Boycott China manifests! Chinese exports to India crash 25% in 2020; trade down 19%

As voices calling for 'Boycott China' grow stronger, Government of China's customs data shows that mainland China's exports to India since January 2020 have fallen 24.7 per cent year-on-year to $32.28 billion. Interestingly, mainland China's imports from India have gone up 6.7 per cent since January this year to $11.09 billion. As a result, total trade (imports and exports) with India has registered a slightly lower 18.6 per cent drop since the beginning of 2020 to at $43.47 billion.

In July, however, China's exports have seen a slight jump to $5.6 billion, up from $4.79 billion in June, 2020.

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Since hostilities broke out between India and China in Galwan Valley in May, New Delhi has been working on policies to scrutinise and stymie influx of Chinese goods into the country. The Directorate General of Foreign Trade (DGFT) announced restrictions on import of colour television sets late in July to encourage local manufacturing. In financial years 2019-20, India had imported television sets worth $300 million from China and $400 million from Vietnam. The total value of imported TV sets during last fiscal stood at $781 million.

India is also considering measures to prevent trade partners, mainly in Southeast Asia, from re-routing Chinese goods to India with little added value, according to a Reuters report. This move will mainly target imports of base metals, electronic components for laptops and mobile phones, furniture, leather goods, toys, rubber, textiles, air conditioners and televisions, among other items.

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On the other hand, Chinese smartphones' share in Indian marked fell to 72 per cent during the June quarter 2020 from 81 per cent in March quarter 2020. Xiaomi, which remains a market leader in India, is working on a new version of MIUI that will omit its proprietary applications banned by the Government of India.

The government is also planning to impose licensing requirements for import of goods from 20 sectors, including furniture, toys, sports goods, textiles, air conditioners, leather, footwear, agro-chemicals, CCTVs, ready-to-eat food, steel, aluminium, electric vehicles, auto components, TV set-top boxes, ethanol, copper and bio fuels, to boost local manufacturing of these items.

Reports suggest that India is also looking to hike customs duty on imported active pharmaceutical ingredients (APIs) by 10-15 per cent. Indian pharmaceutical industry depends heavily on imports from China, with 68 per cent APIs and more than 90 per cent antibiotics being sourced from the neighbouring nation.

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