Business from China – uttamhindu.com

India’s biggest opponent on the world stage is China, Pakistan’s friend China opposed India not only in matters between India and Pakistan. Rather, it has protested at every level to stop India’s progress on the path of development, but despite this, Chinese products are occupying the markets of India. According to experts, India’s trade deficit has exceeded $100 billion due to high imports from China and low exports. In 2022, the bilateral trade of India and China will be 135.9 billion dollars. In this, there was a difference of more than 100 billion dollars between imports and exports. The overall picture of bilateral trade with China is worrying. While imports from China have increased as compared to a year ago, there has been a substantial decline in exports. The way China seems to be making every possible effort on every front to hurt India’s interests, in such a situation the question is strategically important as to why we are not able to reduce business with it even if we wanted to. This one-sided trade is only going to give strength to China. The question is also serious because the trade deficit has crossed $ 100 billion at a time when efforts are being made to increase domestic production continuously through various schemes ranging from self-reliant India to Make in India. This is a huge opportunity for the entrepreneurs and industrialists of India, but we seem to be missing out on taking advantage of it. We also have to reduce our dependence on China and become its alternative at the global level. For this, our industries will have to invest in technology and focus on increasing productivity. On the policy front too, it is time to understand and remove our shortcomings in terms of trade.

Regarding the loss in trade with China, economic experts say that the growing trade deficit with China is a matter of concern, but it is necessary to understand its signs in totality. Talking about India, the increasing import from China is like a catalyst for the revolution taking place in the field of technology here. The country is continuously moving towards becoming a digital economy and in such a situation, the import of electronic equipment, computer hardware, phone related equipment has increased. This import is actually the foundation stone of the country moving towards technology. Similarly, raw materials, components etc. imported from China are playing a role in supporting Indian industries. This shows that the manufacturing sector in India is coming back on track and demand is increasing. According to a recent report by S&P Global, manufacturing activity in December was at a 13-month high. This has happened due to the entry of new businessmen and increase in demand. The Government of India has recently launched the Production Linked Incentive (PLI) scheme in several sectors. This has led to a sudden boom in manufacturing. The requirement of raw material has increased to maintain the production. At present, domestic OEMs and MSMEs are not able to meet the demand of these sectors, hence the import of raw materials from China has increased. One more thing, the main reason for increasing imports from China is the cheapness of the products there. For this reason, many Indian companies prefer to import from there. Need to understand why Chinese products are cheap? The main reason for this is China’s non-compliance with World Trade Organization (WTO) rules. China follows some rules, but there are many cases of violations. Through subsidies, it keeps the price of its exported products very low. To deal with this, many countries including India impose anti-dumping duty on imports there. If China starts following WTO rules, the difference in prices will reduce to a great extent.

Not only India, but many countries including Japan and South Korea are affected by China’s aggressive behaviour. Hundreds of companies in Japan and South Korea have started looking for alternatives by closing their factories from China. According to a survey, 23 percent of European companies want to move away from China, but are finding it difficult to find alternatives.

It is clear from the above facts that the world is troubled by China, but it will take time to distance itself from China. India will have to reduce the growing dependence on China economically by adopting an aggressive approach towards China. Indians will also have to adopt Indian products ignoring the cheap prices, only then the losses coming from doing business with China can be controlled.

– Irwin Khanna (Chief Editor, Dainik Uttam Hindu)