How households in India bank on Chinese imports
An analysis of imports of Chinese items shows that a complete boycott of Chinese everyday goods is easier said than done.
The rise in tensions between the armies of India and China along the eastern Ladakh border in recent months has led to calls for a complete boycott of Chinese goods in India.There has also been an increase in calls for using India-made products to reduce the dependence on Chinese imports. In order to increase pressure on China to resolve the border impasse peacefully, the Indian government has banned 224 Chinese mobile apps in the last three months, including popular ones like Tik-Tok, UC Browser and WeChat.
An analysis of imports of Chinese items shows that a complete boycott of Chinese everyday goods is easier said than done. Data from commerce ministry shows imports from China have only fallen by 14.5 % in the past two years to $65.26 billion in 2019-20 after reaching a high of $76.8 billion in 2017-18. Even after such a reduction in imports, a majority of daily household items are still largely brought in from China. Over 50% of items like footwear, knitted fabrics and furniture products, among others, are imported from China.
A further breakup of yearly import data shows that electrical machinery and equipment is the largest category of products imported from China, comprising around 30% of Chinese imports in 2019-20. While calls for a reduction in Chinese imports in last few years has caused their imports to fall in the last two years, certain items like lithium ion that is used in batteries in mobile phones and other portable electronic devices has seen an increase of over 100% in imports in the last two years. The import data also shows that India purchases over 80 % of its lithium ion requirements from China.
Given the increasing use of mobile devices and portable equipment in Indian households in the aftermath of the Covid-19 crisis, the imports of such products from China are going to increase unless Indian manufacturers find an alternative source.
The data indicates that the call for a complete ban on Chinese imports would cause a disruption of supplies and increase in their cost in the local market .