File image used for representation
NEW DELHI: Just 327 products — ranging from mobile phones and telecom equipment to cameras, solar panels, air-conditioners and penicillin — accounted for nearly three-fourths of the imports from China, a study has estimated, while pointing out that it is possible to find alternative sources to get these goods or manufacture them in India.
A paper by policy thinktank Research and Information System for Developing Countries (RIS) used UN Comtrade data to estimate the value of these “critically sensitive imports” at $66.6 billion in 2018 in overall imports of a little over $90 billion. In 2018-19, official numbers had pegged imports from China at $76.4 billion.
A product was considered sensitive if China accounted for over 10% share of imports or if the value of shipments was $50 million or more. “Such export monopoly of China has to be diluted in view of strategic requirements,” the report said.
In terms of the number of goods imported from across the border, the share of the 327 sensitive products was less than 10% of the 4,000-odd items that were imported from China. The study, which shared with TOI, estimated that in case of 82%, or over 3,300 products, China was not the most competitive producer.
But there are also products where China is the sole exporter. The product base ranges from everyday-use items such as earphones and headphones to microwave ovens and certain types of washing machines. The list also has several types of machinery, some auto components, escalator components, certain acids and chemicals and fertiliser like diammonium phosphate, where China is the sole supplier.
“It is possible to produce some of the products domestically if other sources are not immediately available,” RIS director general Sachin Chaturvedi told TOI. The RIS paper suggested taking a strategic view while deciding on alternative sources for imports.
In fact, since March, the government has started tapping overseas missions to identify alternative sources of import of products. Economists and traders, however, point out that it may not be possible to find the products at the same scale, something that even the RIS report points to. “As China is empowered with scale factor, other competitors lose their grounds when delivery of voluminous trade takes place,” the study noted.
In recent years, China has emerged as the hub for the production of electronics, pharma and chemicals with global giants setting up manufacturing facilities to not just cater to the domestic market but export to other destinations, including the US and Europe. Following the outbreak of Covid-19, several companies are looking at de-risking their production chains by setting up or relocating facilities to other countries.
The report’s author, S K Mohanty, told TOI that in several cases, domestic production should be encouraged, something that the government is trying to do through the incentive scheme for production of mobile and electronic goods and pharmaceutical products. The commerce and industry ministry has also identified a dozen sectors, raging from furniture and footwear to air-conditioners, where it is seeking to provide sops.
“Places where diversification of import sources is not possible, local manufacturing is a better option. We have suggested short-term and medium-term solutions,” said Mohanty.
He also said that though India’s share in China’s trade may be low, it is a significant contributor to its overall trade surplus. “Unlike what many people are arguing, a diversification of the import basket will impact China,” Mohanty said.