India relies on China for products such as electronic components
and drug ingredients because it cannot make them or source them elsewhere as
cheap.
Days after a
border clash with China this month in which 20 Indian soldiers were killed, New
Delhi told firms to find ways to cut imports from China. But two big industries,
automobiles
and pharmaceuticals, say this is easier said than done.
Like many countries, India relies on China for products such as electronic components and drug ingredients because it cannot make them or source them elsewhere as cheaply, company and industry figures say.
Like many countries, India relies on China for products such as electronic components and drug ingredients because it cannot make them or source them elsewhere as cheaply, company and industry figures say.
Thus any moves to
curb imports or make them costlier without developing alternatives will hurt
local businesses.
"We don't
import because we like to, but because we have no choice," said R.C.
Bhargava, chairman of Maruti Suzuki India Ltd , the country's biggest carmaker.
"To attract
companies to produce locally, we need to be more competitive and lower our
costs compared with other countries."
India imported
around $70.3 billion of goods from China
in the fiscal year to March 2019, and exported just $16.7 billion - its widest
trade deficit with any country.
The government is
now consulting with companies on tightening curbs on 1,173 non-essential
products, a trade body official said on condition of anonymity. They include
toys, plastics, steel items, electronics and specific auto components - which
feed vehicle manufacturing.
This is on top of
plans to raise trade barriers and import duties on around 300 products from
China and elsewhere, as part of Prime Minister Narendra Modi's self-reliance
campaign.
