India Government could ban more than 200 other applications in country. Last month, the Indian government banned 59 Chinese apps in India, after that they are planning to banned other 250 also because of users privacy and national security violations. This includes PUBG, zili, allibaba express,Capcut, FaceU, Meitu, LBE Tech, Perfect Corp, Sina Corp, Netease Games and other 250 apps. As per the report these apps are included in the activities that were “prejudicial to sovereignty and integrity of India, defense of India, the security of the state and public order.” Report said, government will follow a proper procedure before such bans, then likely to act on it soon.
The current relations of India and China are not hidden from anybody. It is very clear that both the countries are having disputes at the border. There was a fight between the soldiers of both the both the country and soldiers from both the nation lost their lives. The Indian government also banned 69 Chinese applications including Tiktok, Cam Scanner, ShareIt and many more, because of safety reasons. The demand of ban on Chinese products and making India self sufficient is rising more, after our lost their lives at the India-China border. But the actual question is , can India actually surpass China in growth? This seems to be a very a strenuous task , as the dominance of China over Indian market is not something which can be ignored.
The main reason behind the growth fatigue in China according to the Boston Consultancy Group (BCG) is that the cost of production in China is now the same as that in US. An increase in wages, shifting exchange rates and higher energy cost in the past 10 years resulted in manufacturing stress in China. On the contrary, labour cost is still much lower in India.However apart from the cost difference there are many more challenges which India need to tackle if it wants to exceed China. The first challenge for India is to create a friendly business environment. A culture of entrepreneurship needs to be developed. Secondly the Labour laws in India are very obsolete in nature, a big reform in the whole concept is required to usher the second generation reforms lead by the reforms in labour sector. The macro-economic stability is another thing which designs the path of the future growth of a country. The Chinese economy is controlled by government with exchange rates, interest rates etc. Although it may provide stability but also apply pressure on the controlling authorities. The Indian government needs to keep the financial rights by keeping a tab on inflation, exchange rate etc. The another factor which our government need to focus upon is the Investment on Human Resource. The number of unskilled labors in our country is quite high, whereas the it is never a problem for China because they have invested enough in their Human Resource.The Indian government should provide skills to its vast labour force. The last but not the least factor which I will be discussing here is sufficient energy. For a firm, continuous supply of power and electricity is must so that they can continue their production without any hindrance.
Thus, there is no doubt that exceeding China in terms of growth is an impossible task for India, but for this the government needs to lay down the platform for the economy to take off and address the aforesaid challenges.
India’s trade deficit with China sinks to $48.66 billion in 2019-2020 which is lowest in five years. Now what is the trade deficit? Trade deficit can be defined as an amount of imports of a particular country exceeding the amount of its exports. According to the data, exports to China in the last financial year stood at $16.6 billion, while imports accumulated at $65.26 billion. India and China are two very well-known countries with ancientCivilizations, their partnership in every major field like trades has made an ideal example since over 2000 years. But from the last few weeks the India- China relation has deteriorated. The main cause of the clash was a dispute over the sovereignty of the widely separated Aksai Chin and Arunachal Pradesh border regions. So, it can be assumed that this clash played a vital role along with lower imports and higher exports as the major cause of India’s significant reduction of trade deficit.
The major imports from China cover electronic gadgets (clocks, watches, smart phones, calculator, laptop etc.) plastic materials (toys, plastic containers, bottles), sports goods, musical instruments, furniture, chemicals, irons, mineral source, metals and fertilizers.
Foreign Direct Investment (FDI) from China in India fell to $163.78 billion in 2019-2020 from $229 billion in previous monetary, the data said. 14% India’s imports are recorded by China and the major portion comes from critical pharma ingredients and telecom.
India was able to captivate FDI worth $2.38 billion from 2000 to March 2020 but in April the government has narrowed the standards for FDI coming from the neighboring countries especially which share a land border with India like China. As per FDI, any company or individual can steep in any field with the government approval.
Top sectors like metallurgical (USD 199.28 million), services (USD 170.18 million), electrical equipment (USD 185.33 million) which showed maximum FDI from China in the period of April 2000- March 2020.
Around 371 products have been identified for technical regulations. Out of 371, technical regulations have been assigned for 150 products worth $47 billion of imports.
The reduced imports from China also helped the U.S. extend its lead as India’s largest training partner against trade off $88.8 billion with US India straight with China was just $82 billion. 2019-2020 year’s trade deficit of India is almost similar to 2014-15, when the Narendra Modi took first post, but it was 34% higher than 2013-14, stimulating the government to suggest that the further steps taken in recent months have yielded results.
In that definite time when entire world has been put off financially due Corona virus pandemic accompaniedby India-China war; in the standing of that point taking such steps like restricting the imports from China would be a great decision for India.
The Country and countrymen both are hopeful, at the same, of time what lies ahead in future.
“A large chunk of these originate from China. We will pursue import substitution,” a senior official said.
When the border stand-off with China deepens, India will need to think of all potential diplomatic solutions in this crisis that will lend it leverage. New arrangements with a variety of foreign powers is one such factor which is often discussed in this sense. Most military analysts salivate at the possibility of an ever stronger coalition with the United States.
It is a good moment for mobilizing public sentiment on China. As China under Xi Jinping regime has seen an unprecedented degree of global alienation. But can that be translated into concerted global action to bring real pressure to bear on China? India should pursue every avenue possible. Yet we would always have a thorough understanding of the limits of what can be achieved for India through new partnerships or agreements.
It’s important to remember that in the context of the development paradigm of a country , international relations are formed. India’s primary goal, if it can possibly articulate one, would be to maintain the optimum space for its growth model. In that way, India isn’t special. The alliance between the US and China may have arisen in the diplomatic effort to establish a break between the Sino-Soviets. But for decades this relationship was sustained not by a strategic logic, but by the logic of the developmental political economy in both the US and China, where they depended on each other reciprocally.
The technology model ‘s diplomatic prestige waned, and it is this fact that will be essentially the catalyst of the relationship between the US and China. The question for India is not just whether the US has any stake in the development of India, which it could have. Yet it is more a matter of how India’s infrastructure needs can fit into the evolving model of US growth. Will the very powers of the political economy which establish a disengagement with China also come in the way of closer relations with India? Some sections of American big business could be batting for India; but the underlying dynamics of the political economy are less favorable.
Would the US grant India the space it wants for commerce, intellectual property, legislation, agriculture, labour mobility, the very domains where democracy is essential to the economy of India? Can an American hell-bent on getting industrial jobs back to the U.S., comfortably fit with a Bharat “atma nirbhar?” To see what’s at stake, we need only look at how friction over the development paradigm drives tensions between the US and the EU on trade, taxation and regulatory issues.
There is sometimes a complaint in the US about India being invited but refusing enthusiastically to come to table. Given the salutary cultural and political impetus in this relationship there is some reality to this. Yet the causes of this, including climate change, have also been genuine disagreements in growth. It was also that this question was antithetical to the other strategic commitments of India at various points. India was wise to stay out of the Iraq war, it was wise not to completely spurn Russia, and it is wise not to throw its weight behind the US policy on Iran.
There’s more wisdom in the US to comprehend the role of India. But there is a section of India ‘s strategic community that sees India ‘s reluctance to go in with the U.S., hook line and sinker, as a sort of ideological wimpiness, not a sign of deeper-thought-out realism that it was.
It is a strange moment in global affairs, where a common challenge emanating from China is recognised, but there is no global appetite for concerted action. The global response to the BRI could be an interesting example. Many countries struggle to meet their debt obligations to the BRI. Most loans from China have been a millstone around the necks of the debtor countries. But it’s hard to see the rest of the international community help all these countries wean their regimes away from Chinese finance dependence. Similarly, there are now considerable concerns about frontier conflict areas such as cyber security and space.
India is considering multiple, comprehensive measures to curtail China’s economic dependence on the country, targeting trade , investment, and project services in the wake of hostilities at the border. These are expected to include limits on Chinese firms’ involvement in government contracts and infrastructure programs, higher tariffs on imported Chinese finished goods as well as closer review of free trade arrangements that the country uses to indirectly export goods to India.
According to Economic times, a high-level meeting, likely to be attended by key stakeholder ministers and top officials from the Prime Minister’s Office (PMO), is expected soon to discuss the details and the extent of measures.
“Measures are being examined… All pros and cons of how and when as also their repercussions on Indian businesses will be looked into,” said a government official.
On the trade side, tariff as well as non-tariff measures could be put in place to discourage China’s imports which added up to $70 billion in FY19, which was more than any other country. In FY19, India had a trade deficit of $53 billion with China, and attempts to address it have made little progress. Chinese firms have a significant portion of the cell phone and electronics industries in India. The government should take steps to curtail Chinese imports while at the same time creating an atmosphere for domestic production of these goods.
India will also review its free trade arrangements with other countries to determine whether China is using them to enter the local market. India has already left the Regional Comprehensive Economic Partnership (RCEP) negotiations, which includes China among others, on the grounds that there is no safeguard against a further increase in exports to India from that country. In addition, stringent quality standards and controls could be introduced to contain the country’s goods inflow.
Various options are being examined by the law ministry on the exact contours of the clause to ensure it cannot be challenged and meets international norms. The omnibus clause could cover all countries, the official said, though it is primarily aimed at Chinese companies.
One of the first sectors to introduce the clause could be roads and highways before it is expanded to others and eventually includes public sector units, said the officials. The ministries of road transport and highways and law are already in discussions to finalise the wording of the new clause, one official said.
The government has sought to cancel and rework contracts with state-owned telecommunications firms Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) to keep Chinese vendors out of security issues. Additional criteria could be introduced to ensure Indian suppliers of goods and services secure contracts awarded by the government as well as public sector entities. The Ministry of Law is examining the feasibility of introducing such a clause examining the feasibility of introducing such a clause in contracts in accordance with restrictions or strict conditions imposed by some other countries on Indian firms from contracting.
“These stiff criteria essentially are barriers to ensure that only local companies can participate,” the official said, adding that such restrictions imposed by other countries are also being examined in detail.
The exercise was already underway as part of the Atmanirbhar government’s mission, or self-reliance, and gained importance following changed border circumstances, he said. The cabinet secretary, who also chairs a committee to boost local manufacturing, has had discussions with various ministries dealing with infrastructure projects on how to boost local sourcing of both goods and services.
The lowest bidder is generally accorded prior security clearance but there’s a growing view that a more stringent framework is needed, said the official cited above.
Some bids in which Chinese companies were roped in as partners by an Indian company in the roads sector have been cancelled recently, including one in Nagpur. The government has already reserved supply contracts of up to ₹200 crore for local producers. The government is likely to revisit these criteria to ensure wider participation by domestic companies, another official said.