Game over for Chinese products in India? Modi government to take this big step soon?

It seems, in the view of recent India-China clash in Galwan Valley, the process for bringing an end to sale of Chinese products in India has begun! According to a report, Modi government has sought product-wise details from industry to curb cheap, low quality imports from China. The government has sought product-wise details of cheap imports, comparison with domestic prices and tax disadvantage, if any, from industry to curb low quality inbound shipments especially from China to boost domestic manufacturing, a report by news agency PTI said quoting sources. They said a high level meeting to discuss ways to promote Atma Nirbhar Bharat (Self-reliant India), including cut in import dependence from China, also took place recently in the Prime Minister's office.

Industry was asked to send comments and suggestions on certain number of goods and raw materials imported from China, which include wrist watches, wall clocks, ampoules, glass rods and tubes, hair cream, hair shampoos, face powder, eye and lip make up preparations, printing ink, paints and varnishes, and some tobacco items, the report added. The other details sought include import surge data between 2014-15 and 2018-19; domestic prices of similar goods that are made here, domestic capacity, imports under free trade agreements, and inverted duty issue, if any.

The exercise to reduce and curb imports from China assumes significance in the wake of border tensions between the two countries.

China accounts for about 14 per cent of India's imports and is a major supplier for sectors like cell phones, telecom, power, plastic toys and critical pharma ingredients. The government has recently put import restrictions on tyres, while also making its prior approval mandatory for foreign investments from countries that share land border with India to curb "opportunistic takeovers" of domestic firms, following COVID-19 pandemic, a move which will restrict FDI from China.

During April 2019-February 2020, India imported goods worth USD 62.4 billion, while exports to the neighbouring country stood at USD 15.5 billion in the same period. The main goods imported from China include clocks and watches, musical instruments, toys, sports goods, furniture, mattresses, plastics, electrical machinery, electronic equipment, chemicals, iron and steel items, fertilisers, mineral fuel and metals.

India has time and again raised concerns over widening trade deficit with China which stood at about USD 47 billion during April-February 2019-20.