DRAGON STRIKES

IMPORTS FROM CHINA WERE THE HIGHEST EVER IN FY2022. BUT THIS DOES NOT SIGNAL THE FAILURE OF INDIA’S STRATEGY TO REDUCE DEPENDENCE ON CHINA.

- JOE C. MATHEW

IN JUNE 2020, Praveen Khandelwal, secretary general of Confederation of All India Traders (CAIT), the apex body of Indian traders, said its 80-million members will not buy or sell goods from China. This was the result of growing anti-China sentiment in sections of pro-BJP organisations, including the ruling party’s ideological mentor Rashtriya Swayamsevak Sangh and its affiliates Swadeshi Jagran Manch (SJM) and Vishwa Hindu Parishad. One reason was skirmishes between Indian and Chinese armies in border areas. Another was Covid-19, which had originated in Wuhan in China and caused global supply chain disruptions. There was also the huge trade deficit and dependence on raw material from China for making several essential goods, including life-saving medicines. All this made government, too, realise the need to find alternatives to Chinese imports.

However, value of goods imported from China touched an all-time high of $85.14 billion during April 2021-February 2022. The last time Chinese imports had touched this level was in FY2018 ($76.38 billion). Imports from Hong Kong make these numbers even bigger. During April 2021-February 2022, India imported $17.24 billion worth of goods from Hong Kong, higher than $13.57 billion in April 2021-February 2022 period. Combined imports from China and Hong Kong touched $102.38 billion in the first 11 months of FY2022.

Coming after loud anti-China campaigns by traders and civil society groups, government’s initiatives to reduce trade imbalance, Centre’s high-profile pitch for atmanirbharta (self-reliance) and ambitious production-linked incentive (PLI) scheme to promote local manufacturing, these record imports pose a big question: Did government’s attempts and citizens’ resolve to reduce Chinese imports fail?