Covid 19 Saga – III
Boycott of Chinese Products
The stand off between India and
China has now brought us face to face with a reality of India having to take a
hard stance on the rhetoric of ‘Boycott Chinese products’. While an analysis of on the ground reaction
and related economic fallout is a complex theme in itself. A primary look into the investment pattern of
China in India through its own companies or Indian subsidiaries throws up
important statistics.
While it goes without saying the
China has been slowly and steadily increasing investments all around the world,
In India it has stealthily forged strategic alliances to make a build up
despite tight monitoring and control. If
we go by figures quoted by prominent institutions in respect of Chinese investments
in India Sectors it could be see the following:
No.
|
Sector
|
% of
Investment
|
1
|
Automobile Industry
|
40%
|
2
|
Metallurgical Industry
|
17/%
|
3
|
Power
|
07%
|
4
|
Construction
|
05%
|
5
|
Services
|
04%
|
A list of Chinese Companies in
India is given below:
Mobile Companies in India include
Xiaomi (MI), Oppo, Vivo, One Plus, Huawei, Coolpad, Motorola, LeEco, Lenovo,
Meizu, Tecno, , Honor, Gionee, Gfive, Hair, TCL etc. A number of Chinese software companies have
also made inroads into India these include Alibaba Group with UC Browser,
Bytedance with applications like Tik Tok, Vigo Video, News Republic, Tencent
holding with popular games like Pubg ad WeChat, Cheetah mobile with apps like
Whatscall, Cheetah keyboard, CM Browser, Tap Tap Dash, Huwei and ZTE.
Other Chinese majors in India
includes, Haier, Volvo (owned by Geely), MG (owned by SAIC Motors), Nippon
Paint (India) Pvt. Ltd, Shanghai Electric India Pvt. Ltd., Beijing Automotive,
WISCO (I) Pvt. Ltd., ZTE Kangun Telecom company (I) Pvt. Ltd, China Dongfang
International, Baoshan Iron and Steel Ltd., Dongfang Electric, Sany Heavy
Industry Ltd, Cheetah Multitrade P. Ltd., YAPP India Automotive Systems Pvt.
Ltd.
It has been reported that Investments of China
in Technology for Indian Startups exceed $ 4 billion!. India’s top 30 companies
which are each worth over $ 1 bn (Unicorns)m 18 are funded and technology
driven by the Chinese. Paytm, Hike Messenger, Ola, Bigbasket, Byjus, Dream 11, IBIBO,
Make my Trip, Snapdeal, Flipkart, Mydermacy etc are other majors operating
doing well in India.
Chinese investments in India
stood at $.6 billion in 2014 which have now risen to $ 8 billion in last few
years. In fact 4 out of 5 top mobile Chinese
brands have heavy presence in India these include Xiomi with 7 factories in
India besides several others who have planned to invest more than $500 million
in this country.
Considering the fact that, any
fresh investment would require Indian government’s approval, the move could in
reality lengthen the transaction time which is most likely to impact fresh
investments in Indian companies by Chinese investors, translating to the fact
that many Indian startups in India and others looking out for investments could
be staring into the blank for an undefined time into the future.
From a consumer’s point of view
the options of products and price tags on individual products could see an
upsurge. With tightening up of imports from China and non viable options from
other markets local vendors could be in a spot unless they tie up with bigger
vendors like Amazon who deal in global sourcing of products. This would anyway be detrimental to the
Indian dream of seeking self reliance in production of such items as challenges
of quality, price and international competition would hamper quick growth without
proper R&D.
In the short term several small
items may go out of market on persistent demand and others may see a rising
price graph. The hay days of Indian
consumers may be vanish and India would be a humble buyer’s destination in the
absence of robust and consistent growth of its employment and economy.
Imagining a quick
boycott of Chinese products could be easy but to strictly implement a policy in this direction could be bitter pill for
all. While on one hand government may
seek to snap ties with Chinese contractors, legal parameters will allow the
companies having exposure to Chinese investments to downplay the boycott and
continue with their operations if no legal strictures are issued against them
in this regard. As regards boycott by
citizens of India, in the absence of a clear understanding of which companies
are peddling which Chinese products, it would be difficult to screen and personalize
buying or usage preferences by them.
While it would be premature to comment on how an average
Indian on the street would feel the pinch on account of such a boycott but the
complete story would certainly need an elaborate mechanism right from the policy
level to the implantation stage for a smooth transition. However in the wake of Covid 19 pandemic and
constraints on account of a global shrinkage in investments and supply, a stage
has come for the Indian markets to revert back to times of rationing, shortages
and maintaining essential supply chain processes.
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