Indian Government Begins Moving to Curb Chinese Imports

The government of India is stepping in to help local manufacturers develop alternatives to Chinese imports and is officially asking consumers to boycott Chinese products in retaliation for the border skirmish that left at least 20 Indian soldiers dead last week.

“I want to appeal to everyone that the way China is behaving, we boycott all Chinese products. We have to give them a strong reply for their barbaric attack,” Indian cabinet minister for consumer affairs Ram Vilas Paswan said at a Thursday press conference.

“China is a country that deceits. India should boycott all products from China. Chinese food and restaurants should be closed in India,” Indian social justice minister Ramdas Bandu Athawale added via Twitter.

Indian officials have directed state-run enterprises to seek alternatives to Chinese products, especially in the sensitive telecom sector, and announced plans to raise tariffs on Chinese imports. Private trade groups are also encouraging boycotts and calling for increased domestic production to compete with China’s position in key industries.

These efforts have run into some difficulty because China’s position in markets such as telecommunications proved to be more dominant than the Indian public realized. Boycotting Chinese telecom giants such as Huawei and ZTE is proving to be effectively impossible for Indian consumers, at least not without paying far higher prices for equipment and services.

The Times of India (TOI) reported on Monday that a major government effort is underway to “curb low-quality inbound shipments, especially from China, and boost domestic manufacturing” with the goal of creating a more “self-reliant India.”

India’s private corporations have been asked to “send comments and suggestions on a certain number of goods and raw materials from China,” including “wrist watches, wall clocks, ampoules, glass rods and tubes, hair cream, hair shampoos, face powder, eye and lip makeup preparations, printing ink, paints and varnishes, and some tobacco items.”

The Indian government is reportedly studying surges of Chinese imports that occurred in 2014 and 2018, with an eye toward helping domestic suppliers recapture the markets – an effort that seems likely to include higher tariffs and other trade restrictions on Chinese goods. India’s annual trade deficit with China currently stands at about $47 billion.

“The government has recently put import restrictions on tires, while also making its prior approval mandatory for foreign investments from countries that share a land border with India to curb ‘opportunistic takeovers’ of domestic firms following the Covid-19 pandemic,” TOI reported.

The Boycott China movement has grown strong enough to make the Indian sports community nervous, as the Indian Express reported on Monday. 

More than half of India’s sports equipment is imported from China, from gymnasium gear to badminton racquets. Some of India’s locally-produced athletic gear has never been certified by international sporting federations, so India’s top international competitors find it necessary to train with Chinese-made equipment even though Indian-made alternatives are available, and some of those local products are made with imported raw materials.

“We need to invest in research and development, and overcome pricing problems. We can’t just suddenly start boycotting Chinese products,” one prominent Indian sporting goods manufacturer complained.

Another concern raised by Quartz India is that India’s thriving ecosystem of high-tech and entrepreneurial startups is heavily dependent upon Chinese investment capital and business advice. 

Some Indian financial analysts are worried that the Boycott China movement could scare Chinese investors away or alienate them, or that Beijing might order investors to pull out of India in retaliation for the boycotts. They also worry that Indian consumers might turn their wrath against local start-ups with Chinese connections. Indian companies have been advised to seek financial backing from a broader range of international investors, but over the past few years they have grown heavily dependent on Chinese money, and it will take time for them to diversify.

Chinese state media is, of course, hooting from the sidelines that India would be committing economic “suicide” by angering China or boycotting its products.

“It is irrational for India to heat tensions or reduce economic ties with China as the two countries are not in the same heavyweight class. China has been a top trading partner of India for years, while China’s exports to India have accounted for about 2 percent of its total exports,” the Chinese Communist Party’s Global Times sneered on Monday.

Some Indian publications are reluctantly admitting that the Chinese papers are not far off in their analysis. The Hindustan Times on Monday called the Boycott China movement “half-baked,” essentially arguing that Indians allowed themselves to become dependent on China over the past two decades and cannot reverse that course in a matter of days with a fiery hashtag campaign.

“Hurt by China’s aggression, several Indians, including many in the government, have argued in favour of boycotting the use of Chinese products. However, for a variety of reasons, this strategy, while targeting China, is likely to hurt India far more,” the Indian Express agreed, citing a far greater dependence on China for raw materials and “intermediate goods” than many Indian citizens realize.

“Many readers have asked if that means India should resign to becoming a ‘slave’ to Chinese imports. Thankfully, the answer is ‘no,’” the Indian Express wrote on Monday. “But the path to overcoming our dependence on Chinese goods – or for that matter, imports of any other country – requires Indian policymakers and businesses to put in real hard work and not resort to lazy solutions such as banning trade or raising tariff barriers.”

From this perspective, Indians are getting the same painful lesson about the failure of globalism as Americans and Europeans. Globalism’s core promise, going back to China’s admittance to the World Trade Organization and its meteoric rise as a global trade and investment powerhouse, was that the brutal engineers of the Tiananmen Square massacre would be liberalized by commerce. 

Instead, commerce became a weapon in the hands of China’s authoritarian rulers, who worked quickly to establish dominant positions in the economies of the free world and make foreign companies dependent on profits from China’s emerging markets. In short, the free world is waking up to the realization that it cannot boycott China, no matter what horrors the Chinese Communist Party unleashes upon the world, from global pandemics to territorial aggression. China’s true top exports since the 1990s have been dependency and control.