Can we ever keep China out of Indian industries?

Experts say while the increasing demand for a ban on Chinese goods might make for good optics, the reality is that India is still heavily dependent on that country in a wide range of industries like electronics, mobile devices, auto, pharma, telecom equipment, and fertilisers.

The “Made in India” tag on your smartphone hides one very important fact: There is a very large proportion of China within the device.

Import of mobile phone components (including printed circuit boards) during April-February FY20, according to government figures, hit $7.5 billion – of which 25 per cent was from the land of the dragon.

 

Hari Om Rai, chairman of Lava International, said: “Yes, we are vulnerable. Import content in our phones vary from 60-80 per cent. And China constitutes anything between 20 and 50 per cent of that.”

Experts say while the increasing demand for a ban on Chinese goods might make for good optics, the reality is that India is still heavily dependent on that country in a wide range of industries like electronics, mobile devices, auto, pharma, telecom equipment, and fertilisers.

Take auto for instance: India imports $17.6 billion worth of components annually, with China accounting for 25-27 per cent.

It also accounts for 30 per cent imports in the replacement market for auto components, where price is key.

Executives of the Automotive Component Manufacturers Association say China offers critical components at a competitive price, which makes it important in the supply chain.

A senior executive of an automaker said: “For instance, to move from BS-IV to BS-VI, one needs time to develop the technology.

“Till then, you go to China and get it. For EVs, the electronic component base is limited in India, so once again you go to China.

“If there is a sudden surge in demand for new components, for which your vendors require 18 months, you import them from China.”

Price competitiveness is key to China’s dominance. In a recent interview to Business Standard, S N Subrahmanyan, managing director & CEO of India’s largest engineering company, Larsen & Toubro said, “We go to the best and most efficient supply chain, and at the moment it is from China.

“If the Make in India campaign catches up and if there are Indian manufacturers who are efficient both in terms of pricing and technology, we will look at those sources.”

Other industries would agree.

For instance, the pharma industry is over-dependent on China for both active pharmaceutical…

Related posts

Add a Comment

Your email address will not be published. Required fields are marked *