Indo-China border dispute: Is India’s ‘self-reliance’ policy realistic?
Kashvi Singh
The recent clash between China and India has failed to
surprise the world, after all the two countries have long standing history of
border disputes despite their healthy trade relations acting as a barrier
against this. Be it China’s claims over the Indian state of Arunachal Pradesh,
scuffles over regions of the Himalayas, Ladakh and Sikkim, or China’s support
of Pakistan over the Kashmir issue, problems between the two nations seem to be
never-ending.
This time, on the 15th of June, border clashes
between the troops in the Ladakh region led to high casualties for both China
and India; and like the aftermath of every border clash between the two
nations, what ensued was an aggressive campaign to boycott Chinese products in
India in an attempt to use “wallet power” against China, with people seen
publicly destroying items such as smartphones and televisions that were imported
from China. The Indian government and businesses have responded to this
campaign by taking several steps to reduce India’s dependency on China. For
instance, the government issued directives to cancel or limit Chinese contracts
with public sector companies, leading to the Indian Railways cancelling a
contract with a Chinese firm, while Mumbai cancelled a monorail contract where
the only bidders were Chinese companies, and alternatively said it would focus
on finding an Indian technological partner instead. There are also calls for
making sure the Chinese do not have access to strategic markets in India. In
retaliation to this, customs in China and Hong Kong have held up Indian
exports.
However, the most striking move by the Indian government was
the ban on 59 Chinese apps such as TikTok, Weibo and WeChat, claiming that
these platforms posed a threat to the "sovereignty and integrity of India,
defence of India, security of state and public order." At the same time,
Indian companies have begun submitting proposals to the government on ways to
reduce import dependence on China, suggesting measures such as Covid-19 import
duties on non-essential items along with a reduction of customs duty on plant
and machinery from other countries.
While many in India have supported the government’s
decision, some economists have warned that policies of self-reliance and
protectionism would be “precisely the wrong way to tackle the long-term threat
of a rising China”, mainly because- while reducing trade with China would hit
Chinese companies badly, which would add pressure on China to stop military
infiltration and to drop claims on Indian territory, doing so very suddenly, is
more likely to hit the Indian economy harder than China. This is because, India
does not only rely on China for its digital and pharmaceutical imports, India’s
economy is also highly dependent on Chinese firms that create employment in the
country. In fact, 18 of India’s top 30 successful start-ups, such as Paytm, Ola
and Flipkart, are Chinese owned and funded. In 2019, India imported $85 Billion
worth of goods from China, making this a highly profitable source of income for
the Indian government, due to which, the Prime Minister’s recent initiatives to
reduce India’s dependency on China have been said to be only short-term and in
order to please the angry Indian public, leading to several accusations of the
government being ‘unclear’ in its policy towards China.
At the same time, many economists have also warned the
Indian government over the country’s dependence on China for electronics and
drug ingredients, which poses a risk to Indian industries if for example,
Beijing decides to limit exports of these pharmaceutical inputs over diplomatic
tensions. The implications of this threat become even more alarming considering
how the current government’s initiatives to boost manufacturing and exports in
India have failed almost entirely. Nonetheless, if there is one thing we can
make of this episode, it is the fact that the Indian public seems to have
joined the United States, South Korea and Japan with their anger and hatred
towards China’s recent behaviour, therefore increasing the likelihood of the
global economic isolation of China in future.
https://en.wikipedia.org/wiki/2020_China%E2%80%93India_skirmishes
https://www.jagranjosh.com/general-knowledge/list-of-chinese-funded-companies-in-india-1500032596-
https://foreignpolicy.com/2020/06/29/trade-war-china-bad-idea-india-border-skirmish-boycott/
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