Ban Trade with China!
With the ongoing brat between India and China regarding borders, some patriots of India are demanding to ban China-made products and services. Is it really good to ban or will it make worse for the Indian economy?
The disputes about borders exists since the independence of India. India didn’t stop trade ever with Pakistan, why now, because deep down some of the Indian patriots think, China exports a lot to India and at a convincing price for a convincing product, unlike Indian products. But in reality, China exports just 3% of its global market to India, and India imports 14% of its imports and exports less than 1% to China.
What happens now if we ban trade with China?
The first thing it effects is inflation, which is spiking in India with effect of Government decisions and COVID-19. Since the demand for the products rise as the 14% have stopped. Demand with shortage created war for onion in India. Imagine the same for the medicinal drugs and other products on which life depends.
India imports more than 80% of pharmaceuticals raw materials for antibiotics from China and solely depends on China for 8 out of 68 drugs raw materials. Pharma companies buy these raw materials at a 15% – 20% lower price. All most all the drugs you use are linked to China. Banning trade hike the price and shortage of important drugs and leads to high demand. Banning trade is not an option before our Government creates opportunities for Indian Companies.
Automobile Industries too started leaning towards China for their affordable market price. Just in 2013–14, the imports rose from 3.4% in the 2012–13 fiscal year to 24%. Indian automobile market depends on Chinese intermediate products for the final product. A statement by TVS Motors, Chairman, Venu Srinivas, regarding the effect of the ban on trade with China on motorcycles production cost the share price of TVS motors negatively. That’s how the Indian market is dependent on China.
India imports 20% of Nuclear reactors and parts and 12% of organic chemicals. India mostly depends on China for almost to work out the ‘Make In India’ slogan. India imports $30 billion worth of electrical equipment and other machinery equipment every year since 2014.
Mostly, the machine that manufactures in India is from China, the drug Indian patriot uses for a cure has Chinese raw material, the automobile you drive has Chinese intermediate products. The phone we use is a Chinese product and T.V. that is made in India is built with Chinese electrical raw materials.
Make In India is just a slogan but everything that made in India has at least 10% of Chinese made Intermediate products. Before India bans trade with China, India should develop its research and design. India should work towards developing skilled workers. Then they have to think to ban Trade with China. It is going to affect Foreign Investments too. China exports just 4% to India and remaining to the other world, which has an interest in investing in India.
Banning trade or levying high taxes is just not an option, this would be violating the World Trade Organisation (WTO) rules and the remaining world can reciprocate the same. It’s easy for the world or China to bypass India and carry on the trade. Linking small-time patriotic emotions with the economy is bad for our country with poor infra and research and development. The economy is way more effective than being patriotic. A poor and middle-class patriots will be affected as they don’t have the affordable option with the ban.
Borders are always an issue between neighboring countries, for which the country has an army, navy and airforce and 10% of the county’s budget goes to them. India has well-equipped armor and machinery to fight China. Let’s give war if China asks for it. The financial war just costs us more than China itself. Prepare India with research and development by changing the way educational institutions work and develop the skilled workers.
“Sometimes it’s hard for us to grasp things that go against what we are conditioned to believe.”
