'Need calibrated call in reducing import dependence from China'

NEW DELHI: India needs to take a calibrated call in reducing import dependence from China and not through sudden stops. At present, a huge clamour has grown about banning imports from China, after the border standoff.

According to the SBI Ecowrap report, India must go for imposing restrictions on certain products in which it has a revealed comparative advantage over China, and which will provide support to the country's MSMEs.

"However, demanding to curtail all imports at one go from a country which is so entrenched in our economic system is unreasonable and might disrupt the local supply chain when looked at, either from the producers' side or consumers' side," the report said.

Accordingly, the report cited that India is dependent on China for a lot of products at the lower end of manufacturing.

In FY97, at 2 digit classification basis, there were 22 categories in which India did not import any- thing from China, whose value of imports in FY20 is around $500 million.

"In principle, China has spread out in all other categories, including low value manufacturing to high value capital and electrical goods," the report said.

"Although value wise the import is miniscule in the categories in which China has started importing over the years, these are some labour intensive and small scale industries like, prepared products of vegetables, fruits, cereals, flour, meat and fish, products of milling industry, wood and articles of wood, headgear and parts."

As per the report, utmost caution has to be exercised to see that the rights of consumers in the form of variety of choice are protected, while making sure that China does not eat away the local industries which can easily build capabilities in these areas, so that India does not have to import these products. (IANS)

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