Amid ballooning India-China trade deficit, boycotting Chinese products seems tough

New Delhi: Amidst the ongoing border stand-off between India and China, the boycott Chinese goods movement appears to have bitten off more than it can chew.

Bilateral trade between China and India is worth Rs 6 lakh crores, out of which India’s exports share is Rs 1.17 lakh crores, while the country imports goods and services worth Rs 4.9 lakh crores from China.

In 2014, investment by Chinese companies in India stood at Rs 12 thousand crore which has now grown five times to Rs 60,000 crore. This is the official estimate, however, China also invests in several private sectors in India via a third country participation. For instance, a Chinese mobile manufacturing company has invested Rs 3500 crore in India via a subsidiary company in Singapore. As per some estimates, the investment of Chinese companies in India is Rs 2 lakh crore. China has invested a huge amount in Indian Start-ups in the last two years.

In 2019, Chinese investment in the Indian Start-ups has risen 94 percent. In 2018, China invested Rs 15,000 crores in India which rose to 29,000 crore in 2019. Out of the 30 big Start-ups in India, almost 18 Start-ups have got Chinese investment. Infact China is one of the most active investors in India’s Start-up companies. China has made major investments in over 75 Indian companies that work in the field of e-commerce, financial technology, media, social media, aggregation services and logistics.

OLA, Hike, Big Basket, Byju, Delhivery, Dream 11, Hike, Oyo, Paytm, Snapdeal and Zomato are some of the big and renowned companies where Chinese investors have invested upto Rs 4,000 crores.

Some Chinese products have made such headway into the Indian society that has come to challenge the existing competitors. For example, the Chinese short video making app TikTok has even left behind Google and YouTube in terms of user preference. Out of 45 crore smartphone users in Indai, 66 percent people use at least 1 Chinese app

The market size of smartphone in India is Rs 2 lakh crore, out of which Chinese mobile phone brands like OPPO and Xiaomi have captured 72 percent of the mobile telephony market share. This holds true for many other electronics sector –telecom equipment whose market size is Rs 12,000 crore out of which share of Chinese products is 25 percent

The share of Chinese products in the Rs 25,000 crore Television Market is about 42-45 percent in Smart TVs and 7-9 percent in Non-smart TVs. Similarly in The Rs 50,000 crore Home Appliances section, share of Chinese products range between 10-12 percent.

The Auto Components have a market size of Rs 43.1 lakh crore, out of which share of Chinese products is 26 percent. Chinese products have 90 percent share in India’s 37,916 MW Solar Power market. In the 108.5 MT steel market size, share of Chinese products ranges between 18-20 percent. In the Pharma/API which has a market size of Rs 1.5 lakh crore, Chinese products has a 60 percent share.

Considering the penetration of Chinese products in India and the ballooning India-China trade deficit, boycotting Chinese products seems a tough thing. Moreover, the world around is gradually coming out of the lockdown phase and getting back to start business. China too will look forward to supplying its raw materials worldwide. This actually gives a business opportunity for Indian suppliers.

(Compiled by Zee Research Group)