By Prof. Vivek Singh
Tensions between India and China is steadily increasing on Ladakh border. India has treated well China from the Galwan Valley to the Pangong Lake. Along with the banning of apps by the Indian government, warships have been deployed on the South China Sea. The Indian government is trying to clamp down on China at the political, diplomatic and economic level. Fear of China and its official mouthpiece Global Times can be easily understood.
India is paying more attention to the development of the northeastern states which is hurting China. China has been successful in attracting India’s friendly neighbors Sri Lanka, Myanmar and Nepal by providing financial help. Indian government will have to think in this direction and must provide more financial support to these countries. Almost all major countries in the world blame China for the Covid19. India should have taken advantage of this but our neutral foreign policy missed this opportunity.
Today, World is troubled by the expansionist destructive policy of China. All its neighbouring countries are upset. On the contrary India is the only nation in the world which has never had an expansionist tendency. From land to mountains and from rivers to the sea, China is making false claim with its neighbouring countries in order to expand its territory. Excessive expansionism invites destruction. This is the reason that today almost all the countries of the world stand in favor of India and there are only few countries like Pakistan along with China.
In order to counter threat posed by mobile Applications on sovereignty and security of country 59 mobile Apps of China were banned by the Indian government in June including TIKTOK. TIKTOK alone had 200 million users in India. This digital strike caused the app’s owner ByteDance to suffer losses of up to $6 billion. In July, the Indian government banned 47 more Chinese apps. On September 2, 2020 the Government of India once again banned 118 apps.
India’s foreign trade balance has been negative since independence. We have the same situation with China. India imports more than exports. Tension on LAC with China is providing opportunity and energy to India. India must focus on indigenization, Make in India and Start up India. People of India have more trust on goods manufactured by domestic companies.
In the era of globalization imports from any country cannot be stopped because India is a member of various international trade institutions, agreements and groups. Restriction on Chinese imports won’t serve the purpose. We can definitely inspire our people to buy the goods manufactured in the country. Without imposing any economic restrictions India can easily boycott Chinese goods.
Even in the event of economic sanctions China will suffer more than India. India’s exports to China was $16.7 billion in 2018-19 while India’s imports was $70.3 billion from China. India suffered a trade deficit of $53.6 billion in the year 2018-19. In 2019-20 India’s exports to China was of $16.6 billion while China’s exports to India was $65.2 billion which led to a trade deficit of $48.6 billion in the year 2019-20. India’s trade deficit with China was only $1.1 billion in 2004 which increased to $53.6 billion in 2018-19. It will be better for India to promote its international trade with other countries.
As far as China’s investment is concerned, in 2014 inflow of Chinese investment towards India was of $1.6 billion which reached upto $26 billion by the beginning of year 2020. Some start up companies such as Paytm, Flipkart, Swiggy, Ola, Gaana received Chinese investment. India can explore investment opportunities from other friendly countries. Today India has forex reserves of more than $538 billion which is enough to pay for 18 months of Indian imports. China is not a profitable market for India. India accounts for about 5% of its total exports to China while 14% of its total imports are from China. India is market of 135 crore people. It is impossible for China to find such a market. There will be economic loss to China only.
India should isolate China from the world at the diplomatic level. India’s strategic capability has increased with the arrival of Tejas aircraft. The country should also not hesitate to impose direct economic sanctions on China. India should focus more on the development of the northeastern regions of the country. India should provide more financial aid to neighbouring countries so that they do not get caught in by China. There is need to change our foreign policy with China. India is the largest market for China. With indigenization China can be made economically weak. We can also weaken China economically by focusing on Make in India, Make for World, Vocal for Local, MSME, and Start Up India.
(The author is columnist, professor of Commerce, Political and Economic Analyst. He can be reached at viveksinghmumbai@gmail.com)
