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In Punjab’s industrial hub, manufacturers say campaign to boycott Chinese goods needs government support

When imports are open and Chinese goods are cheaper, industry cannot compete with them.

Written by Raakhi Jagga | Ludhiana | Published: June 19, 2020 1:47:40 pm
china boycott, chinese products, chinese import,china import, india china trade In Punjab’s industrial hub, Ludhiana, manufacturers said that for the campaign to really have an impact it needed serious policy intervention from the government.

As calls to boycott Chinese products gets shriller by the day on social media, a closer look at trade data reveals that Chinese imports to India have been increasing every year since 2015-16. In Punjab’s industrial hub, Ludhiana, manufacturers said that for the campaign to really have an impact it needed serious policy intervention from the government.

SC Ralhan, president of Federation of Indian Export Organisations (FIEO) said, “In year 2015-16, our imports from China were USD 58 billion which increased to USD 59.43 billion in 2016-17 and further to USD 68.10 billion in 2017-18. The figure kept on growing as it was USD 76.87 billion in 2018-19. This includes chemicals, yarns, electrical goods, bicycle parts, toys, garments etc. Therefore, boycotting Chinese products will be successful only when our country’s government supports the local manufacturer by reducing taxes, increasing import duty on Chinese goods etc.”

Sources revealed that there is a lot of under invoicing too due to which importers pay less import duty. DS Chawla, president of United Cycles Parts and Manufacturers Association, said, “Why do people import from China? This question also needs to be answered — because manufacturing in India is costly and products even after importing from China are cheaper than what we make here. Hence, a mere campaign cannot serve the purpose. People are ready to manufacture, but the government also needs to support the manufacturing sector.”

Badish Jindal , All Industries and Trade Forum (AITF) national president, said,” India can manufacture everything.

However, when imports are open and Chinese goods are cheaper, industry cannot compete with them. China’s capital loans are given with rates of interest ranging of 0-2.5 per cent, while we get it ranging from 10-17 per cent rate of interest.

This loan is used to buy new machinery and hence we are not able to buy latest machinery that easily as Chinese can do and moreover, they make products in bulk and hence their cost reduces. They have labour laws of hire and fire and their clusters of different units are very successful. Hence, we need a long term stable policy which can encourage people to manufacture things within India.

For example, about 3 years back it was made compulsory to install 16 reflectors on bicycles to avoid accidents, hence few industries started manufacturing them in India, but at the same time, after sometime import of this product was allowed from China.

Now a reflector costs us in India in the range of Rs 25-40 compared to Rs 15-20 rupees if we import it from China. Hence, those units suffered heavy losses. Many units in Ludhiana have merely turned into trading units as they import Chinese cycle parts, assemble them and sell the cycle in the market with their brand. So, how will consumer judge whether he/she is buying made in India or Made in China brand. Hence, boycotting Chinese products is an emotional appeal but reality is different.

Ralhan said, “We have transaction tax ranging from 23-24 per cent for movement of goods within the country, which is huge and hence they need to be rationalised to 9 per cent.”

“There is technology to make toys as well in India but again, policies need to be favorable,” said Jindal. He added that a large part imported goods consists of raw material which are not even purchased by consumer directly from market.

“We need to practically boycott Chinese goods and not just by running a social media campaign,” he said.

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