Monday, October 17, 2016

Why India Will Not be Able to Completely Ban Chinese Goods

BENGALURU: China is a close ally of Pakistan and amid Indo-Pak tensions the dragon nation not so surprisingly supported our immediate neighbor. They blocked India’s entry into the NSG group, two times used their veto for saving the leader of the terrorist group Jaish-e-Muhammad, Masood Azhar, blocking water of the Brahmaputra, etc. China is continuously bogging down India because of Pakistan. Now there are various social media campaigns going across the country to ban Made in china products and to use country made products. However, Economic Times explained that why the ban on Chinese goods will be a failure.

The campaign to ban Chinese products drew support from some political leaders, but also there is a fact that currently, China shares one-sixth of India’s total imports. It was one-tenth in 2011-12 and on the other hand export of Indian goods to China is decreased to half in the same course. Total import of Chinese goods grew at 20 pct in last two years and reached to $61 Bn.

India exports petroleum, copper, cotton, and industrial machinery to China and apart from these goods, we are not exporting many other goods to our neighboring country. On the other hand, we shop for the goods ranging from home d├ęcor to electronic items and power plants. Because of the drop in global oil prices, India’s imports fall down to $490 Bn to $380 Bn in last five years. Former Governor of RBI Mr. Raghuram Rajan, referred China as the manufacturing powerhouse of the world in his research paper published in February 2006, written with Arvind Subramanian, Chief Economic Advisor.

The stagnating indices in the manufacturing sector are showing that India is still way behind China, despite the record FDI of $55 Bn in 2015-16. India is struggling because of the sluggish private investments in manufacturing.

China became a global powerhouse after rapid market reformation in the 1980s. It increased its production capacity by reforming land and labor, as a result of which the fertilizer, steel, and iron production of India is not one-tenth of China.

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