moreover, there have been several stand-offs between India and China at the border.
Further, China supported Pakistan on the abrogation of Article 370 in Jammu and Kashmir at the UNSC. To oppose the move, the trader's body of India, CAIT, called for the Boycott of Chinese products and revision of import duty to 500%.
Additionally, China has been stonewalling India at the UN to become a permanent member for years. Also previously, China has opposed India's appeal in the UN to ban Jaish-e-Mohammed chief Masood Azhar. Several other reasons make a lot of Indian nationals dislike China.
More importantly, the recent killing of 20 Indian soldiers in Ladakh has angered a lot of Indians who don't want to support China anymore.
China's stupidity in the Galavan valley has done irreparable damage that will resonate for years. It doesn't matter for a lot of patriots what China has to offer. Nothing is above the lives of our soldiers.
On one side, China wants to have access to the world's biggest consumer market (India) for trade. On the other hand, it wants to threaten our sovereignty and isolate us by conniving with Pakistan and Nepal.
Dear China, you want to do business you need to be polite.
What are Industrialists Saying About Importing and Exporting from China?
Sajjan Jindal, chairman and managing director of JSW Steel, one of India's largest steelmakers, had this to say to The Economic Times:
The steel industry’s 100% refractories come from China. One approach is to say that war will be fought by our soldiers, and my job is to make steel at a cheaper price by buying from China. But another view is — look at the $100 billion opportunities that Indian companies should tap. There will be some pain in the short run. But see, I respect my country and my army. If they (China) have killed 20 of my soldiers, I’m not going to buy products from them and strengthen their armies more.
Jindal said the company is with the additional cost of importing from other countries like Brazil and Turkey. However, Jindal Steel also exports to China and is not reducing the exports as they think that is China's prerogative if they want to stop imports from India.
India's export of Steel to China was 48% of the total exports, during the lockdown.
So, we are not averse to exporting to China, but the partial restriction of Imports is sought mostly to balance the Trade deficit and reduce the heavy reliance on China for imports.
India exports 13.5 million kg of tea to China and has overtaken Sri-lanka that was previously the leader in tea imports to China.
Border tensions between the two countries have not affected exports of tea to China,” said Mohit Agarwal, director, Asian Tea, and a leading exporter to China and Iran. “The Chinese are buying both CTC and orthodox black teas.”
Hero Cycles turns out to be a real hero! Cancels 900 Crore Chinese Deal
Indian Cycle-manufacturing giant Hero Cycles has put forth its step and a message to the masses at Large-Ban Chinese products. In a recent advancement on the ban on Chinese product's movement, Hero cycles have canceled a 900-crore deal it was supposed to enter into with China.
They have already started vying for alternative markets internationally and Germany seems to be on a feasible priority currently. Promoting the “vocal for local” initiative, they have put forth enterprising options for the Indian markets similar to the cycle valley in Ludhiana.
These options shall include everything from manufacturing to sales as proposed by Mr. Pankaj Munjal, the Chairman & MD for Hero cycles.
Such initiatives by manufacturing stalwarts will definitely accelerate the revolution to make India self-reliant under the ‘Aatmanirbhar Bharat’ mission. Not only will these mean more employment opportunities in the country, but also less import revenue loss while also encouraging MSME to develop as ancillary and support industries to these manufacturing units.
Government Mandates E-Retailers To Mention Country of Origin
The Indian Government is in no mood to forget about the killing of 20 Indian soldiers in the Galwan Valley.
Based on the latest report By ET, E-Commerce websites like Flipkart and Amazon are asked by the Indian authorities to display “Country of Origin” on the new products listed on their platform by all sellers, starting from 1st August 2020.
On the items that are already listed on the websites, the authorities have given an indicative date of 1st October 2020.
However, E-commerce companies have asked for more time to implement these guidelines. The new move to label products is intended to curb imports from China and make Indian buyers aware of the country of origin of products before buying.
The government is banking on the patriotic sentiment of the Indians who may choose to avoid products made in China once they are aware of the country of origin.
This may have some impact on the sales of Chinese goods, however, mobile companies like Xiaomi, Oppo, Realme will display a made in India label that may actually help the sales.
Also, gadgets that are assembled in India using a majority of Chinese parts will get a made in India label which defeats the purpose in this use case.
We will have to wait and see how the government tackle the partial made in China products problem.
Lava Votes for Design in India!
Perhaps PM Modi is foresighted and that is why he started the ‘Make in India’ movement years back. But back then, the movement didn’t gather much momentum as it is gaining today. Well, some lessons are learned the hard way. However, it's better late than never.
Lava International has recently launched its Design in India contest for aspiring students & professionals to design the next Indian smartphone. Bhai… mauka hai aur dastoor bhi!!!
Students & professionals with an educational background like B.Tech/M.Tech or B.Des/M.Des are encouraged for participating in the contest.
The registration links are live till the 9th of July. Not only will the winners get an opportunity to work with Lava International but also cash prizes worth INR 50k, 25k & 15k respectively based on the stand in the competition.
The participants will undergo mentoring from the design team at Lava International and will be judged on 3 major aspects- Ideation, prototype modeling & presentation of the handset. The panel of judges will be led by the Chief manufacturing officer of Lava, Sanjeev Agarwal himself.
The Indian cell phone market is pretty design-led and creating a pool of talented designers becomes inevitable for any company vying to conquer the market in a flash. Remember the Nokia days, where the designs determined the success of the product?
Lava not only is targeting Indian markets but also plans on having a global presence with India as the manufacturing hub.
As easy as it may seem to hear, it’s not going to be a cakewalk to bring it into execution. The manufacturing of smartphones in India is a challenge all the more now due to the lack of certain technology like the production of semiconductor wafer fabrication units.
Despite these hindrances, Lava is all geared up to launch 2 new smartphones in the market that were ideally planned for early 2020 but got delayed due to the ongoing Covid-19 scenario. One of these launches is going to be a budget smartphone priced within INR 10k.
Public Survey On Boycott Chinese Products
Patriotic sentiments in Indians are deep-rooted and show up on usually 3 and at times 4 occasions- The Republic day, the Independence day, cricket matches and terror attacks or war-like situations. I don’t want to sound like a loathsome critic of public sentiments, but doesn’t it sound true to you?
Why did ‘Make in India’ not gain as much momentum as ‘Aatmanirbhar Bharat’? Isn’t the underlying concept the same?
Does the death of soldiers and malevolent intentions of the neighboring nations need to trigger our potential for being self-reliant? After the recent violence at the LAC in Galwan valley in Ladakh, a survey conducted by LocalCircles revealed that of all the people who took the survey, 87% were ready to boycott Chinese products for the next year.
Of the 87%, 58% agreed to a complete ban of Chinese products and software apps like TikTok or Camscanner, 39% agreed that they won’t buy henceforth but will use what they have already bought.
On the question of whether a 200% import duty should be imposed on imports from China, 42% agreed to the hike in import duty, while 36% said that the hike should not be imposed on the import of raw materials.
A mean 20% of people also responded negatively to the question and said import duty should not be hiked. A whopping majority of 90% of people taking the survey said that Chinese products should mandatorily undergo certification tests for Indian standards like BIS, FSSAI, CDSCO & CRS.
Unless the products pass these quality tests, their import & sale in the Indian market.
Why People Buy Made in China Products?
Chinese products are cheap and offer a lot of value for the money. Indians are bargain hunters, and the Chinese products are a perfect fit for most low-income buyers. Nearly 70% of the phones sold in India are from Chinese brands like Xiaomi, Oppo, Vivo, Realme, Oneplus, Poco, etc.
To make matters worse, Chinese companies are also accused of gathering user information and spying on people.
Can We Trust Chinese Tech Products? Are they Safe?
There was a recent article that was published in Forbes. The report accuses Xiaomi of spying on its users. It is titled "Exclusive: Warning Over Chinese Mobile Giant Xiaomi Recording Millions Of People's 'Private' Web And Phone Use."
The article raises several concerns about the user privacy of Xiaomi smartphones and how the company is sending data back to China.
It goes on to say that Xiaomi tracks which websites the user is visiting, search queries (things you type in Google search), items viewed on Xiaomi’s news feed. All of this is tracked even when you are in “incognito” (private) mode.
Further, this data is not anonymous, and the company can attribute it to a user. Typically, the tracking by major tech giants like Google and Apple ensures that the data is anonymous and used to better the user experience.
Nevertheless, Xiaomi India CEO, Mr. Manu Kumar Jain, has ridiculed the report by calling it fake news.
The problem is Andrew Tierney, the security consultant who analyzed for Forbes, has got it on video showing how Xiaomi tracks data. It is hard evidence and difficult to refute.
Anti-China Sentiment on the Rise: Manu Kumar Jain
Later on, Xiaomi has issued a software update that gives a toggle option to stop this data transfer.
Manu Kumar Jain, recently said that there is an anti-China sentiment on Social media but Xiaomi India will not be impacted by it and they are more Indian than many Indian brands.Manu Kumar Jain
Huawei Ban By the US
The US has previously banned Chinese company Huawei for spying and sending data back to China.
Moreover, US President Donald Trump has recently said that he has come across information that the Virus originated in China and has been attacking WHO and China incessantly.
I don't think so, the US would like to have an all-out trade war with China but will keep the guerilla war on.
They have restricted Huawei to use Google Os and Apps. Can they do it to Xiaomi and other Chinese manufacturers in future is yet to be seen?
Ban on TikTok (59 Chinese Apps banned By Indian Government)
On 29th June, the Indian GovernmentGovernment has banned 59 popular Chinese Apps, including TitTok, in India, and you will not be able to access them on both Android and iPhone. There are several Indian Apps like Mitron, Chingari, and Fireworks that can replace TikTok in the country in the coming days.
Also, the Top Apps banned include Helo, Likee, Vigo, Shareit, Xender, Cm browser, UC browser, Du Recorder, CamScanner, Vigo Video, Mi Video Call, and Mi Community by Xiaomi, Clash of Kings, and e-commerce platforms from China such as Club Factory, and Shein.
Here is the complete list of 59 Chinese Apps that are banned by the Indian Government:
In addition to the above, the US may ban the popular video App TikTok on government work phones citing security concerns.
Sen. Josh Hawley said, “As many of our federal agencies have already recognized, TikTok is a major security risk to the United States, and it has no place on government devices. Also, Apple recently shared that TikTok was snooping on users data. ”
Bytedance, the developer for TikTok, has been successfully able to capture a vast market in India in the last two years. There are over 1.5 Billion global users for the App, and nearly 44% of the users are from India.
Also, Chinese Apps are not spotless; there have been privacy concerns raised previously. Popular document scanning App CamScanner was banned on play store due to security concerns. Also, Apple has found that TikTok was gathering user information, which they are not supposed to.
Apps ban is easy, but what about the products?
Can We Ban Chinese Products in India?
China is the big factory of the world that makes goods for everyone. We may like it or not, but they take care of global production.
China has a colossal GDP of close to 15 Trillion dollars Vs. less than 3 Trillion dollars for India. The incredible amount of resources and technological advancements give them the edge and power to dominate the world.
Banning Chinese products is not prudent, viable, and currently possible without severe consequences. There are international laws and regulations from the World Trade Organization to prevent countries from taking such steps.
However, India can cite national security concerns for certain products and can ban them, similar to what the US has done with Huawei. India is also scrutinizing the stock investments by the Chinese to prevent them from taking control of the Indian companies.
For India, China is the fourth largest export destination and the most significant import destination. Undoubtedly, China is the biggest trade partner of India, and the Indian Government can't ban Chinese Products easily.
Chinese exports to India are close to $70 billion, and China imports about $17 billion of goods from India.
The major commodities imported by India are:
- Electronic Equipment (Gadgets, Phones, Electrical Machinery, etc.)
- Industrial Machines, engines, pumps
- Chemicals, Pharmaceuticals, and Fertilizers
- Iron, steel, Plastics
- Gems, precious metals
- Ships, boats
- Medical, technical equipment
Indian consumers want affordable products, and the Chinese can make them due to economies of scale. For instance, the toy market in India has more than 80% share of the Chinese companies, whereas Indian companies only make 20% of the toys sold.
A study by ASSOCHAM suggests that 40% of the toy manufacturing companies are closed in India due to predatory pricing by the Chinese, and 20% more are on the verge of shutting down.
Death of Local Manufacturing
There were 100s of Bicycle manufacturing units in Punjab, but more than 200 units are shut down due to the import of cheaper parts via China. China is even using other countries like Bangladesh and Sri-lanka to set proxy manufacturing units and using these SAFTA countries, dodging the customs charges to import the parts in India.
Another example is the Sports goods manufacturing in Punjab and especially near Jalandhar, where football, volleyball, cricket gear, and several other sports goods were once manufactured. But now the industry has shrunk.
Notably, more than 50% of the manufacturing units are either shut down or are running at less capacity due to the cheaper imports from China. India even supplied soccer balls during the 1990 Fifa World Cup, but now there is nothing to speak home about.
Moreover, these are some of the examples, How made in China has killed the Made in India dream in the last two decades. Thousands of small units have vanished, and the workers have become jobless due to the influx of cheaper Chinese products.
Ban on Chinese Products
The GovernmentGovernment can't do a blanket ban on Chinese products.
However, boycotting products is in the hands of people. If people have good alternate choices from local manufacturers, at competitive rates, only then there is going to be an impact.
Also, even if a hypothetical ban is put on all Chinese products, currently, it will be detrimental to the Indian economy. The cost of goods will rise and, resultantly, it will increase inflation. It can hurt consumer spending and increase the risk of economic recession.
Already, the economy is struggling with the jolt due to the Coronavirus, and this can be devastating.
How Can India Ban and Boycott Chinese Products?
If India wants to reduce its reliance on Chinese products, it needs to be done in a phased manner and with meticulous planning.
Rather than banning Chinese products, we should increase the import duty on such products to the extent that local products become cheaper than the imported ones.
Also, products like decoration lights, shoes, clothes, toys, and other low-tech products/ gadgets should have a very high import duty to discourage imports and boost local manufacturing.
Moreover, most of these Chinese products (- shoes, clothes, toys, etc.) selling in the market is without Bill. Moreover, this is a significant loss for the Government as there is no tax revenue from the sale of such products. There should be a strong crackdown on such sales and illegal imports from China.
Further, India needs to build its ecosystem and provide global investors with the right environment, ease of doing the business, less red tape, and infrastructure to boost local manufacturing and IT.
It is not happening in India, look at how the Department of Telecom, Government, and the courts have choked the infallible Vodafone-Idea. This is not the environment in which businesses will survive, and the past is even dark, considering several Global MNCs have lost money (Sistema from Russia, Telenor (Norway), and so many more.
The snail-paced judicial system and corruption in the Government are not going to create an environment needed to bolster the economy and stand up to China. Realities are harsh, and we must not have rosy dreams of replicating China's success without building the infrastructure and systems to help entrepreneurs.
Banning Chinese Product Alone Will Not Help
Banning Chinese products alone is not going to help. However, strengthening the "Make in India" initiative to serve global consumers will go a long way.
On the positive side, India has an untapped opportunity for attracting IT projects, gaming development, and large-scale Apps and software development due to the presence of a large talent pool.
The growing voices to move the manufacturing away from China can help India if the government and local businesses help global MNC's set production units in India.
As the global industries are looking for a new destination to move the investment out of China, India can play a crucial role.
Even our freedom fighters started the Swadeshi Movement to weaken British rule economically. The growing influence and power of CCP have threatened the world, and probably deep down world leaders want a balancing act.
Can US/Other Countries Ban Chinese Products?
US President Donald Trump is furious with China for the spread of CoronaVirus and lack of transparency. He has already said that the US is looking for more trade tariffs to punish China for the wrongdoing.
Further, the US has a considerable reliance on China for imports. The total trade between the two nations was 737.1 Billion Dollars in 2018 (Source). The US imports 558 billion dollars of services and goods from China and exports 179 Billion Dollars of goods and services. It is enormous, even with comparison to India.
Major US companies like Apple manufacture all products in China due to lower operational costs and have made considerable investments in the country.
Considering the above, it is not likely the US can ban trade with China, but there will be consequences for the Coronavirus.
Other major countries such as Japan, Australia, and Germany are also furious with China and may like to reduce the dependence on Chinese trade in the coming months and years.
Global Co-operations is Essential
Without Global Cooperation, it is wishful thinking to Ban Chinese products and makes India "AatamNirbhar" in all sectors. There are several countries like the UK, the US, Japan, Australia, India, Canada, Taiwan, and Hong Kong that are not in favor of the expansion of China and the CCP.
However, on the other side, Europe and Russia are mute even after the new Security Law for Hongkong (Impacting fundamental rights of citizens) by China. There is little to no condemnation by the political parties of several countries that also proves Chinese dominance and influence on those countries.
India can't fight alone this pandemic until unless there is global cooperation to pressurize China. Even then, it is going to be extremely difficult to castigate China and make them respect the national integrity of other countries.
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