As Diwali was approaching in October 2016, China’s love for
Jaish-e-Mohammed ( JeM) Masood Azhar riled Indian nationalists into calling for a boycott of Chinese lanterns, which had flooded Indian markets ahead of the festival of lights.
But as debates continued to rage on social media about why it was totally anti-national to celebrate Diwali with Chinese crackers and lights, the boycott slowly fizzled out after traders and customers quietly sidestepped such calls.
It is near impossible to avoid Chinese products in Indian markets, more so around special occasions such as Diwali or even Holi. Neighbourhood shops are currently stocked with
pichkaris (water pistons), Holi colours and balloons for the festival of colours next week and much of their stock has come from China.
A little over two years after that short-lived, self-imposed ban on Chinese goods, a similar sentiment is being created again. As usual, China has once again vetoed India’s proposal the UN Security Council (UNSC) for terming Azhar a global terrorist after India moved this resolution as a fallout of the
Pulwama terror attack last month.
Though other world powers seem to be on India’s side and are seen contemplating other measures to squeeze terror funding to terrorists, India’s hyper-ventilating nationalists are once again harping on a boycott of Chinese goods to show their anger.
The hashtags #boycottchinesegoods #boycottchineseproducts and some similar sounding other hashtags are encouraging people on Twitter to refrain from buying anything Chinese.In fact, the Confederation of Indian Traders (CAIT), an umbrella body of small traders, has announced a mass burning of Chinese products on March 19 to show its anger at China’s stand on Azhar. And the RSS affiliated
Swadeshi Jagaran Manch has written to the Prime Minister to revoke the ‘Most Favoured Nation’ (MFN) status to China while also calling for a ban on Chinese goods. An MFN status ensures that an importing country will not discriminate against another country's goods in favor of those from a third.
The nationalists seem unaware that their actions are unlikely to help India, at least in its present status as a big importer of specialised goods and services. These hashtags, in fact, show all that is wrong with the keyboard warriors, the hyper-nationalists inundating social media platforms, who make such calls without checking out ground realities.
First, some trade data. China is India’s largest trading partner, 12 percent of all India’s external trade happened with that country in 2017-18. Then, the trade balance is heavily skewed in China’s favour. This means we import far more from China than we export to that country. In 2017-18, what we spent on imports from China was roughly one-and-a-half times what
India earned through exports to that country.
It is no surprise then that China continues to have the largest share of India’s import basket. In 2017-18, imports from China accounted for 16 percent of India’s total imports. Though the share has fallen in the first nine months of the current fiscal to about 13.4 percent of India’s total import basket, China’s dominant position in our external trade cannot be wished away.
Imports from China stood at a little over Rs 27 lakh crore between April and December 2018, against a little over Rs 30 lakh crore in the same period of the last fiscal, according to commerce ministry data. The country's trade deficit with China remains high as Chinese exports to India rely strongly on manufactured items to meet the demand of fast expanding sectors such as telecom and power. India’s exports to China, on the other hand, are characterised by primary and intermediate products.
The upshot of this is that we send products to China which are not high value-added, whereas China is sending products such as telecom instruments, computer hardware, peripherals, fertilisers, electronic components/ instruments, project goods, organic chemicals and drug intermediates, consumer electronics, electrical machinery and equipment, iron and steel etc.
Between April and December this fiscal, the amount we spent on importing goods from China was more than the combined of imports India made from the US and the UAE. In this scenario, with heavy dependence of India to Chinese imports, how practical is it for the country's traders and shoppers to avoid purchasing a
made-in-China product for long?
Some social media users pointed out how the boycott of all goods Chinese is next to impossible.One Twitter user quipped:
And another one said:
Instead of targeting the sale of small-value Diwali or Holi items imported from China, calling for a boycott of Chinese handset or equipment makers, India should be looking to demand greater market access for some of its exports to China.
Of course, we also need to take some major initiatives to correct the widening trade imbalance between the two countries and try and lessen our import dependence. But until this is achieved, India is really in no position to avoid using Chinese goods which have flooded our local markets.
We are already at the receiving end of US’s recent actions which will impact the two-way trade between the two countries severely. After China, the US is India’s second largest trading partner. If we open up a second front for war with China when things with the US are not “smooth” it would seem to be a knee-jerk reaction.This tweet seems to aptly summarise the dilemma before Indian nationalists:
Time to take action with cool heads on China.
Sindhu Bhattacharya is a journalist based in Delhi who writes on a range of topics in business and economy.