Angry Indians Want to Boycott All Chinese Products. Here’s Why They Probably Can’t

Not only does India import seven times more from China than it exports to it, it’s also heavily dependent on Chinese herbs to make medicines.
June 19, 2020, 12:02pm
Angry Indians Want to Boycott All Chinese Products
Indians shout slogans as they gather around a flag displaying the country and flag of China along with an inscription reading 'Boycott Made in China' before burning them during an anti-China demonstration in Kolkata on Juane 18, 2020. Photo courtesy of Dibyangshu Sarkar / Getty

Following a face-off in the Galwan Valley region between India and China that killed 20 Indian soldiers, there has been a surge in emotionally-charged demands in India for a total boycott of Chinese products.

A video of angry Indians throwing a television they believe was made in China from a balcony before smashing it to smithereens is going viral.

Members of the Resident Welfare Association (RWA) in Delhi’s affluent Defence Colony locality, flouted social distancing norms to burn effigies of the Chinese premier Xi Jinping, as they declared “war against China.”

The hashtag #BoycottChina has been trending on Twitter, with some Indians even making Winnie The Pooh trend to taunt China, which banned the cartoon for allegedly resembling the Chinese president. Ramdas Athawale, a minister in the Government of India who coined the chant “Go Corona Go” at a protest against the novel coronavirus, said that Chinese restaurants should be banned in India. These restaurants are usually Indian-owned.

However, India’s extensive - and unequal - trade relationship with China means such a boycott may be too simplistic to implement.

India imports about seven times more from China than they export to it, with an estimated $70.3 billion going towards imports and $16.7 billion for exports in 2018-19.

Between 2017 to 2018, almost 60 percent of India’s requirements for electronic equipment were provided by China. Four Chinese brands, namely Xiaomi, Vivo, Realme and Oppo, are the top five best selling mobile phones in India and dominate over 60% of the smartphone market in India.

While some news channels in India were holding debates pushing for a ban on Chinese-manufactured products, banners on-screen announced that these debates were sponsored by Chinese phone companies.

“A boycott is an emotional cause that only works if we have alternatives in place, and the fact of the matter is that India has a deficit because it doesn’t produce the kind of goods it needs,” Jabin T Jacob, an international relations and governance studies professor at India’s Shiv Nadar University, who has extensively researched the India’s China-oriented policies, told VICE News.

The Global Times, a daily tabloid newspaper controlled by China’s Communist Party, took cognisance of India’s right-wing Rashtriya Swayamsevak Sangh (RSS) affiliate organisation Swadeshi Jagran Manch’s call for a boycott. In response, it said “While assessing the new tensions at the border, India should understand that China's restraint is not weak. The two nations should cherish their precious development opportunities and maintain good bilateral ties.” The article also hinted that it would be “extremely dangerous” and lead to escalating tensions if India allowed anti-China groups to stoke public opinion.

Thirty percent of India’s automobile parts come from China, while Chinese-made toys account for 90 percent of the country’s toy market.

Chinese companies have invested big in hundreds of Indian startups. China’s Alibaba owns a majority stake of India’s largest digital payment app PayTM. It has also invested in e-commerce companies including Snapdeal and food delivery app Zomato.

Tencent holdings has nearly 10 percent of the stake in India’s cab operation service Ola, along with equity investments in e-commerce website Flipkart, online education service Byju’s, medical directory Practo, food delivery app Swiggy and music streaming service Gaana.

“It speaks poorly of our own planning that we allowed China to take over the technology sector,” said Jacob. The scholar believes that the Indian government made a misstep by allowing Chinese companies to buy shares in private technology. He's also against the push for disinvestment in public sector companies that can instead be strategically used to India's advantage, such as the ONGC oil drill in the South China sea.

In April, the Indian government tightened foreign direct investment (FDI) policy for countries it shares a border with, which was seen as a move to rein in China.

Soon after the Galwan valley face-off, India’s Department of Telecommunications (DoT) has moved to ensure that the state-run network service Bharat Sanchar Nigam (BSNL) will upgrade its network without involving any Chinese telecom companies.

It has also terminated an INR 5 billion contract with the China Railway Signal and Communication (CRSC) Corporation to set up signalling systems for over 400 km of railway lines in India.

Indian intelligence agencies, backed by the National Security Council Secretariat, also recommended a list of 52 Chinese apps to block or ban in India.

However, there seems to have been no real impact on the sale of Chinese-manufactured mobile phones in the last few days. Chinese car firm Great Wall Motors signed a memorandum of understanding with India’s Maharashtra government to set up a production facility in the state on the same day the news of the fatal clashes broke in India.

Perhaps the most urgent requirement of Chinese products comes as India combats its rising peak of coronavirus cases. India’s drug manufacturers rely on China to provide 70 percent of the raw materials. This includes drugs like dexamethasone, that have proven to be effective against COVID-19 .

A study of conflicts in the 1990s by economists at Sorbonne University in 2008 concluded that while a liberal approach to trade doesn’t automatically prevent war, the risk of conflict increases when countries grow less economically dependent on each other.

However, Jacob argues otherwise. “It’s a historical fallacy that better economic relations create better political relations. This only happens in the case of like-minded democracies, but not when core ideologies are so different. Jacob explains that while the initial years of the India-China relationship were beneficial for expansion because we were making a surplus, we have now fallen into a deficit.

“China had actively blocked India from entering sectors like pharmaceuticals, until they wanted to reduce their own public health insurance costs,” Jacob points out. He adds that India too should have leveraged the relationship to its advantage and not allowed China to gain power in key sectors. “But I don’t believe that economic cooperation should be held hostage for better political relations.”

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This article originally appeared on VICE IN.