<p>As per the reports coming from various quarters, sale of Chinese goods has gone down by 25-30% in the recent weeks. It is being said that traders who import goods from China have already suffered heavy losses. Traders also say that given public position about Chinese goods, they would rather not import Chinese goods, next time. <br /><br /></p>.<p>These reports say that this is the effect of campaign on social media such as WhatsApp, Facebook, Twitter etc, against the unjust stand of China of not allowing Masood Azhar to be declared an international terrorist by the United Nations and blocking of the Brahmaputra water against India. <br /><br />It’s notable that imports from China have been increasing in the last three decades and Chinese imports have increased from merely US$0.015 billion in 1987-88 to $61.7 billion in 2015-16. Since exports from India were hardly $9 billion in 2015-16, Chinese trade caused a deficit of nearly $52.7 billion in 2015-16. It may be noted that deficit from trade with China accounted for nearly 45% of the total trade deficit of India, that is, $118.3 billion.<br /><br />If we leave aside the exceptional period between 2000-01 and 2002-03 when India’s balance of payment turned positive, India has experienced increasing deficit in the balance of trade (BOT) and balance of payment (BOP) on current account. The country’s deficit in BOT reached $190 billion and current account deficit in the BOP at $88 billion in 2012-13. <br /><br />Though, in the recent years, due to declining oil prices, both trade deficit and balance of payments deficit have come down to $118.3 billion and $22 billion respectively, the country is yet not out of payment problems and the rupee is still under huge pressure. <br /><br />Our foreign debt, which was only $101 billion in 2001, reached $485.6 billion by 2016. Every year, the country has to shed a huge amount as interest on this debt, which further worsens our debt.<br /><br />Now, when some sections of people have boycotted the Chinese goods, even on the occasion of Diwali, the impact could be significant on imports from China. It is true that we import many intermediate goods and accessories, components and machinery, apart from finished goods. <br /><br />At present, the boycott is limited to the consumer goods, but if the same public sentiment continues, it is possible that the effect of boycott may be felt on the import of spare parts and machinery. The first effect will be on imports and the trade deficit. Today, when 40% of trade deficit is due to Chinese imports, a mere 20% reduction in Chinese imports may reduce our trade deficit by more than $12 billion. <br /><br />Lesser imports from China may boost production and employment in the country. If 20% of Chinese imports are replaced by domestic production, our production may increase by Rs 1,30,000 crores. Smaller trade and balance of payment deficit may reduce pressure on rupee. <br />Today, when our imports are nearing 20% of GDP, 10% improvement in rupee may lower our inflation by nearly 2%. Prices of petroleum products and host of other imported goods may be cheaper. <br /><br />Impact on China <br /><br />Critics may say that India is not a very important trade partner of China as Indian imports constitute hardly 3.4% of the total exports of China. Today, China’s exports total $1,845 bn, out of which India's imports from China are hardly $61.7 bn. <br /><br />However, we shouldn’t forget that at one point of time China’s trade surplus had reached $627.5 bn, which has now come down to meagre $419.7 bn. The Indian trade provides more than 12% of trade surplus of China. <br /><br />Therefore, if Indian imports from China come down by even 20%, impact on China would be significant. Experts believe that declining exports from China is putting pressure on Chinese yuan. It is notable that Chinese yuan has reached the weakest level in the past six years.<br /><br />We witness an unprecedented feeling among the people of independent India with respect to boycott of Chinese goods: as people, we have never shown such feelings against imports from any country except during the war for independence, namely ‘swadeshi movement.’ <br /><br />There is almost unanimity on this issue in the country, except for lone voices opposing this, as they argue that this may impact India-China relations. But this is also a fact that the way official Chinese media is reacting to this boycott, even terming it as 'barking dogs', it seems that the same has started impacting China. <br /><br />This boycott call may dither other countries also, which see India only as a market and continue to hurt our national and strategic interests at international fora and otherwise. <br /><em><br />(The writer is Associate Professor, PGDAV College, University of Delhi)</em></p>
<p>As per the reports coming from various quarters, sale of Chinese goods has gone down by 25-30% in the recent weeks. It is being said that traders who import goods from China have already suffered heavy losses. Traders also say that given public position about Chinese goods, they would rather not import Chinese goods, next time. <br /><br /></p>.<p>These reports say that this is the effect of campaign on social media such as WhatsApp, Facebook, Twitter etc, against the unjust stand of China of not allowing Masood Azhar to be declared an international terrorist by the United Nations and blocking of the Brahmaputra water against India. <br /><br />It’s notable that imports from China have been increasing in the last three decades and Chinese imports have increased from merely US$0.015 billion in 1987-88 to $61.7 billion in 2015-16. Since exports from India were hardly $9 billion in 2015-16, Chinese trade caused a deficit of nearly $52.7 billion in 2015-16. It may be noted that deficit from trade with China accounted for nearly 45% of the total trade deficit of India, that is, $118.3 billion.<br /><br />If we leave aside the exceptional period between 2000-01 and 2002-03 when India’s balance of payment turned positive, India has experienced increasing deficit in the balance of trade (BOT) and balance of payment (BOP) on current account. The country’s deficit in BOT reached $190 billion and current account deficit in the BOP at $88 billion in 2012-13. <br /><br />Though, in the recent years, due to declining oil prices, both trade deficit and balance of payments deficit have come down to $118.3 billion and $22 billion respectively, the country is yet not out of payment problems and the rupee is still under huge pressure. <br /><br />Our foreign debt, which was only $101 billion in 2001, reached $485.6 billion by 2016. Every year, the country has to shed a huge amount as interest on this debt, which further worsens our debt.<br /><br />Now, when some sections of people have boycotted the Chinese goods, even on the occasion of Diwali, the impact could be significant on imports from China. It is true that we import many intermediate goods and accessories, components and machinery, apart from finished goods. <br /><br />At present, the boycott is limited to the consumer goods, but if the same public sentiment continues, it is possible that the effect of boycott may be felt on the import of spare parts and machinery. The first effect will be on imports and the trade deficit. Today, when 40% of trade deficit is due to Chinese imports, a mere 20% reduction in Chinese imports may reduce our trade deficit by more than $12 billion. <br /><br />Lesser imports from China may boost production and employment in the country. If 20% of Chinese imports are replaced by domestic production, our production may increase by Rs 1,30,000 crores. Smaller trade and balance of payment deficit may reduce pressure on rupee. <br />Today, when our imports are nearing 20% of GDP, 10% improvement in rupee may lower our inflation by nearly 2%. Prices of petroleum products and host of other imported goods may be cheaper. <br /><br />Impact on China <br /><br />Critics may say that India is not a very important trade partner of China as Indian imports constitute hardly 3.4% of the total exports of China. Today, China’s exports total $1,845 bn, out of which India's imports from China are hardly $61.7 bn. <br /><br />However, we shouldn’t forget that at one point of time China’s trade surplus had reached $627.5 bn, which has now come down to meagre $419.7 bn. The Indian trade provides more than 12% of trade surplus of China. <br /><br />Therefore, if Indian imports from China come down by even 20%, impact on China would be significant. Experts believe that declining exports from China is putting pressure on Chinese yuan. It is notable that Chinese yuan has reached the weakest level in the past six years.<br /><br />We witness an unprecedented feeling among the people of independent India with respect to boycott of Chinese goods: as people, we have never shown such feelings against imports from any country except during the war for independence, namely ‘swadeshi movement.’ <br /><br />There is almost unanimity on this issue in the country, except for lone voices opposing this, as they argue that this may impact India-China relations. But this is also a fact that the way official Chinese media is reacting to this boycott, even terming it as 'barking dogs', it seems that the same has started impacting China. <br /><br />This boycott call may dither other countries also, which see India only as a market and continue to hurt our national and strategic interests at international fora and otherwise. <br /><em><br />(The writer is Associate Professor, PGDAV College, University of Delhi)</em></p>
