Maruti & Bajaj: #Boycott China Won't Work

Indian firms are now finding ways to cut imports from China days after the clash between the two countries at Galwan valley led to 20 Indian soldiers being martyred. The brands are now fearing consumer backlash over products that come with ‘Made in China’ tag. While a surge is also expected in the import duties from the products, automobile and pharmaceuticals companies are of the opinion that the entire movement is easier said than done.

India imports products like drug ingredients and electronic components from China because the company cannot source them from anywhere else as cheaply or manufacture them on their own. Such a move could hurt the company without finding proper alternatives. The Chairman of Maruti Suzuki India Ltd., R.C. Bhargava, said: “We don’t import because we like to, but because we have no choice”.  Maruti Suzuki is India’s biggest carmaker. He further added that in order to attract the companies to produce locally, we would need to become more competitive and produce the goods at lower costs.

 The Indian Govt. has bee consulting companies to tighten curbs on 1,173 non-essential products which includes toys, plastics, electronics items, steel items, and specific auto components that help in manufacturing the vehicle.

Exports from China increased by $50 billion in 2019 while the exports increased by just $2 billion. The importance of Chinese trade is visible in the fact that 40% of India’s overall trade deficit by Chinese trade.

Chinese supplies have been a key factor in India’s booming Pharma industry, which also exports the cheap generic medicines. Some of India’s biggest drug companies such as IPCA Labs, Lupin, and Sun Pharmaceuticals industries also rely heavily on China for their supply of active pharmaceuticals ingredients (APIs) from there. This also leaves them vulnerable since low Chinese prices help them produce goods within the price controls set in our county and help stay competitive abroad.