Mahmood Hassan
(The writer is Director, Char Area Development,
Assam. He can be reached at mahmoodhassan61786@gmail.com)
Leading innovator and educationist Sonam Wangchuk of Ladakh, who was the inspiration behind making the film 3 Idiots, recently gave a social media call for boycotting Chinese goods in response to the Himalayan face-off between armies of China and India at Galwan valley. The response to his call was met with positivity as it drew over 20 lakh viewers in 20 days. Now with the martyrdom of Indian soldiers at the valley the protest against China has grown louder and stronger. But the million dollar question is: Can we really boycott Chinese goods?
The ground reality is completely different .It is a fact that India is a large market for Chinese consumer goods. It accounts 3% of exports from the neighbour that added up to $75 billion up to2019 whereas CAGR growth rate shows increase of 28% between 2007 and 2019. In 2019 alone India exported goods worth $ 16.7 billion. In the year 2016-17 the total of country's exports comprise 60% of exports from China alone comprising electrical and electronic equipments. After all, it is the largest electronic market in the world. The huge trade surplus of China makes us dependent on that country for all the electronic and electric items. These statistics shows how much India relies on Chinese goods. These figures indicate that it will be India that will suffer if we directly boycott Chinese goods .We are not yet ready to produce the goods as China does as we do not have the required capabilities despite running the 'Make in India' and 'Start Up India' campaigns.
India has signed agreement for supply of electric buses with the country. So far China has invested in 18 of the 30 Unicorns which in two-thirds of the total investment are from that country after failing to persuade India to sign the Belt and Road Initiative (BRI) and penetrated very well across the country. Many of the startups that were set up with Chinese investments are doing good business in India. A report published by Gateway House associated with Indian Council on Global Relations states that Chinese tech investment in Indian startups is estimated to be about $4 billion. The Alibaba groups has investment in Big Basket ($250 million), Paytm ($400 million),Paytm Mall ($150 million), Zomato ($200 million) and Snap deal ($700 million). Similarly, Tencent holdings has made investment in India firms like Byju's ($50 million), Dream ($150 million), Flipkart ($300 million), Hike Messenger ($150 million), Ola ($500 million) and Swiggy ($500 million). Chinese are not the sole owners but many are joint ventures. We can now well assume the impact that the dwindling Indian economy and employment sector would face if the Chinese backs out.
The economic world dominance and technological dominance of China is now an undeniable fact. Yet a few things can make the difference. Today 90% of world's electronic market is located in China. China makes 70% of the world's total mobiles at Shenzhen. ZTE, Huawai, OnePlus, Share are some of the mega companies that dominate the world mobile markets. China creates more than 1200 startups every day for the next generation industries. Research & Development (R&D) is given top priorities generating a business of more than$17 trillion (US) providing employment to more than 1.4 billion people. By 2019 they have invested more than $300 billion (US) on this sector. Today science and technologies contribute to 58% of economic growth. Huge investment is made in the electric cars and bikes, LED and AI technologies, 5G communications network, video gaming and virtual gaming industries. There are more than 22,000 companies engaged in the export industries. This is the reason that they are called the 'factory of the world'. The OBOR or BRI initiatives have opened up the connection to the country from all across the world. The goods train run from Yiwu (the place with world's largest wholesale market) to London carrying Chinese goods is a reminder of the economic dominance of China in coming years once the BRI is completed.
Hence competing with the giant neighbour will be big challenge for us. One economist has rightly pointed out that instead of calling for 'Make in India' focus should be laid on 'Made in India' so that Indian products are promoted and sold across the globe. It will be tough and challenging job but there are bright openings as well. Till March, 2020 India did not have items like PPE kits, COVID testing kits, masks etc., and were imported primarily from China. But as demands for these items rose during the lockdown period India is now manufacturing more than 4, 50,000 PPE kits daily and has become the second largest producer in the world. Similarly, more than 25 lakh N 95 masks are manufactured every day. It aims to earn $60 billion by 2025.The country has exported 15 million Hydroxic chloroquin tablets to the USA, being the largest producer of the drug proves the potentialities that the country has.
In order to improve the export of items from India diversification of the export materials has to be looked into. In ease of doing business or Global Innovation index we are down below the global ladder. In order to improve the rankings we have to promote and patent new products through the R&D as done by China. Like China the Research Institutes should be funded for new innovations and patents from every nook and corner of the country. We can manufacture better quality defence products by opening it up to the private sectors. Potentialities in pharmaceutical products, power equipment, electric and fuel cells, electricity storage systems, solar cells and modules, robotics and drone technology, automation or pharmaceuticals items must find the global markets.
Many American companies like Google or Microsoft were moving out of China to some other location due to the COVID situation. India could not take advantage in time and as a consequence these companies shifted their base to smaller countries like Vietnam, Thailand, Indonesia, Singapore etc. These countries have focused on off shore manufacturing lower down the value chain and without the thrust on self-reliance. Smaller countries like Taiwan, Singapore, South Korea, Japan, Hong Kong etc have done exceptionally well by challenging China by making high quality products after taking a huge industrial leap in the 1970s and 80s. South Korea in particular created the value chains in electronics, consumer durables, micro-processors, personal computers. The items from these countries are preferred in India than the cheap Chinese goods. Till today we have not been able to become self-reliant in hardware or software technology. Development of the R&D sector with assistance of Silicon Valley software giant may also be invited to invest in India.
Hence, ban or boycott or any emotional appeal is not the solution in the modern day's competitive world. Pragmatic solutions are needed so that India can become the manufacturing hub for the world. India's industries are still characterized by low productivity, poor quality and low technology. So labour intensive reforms, capital investment, automation, innovation and development for R&D are the essential elements of "Atmanirbhar Bharat "campaign. Unless extensive reforms are carried out we will continue to lag behind. Lately, the Department of Promotion for Industry and Internal Trade (DPIIT), in consultation with other related industries, have identified ten sectors to minimize imports that includes capital goods. The Confederation of Indian Industries has taken a decision to identify more than 3,000 Chinese consumable goods not to be imported again. The National Security Council of India through its agencies has red flagged more than 50 Chinese apps in India has made access to the private credentials of the users which could be treated as security threat detrimental to the country's security. These apps will be blocked if it is found to pose such risk to the country. Slow and steady steps will result in opening up new vistas for India.