Ban on goods would hit Indian consumers, Chinese media warns India

07 November 2016

Despite the boycott campaign, Indian retailers continue to sell Chinese products under “false Make in India labels” and cautioned that any further anti-China move by India would compel China to take counter measures that would only hit the Indian consumers.

Chinese media suggested that China and India need to “clear up the misunderstandings that risk the hard-won economic ties.”

Taking cognizance of Indian media reports that the Indian government is mulling to reduce or delay tariff concessions to Chinese imports under the Regional Comprehensive Economic Partnership trade agreement in order to narrow its trade deficit with China, the GT suggested that delaying tariff concessions would have an opposite effect rather than narrowing India’s trade deficit with China.

“The move would not only increase the cost of Indian imports but would also affect upstream and downstream industries and cost jobs. Take the steel industry, for example. China exported 3.6 million tons of steel to India in fiscal year 2014, a year-on-year surge of 232 percent, to become the largest steel exporter to India. If the price of steel from China were raised, the higher cost would get passed on to the Indian consumer,” the GT reported.

Describing the ongoing campaign in India to boycott Chinese goods, particularly during the Diwali celebrations, as a “short-sighted political interest” of Indian politicians, the GT suggested, “Instead, they (Indian politicians) need to decide whether they want to pursue short-sighted political interests that hurt Indian consumers or pragmatic economic engagement with China that benefits both”.

“Indians can argue that through the Make in India campaign Indian products will be more competitive and replace Chinese goods. But neither the necessary upgrades nor the move up the global value chain can be achieved overnight. At the moment, retailers in India are reportedly selling Chinese products under false “Made in India” labels in order to avoid further losses.”

Source – TOI