External Affairs

Goods Boycott Will Hurt Indians More Than Chinese, Says China

Some shopkeepers have complained of at least a 20% drop in pre-Diwali sales. Credit: Reuters/Rupak De Chowdhuri

Some shopkeepers have complained of at least a 20% drop in pre-Diwali sales. Credit: Reuters/Rupak De Chowdhuri

New Delhi: Breaking its silence on the matter, China on Thursday said that the social media campaign to boycott Chinese goods will not only hurt Indian traders and consumers, but also “negatively affect” bilateral relations, including Chinese investment.

Chinese embassy spokesperson Xie Liyan referred to media reports that Sadar Bazar shopkeepers had complained of at least a 20% drop in pre-Diwali sales.

She pointed out that China is the world’s largest exporter, with $2276.5 billion goods exported in 2015. The Indian portion of that is rather small.

“The exports to India accounted for only 2% of China’s total exports, India’s boycott of Chinese goods will not have much impact on China’s exports,” said Xie.

Rather, she asserted that China is “more concerned that the boycott will negatively affect Chinese enterprises to invest in India and the bilateral cooperation, which both Chinese and Indian people are not willing to see”.

She noted that the “boycott effect” will not be limited to Diwali-related products, but extend to other Chinese products not related to the festival.

“In the long run, the boycott will not only hurt Chinese goods sale but also cause negative effects to consumers in India. Without proper substitutes, the biggest losers of the boycott of Chinese goods will be Indian traders and consumers,” she reiterated.

Chinese goods have also helped to keep prices low in the Indian market, thereby helping the Indian poor, she argued. “Chinese products not only lowered India’s inflation rate but also fulfilled Indian ordinary people’s, especially the low-income people’s, daily needs and greatly improved their life quality,” added Xie.

The Indian government has been batting away questions about the Chinese goods boycott, asserting that there is nothing official about it.

The minister of state for commerce, Nirmala Sitharaman had said on October 14 that there is no mechanism to stop imports from just one specific country.

“A blanket ban on all imports from a country through a single instrument is impossible,” she said.

The Chinese embassy spokesperson also pointed out that in 2015, China had imported $2 billion worth of cotton and $100 billion worth of black tea which “bring benefits to 1.2 million cotton growers and 50000 tea farmers and sellers in India”.

She also claimed that China had a hand in the growth of Indian pharmaceutical industry, globally.

“Moreover, 60% to 70% of Indian APIs (Active Pharmaceutical Ingredients) for its pharmaceutical industry are from China. China has played an important role in Indian pharmaceutical industry’s march to EU and America market,” said Xie.

Incidentally, Indian Express reported on Wednesday that the prime minister’s office had instructed the Niti Ayog to produce a “comprehensive plan” to reduce dependence on China for APIs by manufacturing them in India.

India has been raising the issue of the widening trade deficit, which now stands at $52.68 billion 2015-16. One of the ways to narrow the gap has been to attract large Chinese investment, which includes setting up special manufacturing cities in Haryana and major infrastructure projects in western India.

The campaign on social media to boycott Chinese goods have been mainly led by BJP supporters, citing China’s backing for Pakistan, especially by putting on hold the listing of Jaish-e-Mohammed supremo Masood Azhar by the UN. The campaign has been endorsed by some BJP leaders.

However, BJP general secretary Kailash Vijaywargiya deleted a tweet with the hashtag ‘BoycottChina’, claiming that it was posted by mistake.

One of the biggest voices in favour of the campaign is Yoga guru Baba Ramdev, who now runs his own empire of consumer goods. He has repeatedly said that it is important to boycott Chinese products to teach China a “lesson” for supporting Pakistan.

Current Chinese FDI  in India is $1.24 billion, but Chinese President Xi Jinping had committed to investments worth $20 billion during his visit to India in 2014.