Miffed by China’s latest move to block India’s bid to designate Jaish-e-Mohammed chief Masood Azhar a terrorist at the United Nations earlier this month, Indians have called for a boycott of Chinese goods, interpreting Beijing's actions as tacit support to Pakistan.
With India and Pakistan hitting a new low in their relationship after the terrorist attack in Kashmir's Uri town in September and the military strikes carried out by India across the Line of Control days later, the call on social media to boycott Chinese products has been echoed by members of the ruling Bharatiya Janata Party too – with one exception. Prime Minister Narendra Modi has not given in to the mounting public pressure as his government seems more intent on improving trade ties with China rather than with cutting it off.
The trade deficit between the two countries is massive as India imports seven times as many goods from China as it exports to it. In 2015-'16, Indian exports to China stood at $9 billion while its imports were worth $61.7 billion, leaving a trade deficit of $52.7 billion.
On the sidelines of the two-day BRICS summit in Goa that concluded on Sunday, the prime minister met his Chinese counterpart Xi Jinping and the two discussed the trade deficit along with other issues, such as terrorism. There was no joint statement at the end of the meeting, but spokespersons said India was satisfied with the bilateral talks.
Earlier, at the India-China Strategic Economic Dialogue in Delhi on October 7, the two sides agreed to boost economic ties through cooperation in sourcing energy from international markets and constructing high-speed railway and coastal manufacturing zones.
“Chinese investors showed keen interest in financial investment and participation in large solar park projects in cooperation with the Solar Energy Corporation of India,” said a release of the minutes of the meeting, which was led by NITI Aayog Vice Chairman Arvind Panagariya, from the Indian side.
At the dialogue, India expressed concern about the burgeoning trade deficit, with the aim of securing cooperation from China in developing infrastructure in India. China responded by signing multiple agreements with India at the level of official think tanks.
India aims to boost the share of its manufacturing sector in gross domestic product from the current 16% to 25% by 2025, and wants Chinese companies to set up manufacturing units in the country.
India also requested China to provide greater access to its goods, such as oilseeds and tobacco, and faster clearance for its rice and pharmaceuticals when Commerce and Industry Minister Nirmala Sitharaman met Chinese Vice-Minister of Finance and Commerce Wang Shouwen on Thursday. The Chinese minister responded by saying his government was working towards providing India more access to its markets.
No boycott?
As the process of deeper economic integration between the two countries is underway, China remains India’s biggest bilateral trade partner and the calls for #BoycottChina have had hardly any effect on the sale of Chinese goods in India.
The Chinese official media claimed on Friday that sales of the country's goods in India had hit a record high during the ongoing festive season. The state-run Global Times said Chinese technology company Xiaomi had sold half a million phones online through festival sales on e-retail platform such as Flipkart and Amazon.
The report added, “However, regardless of the passionate boycott in India and the Indian media’s hysteric reports of a 'doomsday' for Chinese products, Chinese goods have never been condemned by the Indian government and are popular across the nation."
It said Chinese investment in India in 2015 stood at $870 million, a six-fold increase from 2014. It added that Indians loved Chinese products and the trend was “irreversible”.
Multiple editorials in the Indian media, too, termed the boycott call a futile move, pointing out that a large number of the mobile phones and laptops and other devices used to spread the boycott messages were made in China.
However, there are many in India who are taking the boycott call seriously. Media reports said a few trade associations had decided not to stock Chinese goods this festive season. For instance, the Ludhiana Wholesale Firework Association has decided to push Indian crackers this Diwali instead of the cheaper and popular Chinese variety.
“Country is supreme and all other things come later,” the association's Ashok Thapar told the Times of India. "Thus, we have taken this decision and believe people are really very unhappy with the Chinese support to Pakistan and they do not want to buy Chinese goods, be it crackers or other goods."
Business sense
As for Indian business, it stands to benefit a lot more from open trade with China than from boycotting it. For instance, China has shown interest in investing in the Smart Cities project with its offer of high-speed railway technology. In some cases, projects under the government's flagship Make In India programme have also ended up in China because of cost advantages available there. An example of this is the proposed statue of Sardar Vallabhbhai Patel – touted to be the world’s tallest – at Sadhu Bet in Narmada district of Gujarat. The statue was to be created from bronze and iron sourced from India’s farmers. However, it will now be made in China with the bronze parts and the labour expected to come from the neighbouring country. The state government has said it can do nothing about this as it had earlier given the construction company the authority to decide where to source the material from.
Despite hiccups such as Beijing's stand on Pakistan-based terrorist Masood Azhar, cooperation between India and China to boost economic ties goes back a long way with both sides keen on wooing investors rather than shunning them out of nationalistic impulses.
In June, Finance Minister Arun Jaitley addressed the Invest in India forum in Beijing where he promised Chinese investors high-growth potential even in an “unsupportive global environment”.
He said, “And for a large number of Chinese investors present here, I think having gone through that experience in China, we are now passing that phase where there is massive infrastructure programme which is on India. Part of the infrastructure programme we are building rural roads, national highways."
