What Does Boycott China Mean for the poor in India?

Throughout May, the situation between India and China at their border. In June, 20 Indian soldiers were killed in a clash at the Galwan valley which led to an escalation in tensions between the two economic and military powerhouses. This sparked anger among the Indians and many, including politicians called for a boycott of Chinese Imports. However, what is not known is if India can live without Chinese goods.

China is India’s largest trading partner and India runs a trade deficit with China, which means the value of goods imported from China is more than the goods exported from India to China.

The problem with boycotting Chinese goods is that the goods imported from China are to a large extent goods which are cheap but to an extent quality goods, such as mobile phones. Although goods from European and American competitors tend to be better than the Chinese, they are expensive and only a small proportion of Indians can afford them. Therefore, those who are rich are less likely to use goods from Chinese firms or goods that are directly imported from China.

This leaves us with the Indians who are not so well of and use Chinese goods because of their affordability. These consumers of Chinese goods can shift to other Indian or even cheaper goods from abroad, but the drawback for this is that the goods provided by Chinese firms are more efficient in the lower and mid price ranges which attracts consumers. Therefore, boycotting Chinese goods cannot be viable for the Indians since they would have to compromise on the quality of goods to match their budget.

The boycotting of goods is not plausible now, but looking at India’s dependence on China, it would be fair to say that only if we start today can we make sure that in the coming years we can come to an equal footing with China in terms of trade. To achieve this India will have to increase its production capacity and focus on the manufacturing sector. A lot of investment will have to be made in infrastructure and training of labourers which will allow India to get rid of the Chinese imports. However, for now it is only sensible to let trade continue and going forward focus on substituting these goods with those made in India who can match the quality and price of the Chinese. If India moves to boycott these goods, it will only be at the price of the poor who are already suffering and this will only make their circumstances worse for them.

Keeping this in mind, it can also be viable to inform the people about Indian or other options and those who can afford quality goods from abroad or India should make the shift sooner or later. While the poor can catch up as India as an economy starts to produce such goods which can meet the demands of the poor.

Image Source - The Economic Times