Explained International

India’s Economic Punches Against China – An Account

china’s economic interests

As the news cycle is abuzz with the reports of Chinese troops disengaging at the Line of Actual Control (LAC), there is scope to attribute many aspects to this development. PM Narendra Modi’s visit to Ladakh and his messaging may be the factor playing the catalyst. Apart from this, India’s move of restricting China’s economic interests in India also seemed to have created its effect.

Amidst Naysayers, Swift Moves

There are many among Indian opinion makers who argued that banning certain economic activities of Chinese may not deter China. These set of people also argued that it may end up hurting the interests of India. Chinese propaganda media such as Global Times also initially tried to pretend that such measures are inconsequential. But slowly, they also admitted that India’s move inflicted an economic cost to Chinese companies. If at all India’s move like the one banning 59 Chinese apps were inconsequential to China, its administration should not have come with a statement expressing its concerns on the same.

With all these in the background let’s put together India’s recent moves in economic terms.

The Ban on 59 Chinese App

Many naysayers tried to argue two things. Firstly, banning apps like TikTok will deprive Indians of opportunities to express themselves. Secondly, it will not hurt Chinese interest in any significant way.

If we take TikTok case as an example and see what really happened, it actually debunked both the arguments.

Firstly, Indians within no time found alternatives in non-Chinese apps like Chingari. Secondly, news reports emerged about the revenue loss for the company after the ban.

No Chinese Companies in Highway Projects

A couple of days ago, Union Minister Nitin Gadkari made it clear that “no Chinese company will be allowed to participate in any future highway project and companies entering into joint venture (JV) with any firm from China will also be banned from bidding for projects.”

NHAI has already put the bid of a Chinese firm on hold in one of the stretches of Delhi-Mumbai corridor.

Considering that India is set for massive investment in road building and other infrastructure projects, it is certainly a blow to Chinese companies.

Maharashtra government also put a hold on 3 Chinese projects worth Rs 5,000 crore.

Trader Bodies Against Chinese Products

With its aggression at LAC, China has really rubbed Indians the wrong way party. Not just the Indian government – Chinese aggression has forced every patriotic Indians to take a stand. Confederations of All India Traders published a list of 3,000 items in which local alternatives are available for Chinese products. By December 2021, it aims to reduce imports from China upto Rs 1 lakh crore.

Companies Joined Hands Against Chinese

Recently, Hero Cycle announced that it had shelved business worth Rs 900 Crore with China. In another development, India’s largest kitchen appliances maker TTK Prestige announced that it will not place any new orders to procure items and parts from China.

A Global Momentum

Though many countries including the major economies were anguished by China’s behaviour in the background of Corona crisis, they were still weighing their options on raising their voice. It can be argued that India’s assertiveness both at the border and on the economic front gave an opportunity for others to firm-up their stance against China.

The US administration not only backed India’s move of banning certain Chinese apps but also designated China’s designate Huawei and ZTE as security threats.  The UK which was undecided on Huawei 5G network also seems to be taking a stand.

These are only the initial stages of India’s measures in curtailing China’s economic interests. It is apparent from the above trends that it has already began to hurt Chinese interests in many aspects. The critics who argued that India has very limited option to hurt China economically may want to review their position now.