We must acknowledge that China has a strategic role to play in India’s growth. It is our largest trading partner: about 16 per cent of our imports, by value, came directly from China in FY16-17, with a little under 4 per cent of our exports going there. However, only 2.6 per cent of China’s exports in 2015 was destined for India and less than 1 per cent of imports were sourced from India. So, if India were to boycott Chinese goods as some ultra-nationalists have been suggesting, it will not make much difference to the world’s second largest economy. But it will hurt Indians — both traders and consumers.
China has been a source of affordable consumer products, both electrical and electronic, since the late nineties. Further, the boycott could hurt flagship programmes such as Digital India. India imports mobile phones and parts, personal computers including laptops, and populated circuit boards from China; the combined value of import of these items was about $7.8 billion in 2016-17. The import of telecom products from China alone came to $4.8 billion, that’s about 29 per cent of all import of telecom products, mostly mobile devices. The import of such items from China accelerated in April-May, 2017 — goods worth over $1.1 billion have already been imported. Other significant imports include solar and photovoltaic panels.
The anti-China brigade wants Indian-made products to replace Chinese goods. But that’s easier said than done. Chinese companies had invested on massive capacity factories when it was seeking rapid economic growth driven by manufacturing. Those plants have the advantage of economies of scale that only a rare Indian factory can match. India is better off focusing on economic activities where it has an advantage over China rather than attempting ill-conceived boycotts.
Tina Edwin Senior Deputy Editor