The government has declared the ban of 59 Chinese apps in the wake of the recent conflict between the two nations. Do you know how this decision will affect the two countries? Read on to find out.
China is India’s biggest trading partner after the U.S, accounting for about 14% of India’s imports. It is Asia’s largest economy and the world’s second-largest with a GDP of about $13.6 trillion, while India follows closely at No. 3 in Asia at $2.7 trillion.
According to the Embassy of India, more than 100 Chinese companies have established offices/operations in India. Many infrastructures and machinery companies like China Dongfang International, Sino Hydro Corporation, Sany Heavy Industry Ltd, Chongqing Lifan Industry Ltd, Baoshan Iron & Steel Ltd, Sino Steel, Shougang International, etc, have managed to win projects in India. Many Chinese electronic, IT, and hardware manufacturing companies including Huawei Technologies, ZTE, TCL, Haier, etc, also have operations in India. Companies from China involved in the Power Sector in EPC projects are large in number. These include Shanghai Electric, Harbin Electric, Dongfang Electric and Shenyang Electric, among others.
On the other hand, Adani Global Ltd., Dr Reddy's Laboratories Ltd., Jindal Steel & Power Ltd., BEML Ltd, Bharat Heavy Electricals Ltd., Godrej & Boyce Manufacturing Co. and Aurobinda Pharma Ltd. are some of the Indian firms present in China.
It is evident that India and China have been closely involved in the trade. But why apps? What sort of impact do Chinese apps have on us?
Well, research firm Sensor Tower estimates that the 59 banned apps have accumulated 4.9 billion (490 Crore) downloads from Apple Inc.’s India App Store and Alphabet Inc.’s Google Play since January 2014, including 750 million (75 Crore) so far this year! What's more, Of the top 25 most downloaded apps on India’s App Store and Google Play since April, eight were from Chinese publishers. The pattern shows that Chinese apps are preferred by Indian users over their Indian counterparts. At the same time, while there are a few exceptions which are better and more popular than the Chinese apps, they too have investments (in millions) from the Chinese companies, for example, the companies like, Big basket, Byju’s, Paytm, Dream11, Flipkart, Make My Trip, Ola, Oyo, Snapdeal, Swiggy and Zomato. However, some of the investments are still not on paper because the Chinese companies invest through their offices located in other countries like Singapore, Hong Kong, Japan, Mauritius, etc. For example, Alibaba Group’s investment in Paytm came via Alibaba Singapore Holdings Pvt. As of March 2020, 18 of India’s 30 unicorns are Chinese-funded. This reflects that China's investment is not in the little Indian-Chinese food joint at the corner of your street, rather it goes unnoticed behind corporate giants.
Taking all of this into account, is a trade war feasible? An important thing to note here is that India already has a huge trade deficit with China if due to this trade war China decides to ban the Indian companies established in China, it might give a huge blow to the Indian foreign exchange which would be very difficult for India to recover from.
Exports made by India to China in the FY 19-20 were 179,766.72 Crs, and the imports made are 550,784.66 Crs. Chinese exports to India comprise electrical appliances, smartphones, iron and steel products, power, metro rail coaches, plant inputs, finished steel products, fertilizers, auto components, capital goods like power plants, chemicals and plastics, telecom equipment, pharmaceutical ingredients, and engineering goods, among other things, according to the Ministry of Commerce. India imports two-thirds of its active pharmaceutical ingredients, or key ingredients of drugs, from China. This indicates that we are more dependent on Chinese products than they are on us. Waging a trade war with China is equal to a tremendous fall in our economic growth, in layman’s terms, this would eventually increase the daily expenses or reduce the personal income in general; people must be prepared for paying a higher amount for getting the same products and services which were priced less earlier.
Most of the people from lower-level income groups have Chinese electronic products including television, mobile phones, laptops etc, because of the sole reason, affordability.
Though, Chinese products are trolled over the internet for their quality; they have proved to stand higher than many Indian products. The goal of being self-reliant is desirable but the cost of the country suffering as a whole would be much higher.
So what should be done?
Rather than boycotting the products, what we need right now is for the Indian startups and IT companies to pull up their socks and deliver the apps, products, and services better in terms of quality and quantity and cheaper in terms of the Chinese companies. The government could increase its investment in this sector to boost it up and bring it to a level where it could surpass the competition of Chinese companies. Only if the Indian products are up to the standards with a reasonable price in the market will we be in a situation where China does not have so much power over our market.
Written by- Hitanshu Raulji
Edited by- Ushma Doshi and Roshni Lakhani
Commentaires