Home Article Economic retaliation against China may not be feasible at this juncture

Economic retaliation against China may not be feasible at this juncture


Economic retaliation against China may not be feasible at this juncture

Ubaidullah Nasir

There is natural anger dismay and call for retaliation against China at the brutal killing of our two brave hearts. No words are sufficient to condemn this cowardly and most unprofessional misdeed of Chinese troops who attacked our unarmed soldiers with lethal non fire arms. Prime Minister Narendra Modi has assured the nation that the martyrdom of our brave hearts will not go in vain. The nation is looking forward for the steps his government is going to take to teach China a lesson as was taught to Pakistan after Pulvama incident.

There is a cry for boycotting Chinese goods. There are demonstrations showing people burning Chinese items. This type of national fervor is natural but short timed. People may be emotional but the governments not. They have to look after every pros and cons before taking any decision. The economic boycott of China is an option but before taking this decision government should not forget that Chinese items big and small have become part of our life secondly goods worth billions are lying in the godowns of our traders.  If Chinese items as is the national cry are boycotted our traders already facing the heat of demonetization,GST and lockdown will be severely affected, their backbone will be thus broken that they will hardly be able to stand up again. China has already got payment of these items so it will not face any loss, it is Indian traders who will at the receiving end so we have to adopt a realistic position. At this crucial juncture the demand for boycotting Chinese goods may make for good optics it may satisfy the ego of our ultra nationalist but it has its own consequences. Though our balance of trade is severely bent towards China Our import from China is worth 80 billion dollar approximately whereas export is just 16 billion dollar, still our import from China is very small rather miniscule of China’s total import to other countries including USA. Markets of every country are filled with Chinese items, thus this step will have little impact on Chinese economy and on its leadership. On the other hand its implications for India will play out at multiple level.

Secondly we must not forget that we are depending on China for a wide range of goods from electronic items to fertilizers. Even idols we worship are made in China. For our production also we import goods from China.It is rightly said that Made in China is helpful in make in India. There are thousands of items whose ingredients are parts are imported from China and are assembled or reproduce in India. Any attempt to reduce import from China by increasing tariff or other such steps may harm our industry also. Producing all such intermediary items that we import from China is a gigantic task it will take years to materialize and is not sure that it will as cost effective as Chinese items are. Thus the price of finished items may be much higher than we are used to pay both time and cost are not favouring this step.NO doubt there is need to build up domestic capabilities. Our MSMEs may play a vital role in fulfilling this task all the bottlenecks that are hindering the growth of this sector should be judiciously removed. Our strategy must be to boost manufacturing competitiveness and priority should be to increase our share in world trade. But this a long term task and needs planning and implementation with sincerity and depth. Unless we stand up on our feet boycotting Chinese goods specially intermediaries may be counter productive.

However government of India has taken certain steps to give China some economic jerks. Department of Telecommunication has conveyed to BSNL that it must not use Chinese equipments in its network upgradation plan but unless private players in this sector are also prohibited to not use Chinese equipments it may be a death knell for already devastated BSNL. Just one or two days before this dastardly act of Chinese troops two major contracts were granted to Chinese company, fate of this contract is yet not clear hopefully they will be cancelled if have yet not been cancelled. Similarly government of Maharashtra has also granted a big contract to Chinese company. One hope all such contracts will be cancelled.  

China is the most unpredictable country of international community. Dealing with it require extra conscious and foresightedness. Its global ambitions are no secret. Till yesterday it was working to become Asian giant now it wants to become global giant pushing US to secondary position. It has border dispute with almost all its neighbours Japan Vietnam India but very tactfully it has tightened noose around India Pakistan and now Nepal are its major strategic partner in this task. It is a great test for Indian diplomacy but unfortunately due to internal political priorities Modi government has annoyed all its neighbours which is detrimental to our interest .This is the time to relook at both our internal and external policies .Economic retaliation against China will be easier to be taken  with this course correction.        

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