India has used these measures to suppress Chinese companies

Release time:Apr 14, 2024 22:21 PM

The website of The Economist published an article on August 14th titled "Can Indian Companies Get rid of China?" The full text is excerpted as follows:

The current relationship between China and India is not the most friendly. The trade relationship between these two Asian giants has become tense. However, although the relationship is tense, it is still indispensable, especially for India.

Indian consumers rely on cheap Chinese goods, while Indian companies rely on Chinese investment, especially in some future industry sectors. India sells products from the "old economy" era to China - crustaceans such as shrimp and crabs, cotton, granite, etc., while China provides storage chips, integrated circuits, and pharmaceutical raw materials to India. As a result, bilateral trade is becoming increasingly unbalanced.

Indian Prime Minister Narendra Modi hopes to reduce this dependence on China. One reason is strategic - relying on a constantly changing opponent for key imports will bring risks. Another reason is commercial - Modi is trying to replicate China's growth model, which means grabbing some business from China. In recent months, his government has intensified efforts to decouple a portion of the Indian economy from this larger neighboring country. In early August, India announced new licensing restrictions on imported laptops and personal computers, mainly devices from China. Subsequently, there have been reports that India is considering similar measures for cameras, cameras, and printers.

In fact, the Indian government is using various tools to make the survival of Chinese companies in India difficult or impossible. One of them is a complete ban on Chinese products, often citing national security concerns.

Tariffs are another popular strategy. In 2018, in order to reverse the situation where Indian mobile phone assembly was in the hands of Chinese competitors, the Indian government imposed a 20% tariff on imported equipment.

Sometimes the Indian government avoids official actions such as bans and tariffs and instead takes more subtle actions. A common approach is to introduce friction. The red tape in India makes it easy for officials to find fault with companies they don't like.

The complex licensing system has also provided Indian authorities with more ways to obstruct Chinese companies from conducting business in India.

While obstructing Chinese companies, India is also using policies to drive them out of various markets where they dominate. India's $33 billion "production linked incentives" program has identified 14 areas of interest, many of which are dominated by Chinese companies.

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