“Dhonpor bhor udkant vachun, kaxtti suki”, so goes a Konkani proverb meaning diving in knee deep water and sporting dry loin clothes. This is what the down line BJP party leadership and their affiliated outfits are projecting to the people by giving calls for a boycott of Chinese goods. Prime Minister Narendra Modi and the central government have stepped up imports from China of all health equipments and accessories required to answer the challenges posed by the COVID-19 pandemic. In fact, there is no challenge to China as this populous nation of industrious people is exporting to most of the other nations of the world. Recently, the Reserve Bank of India issued a license to Bank of China to launch operations in India. This is a follow up on the commitment made by the Indian Prime Minister to the Chinese President Xi Jinping.
It is true that both China and India have sticky boundary issues and a standoff at Ladakh. Reports indicate that there is Chinese intrusion as the Line of Actual Control (LAC) lies undemarcated. This is the biggest challenge to the hyped nationalist image of Prime Minister Modi and Home Minister Amit Shah who refer ad nausem to pre-emptive air strikes and surgical strikes by India to defend its territory. These issues should not be used to incite the people by redefining patriotism through ban on imports or boycott of Chinese products. This would be catching the bull by its tail. If we do this, the result is obvious. We get nothing.
Boycott by India, even if it materialises poses no economic threat to China. The share of India in total exports of China is 3 per cent, while the share of China in the total exports of India is 8 per cent. India is presently in a phase of “import dependency” from China especially in respect of auto, electrical and electronic components which constitute around 54 per cent of India’s imports from China. Take the current instance of Indian MSMEs in providing the Personal Protective Equipment (PPE) kits, masks, testing kits, ventilators and alcohol-based hand sterilisers. The supplies from local units are highly inadequate making it almost non-negotiable to procure from China. Further, the local units are handicapped to undertake expansion in capacity as the pumps required in sanitisers are procured from China. Indian companies producing bulletproof jackets for the army are importing Chinese raw material due to price advantage. The Chinese import is visible in Indian products such as mobiles, laptops, computers, medicines and industrial machinery.
We also need to consider that India’s exports to China are largely primary products such as iron ores, slag and ash, organic chemicals, marine foods and cotton. This accounts for 60 per cent of our exports to China, though we are now diversifying into pharmaceuticals, engineering goods, gems, diamonds and jewellery. At present, the value of our imports from China far exceeds the value of our exports to China resulting in a glaring trade deficit.
China has twin advantages – economies of scale and the low cost of production. This explains the capture of nearly 70 per cent of the toy market in India by Chinese companies resulting in the closure of Indian companies. The smartphone market could be said to have almost landed in the lap of China-based vendors. A blanket ban is unthinkable in context of WTO regulations. A voluntary boycott is simply impractical considering the propensity and ability of Indian consumers tending towards cheap and competitive products.
Import substitution by India through local and home production would not be feasible looking at the cost advantage of Chinese companies and suppliers. The government has to also guard the interests of the consumers and just cannot create a high-cost sheltered market for domestic companies under the banner of “Atmanirbar Bharat”. This could remain as a good slogan for political rallies to whip emotions. The road to “Be local, manufacture local and buy local” should be through greater productivity and efficiency of local firms. The government needs to move on reduced taxation and eliminate bureaucratic roadblocks. Innovations and start up enterprises should be encouraged with tax reliefs, subsidies and easy access to funds and infrastructure.
Public posturing of retaliatory action against China and beating the drums of strong military answer at BJP political rallies by Amit Shah and Rajnath Singh would render good and quiet diplomacy ineffective. The attempts to cover up economic failures commencing from demonetization days to the current pandemic times by the rising impractical ‘desi’ rhetoric – “Be vocal for local” – will further unnerve the corporate world expecting accelerated economic reforms from Narendra Modi as opposed to retro modelling of economic philosophy.
Ban and boycott Chinese goods are good music to the ears. But, it is suicidal economics and bad politics. This is also an attempt to spread lies. This is nothing more than spraying the opium of nationalism enveloped with patriotism and pride of “Bharat Mata”. This provides opportunity for governance and governors to be opaque and dictatorial with people not knowing the exact situation on the borders.
The State units of the BJP and its frontal organisations are misguiding the people and keeping them drugged with the boycott sloganeering. They may flood the nation with print and publicity materials including T-shirts displaying “Boycott China, Ban Chinese products”. The innovative and industrious people of China would be ever glad to grab this as business opportunity and dump the required quantity of “Boycott China” signage in India at rock bottom prices.
(The writer is an educationist and political commentator)