*Image credit: gizmochina.com
Presently India has banned China's 59 Apps and levied increased duties on Chinese products. Let's see what facts and statistics has to say and who stands to Gain or Loose.
Of India's net imports 18-20% comes from China. Let us assume China- India trade stops completely.
India will save Rs 4.5 Lakh Crores annually and China will lose equivalent amounts. Assuming the average monthly income of Chinese is Rs 50,000 about 7.5 crore people will lose job in China. If 50% are foreigners, then also 3.5 crore Chinese will lose jobs.
Let us see how India is impacted. In some sectors, India is heavily dependent on China, like Pharma, Consumer durables, Telecom-Electronics, Chemicals & Agrochemicals.
60% of raw materials or Active Pharmaceutical Ingredient (API) is imported from China. On the other hand, 80% of medicines India makes are exported. India is called "Pharmacy of the World". So if Chinese API is not available, India won't die, yes exports will come down. Whereas 45% of finished medical products for China comes from India. So here China stands to lose more. For manufacturing API profitably in India some policy changes will be brought in July 2020 says Mr Sudarshan Jain(Secy Indian Pharmaceutical Alliance). He is hopeful that in 2 to 3 years India will be self-sufficient in API.
A Lot of Indian cos. are dependent up to 30-70% on China. But the exception is Havells, less than 5% they are dependent on China. So in this field, India has to adopt a new way. Havells has already shown us the way out of Chinese goods.
*Electrical, Electronics & Telecom Industry*
Most of the major mobile brands are basically Chinese. Xiaomi, Oppo, Vivo etc. If China stops business we will not be able to keep abreast of the latest Mobile and communication technology, this is but natural to think. But before that let us see some figures.
In 2014, there were only two mobile manufacturing sites in India. Then comes Make in India. In 2019 India has 268 mobile manufacturing sites. In 2014-15 it was Rs 1.9 lakh crores production which stands at Rs 4.58 lakh crores (2018-19). Meanwhile, India has become the 2nd largest mobile manufacturing country after China(Economic Times 30.01.2020. From the start of Make in India trade deficit of India with China is coming down. So you can rely that in the Mobile sector it is not going to affect in a big way, on the contrary, it will benefit India.
In these times India will develop to fill the vacuum in the market because as per the Law of Economics Demand-Supply will always balance. So we should always think about what is good for our country. Former American President Abraham Lincoln once said, "If I purchase a coat from England, the coat becomes mine but the money goes to England. If I buy a coat from America, still the coat remains mine but the money stays with America."
*App ban issue*
True, India does not import it directly but because of India, they get business. Let me explain a bit. Income from any App is basically from Ads and In-app purchases. The company which sponsors Tiktok or advertise in Camscanner are the income source. This sort of Ad is called Digital advertising. Here payment is based on Cost per Click or CPC. In this procedure, if some user clicks on the Ad or it sees any video ads, they pay the App. In India, the CPC rate is within $0.2-0.3. And click-through rate(number of persons who click the Ad) 0.3-0.5%. For example, say Camscanner this App has more than 10 crores download in Play Store. For this one App, the owner of Camscanner daily earns minimum Rs 50 to 60 Lakhs. This can go up to Rs 10 crores daily.
Hope App ban effect is now crystal clear. Just verbal abuse does not help. What facts speak is the way to know the truth. Boycotting Chinese goods and China-India business stoppage will not have an adverse effect on India. But we can make a big dent on the Chinese economy. Now it is your responsibility to follow Abraham Lincoln's footsteps or follow some brokers who are on Chinese payrolls.