India banned 59 Chinese app; explained!

India is on the verge of a cold war with China due to the bilateral border disputes in the adjusting area of Ladakh and Galwan Valley. The conflict had made a serious turn when India lost 20 soldiers before confirming any solution.

The actual scenario of India’s decision

The event created a large mass rage among the Indians. So the government has to ban near about 59 Chinese originated applications mentioning the prejudicial security issues.
The common Indians seem to be happy with the move of the government and are expecting some more constructive steps to Boycott China’s economic intrusion in the Indian market.
But things are more complex if we think it from modern economic policy. The question remains, has India given the exact answer by only boycotting some trivial applications that came from China? The answer is no.

If we need to throw some honest blows to the face of China, we have to make decisions that will terminate the least economic investment that China has into some of the most important entrepreneurship in India. But India has not completely bid them goodbye. If you look at the companies that hold major investments from China, we feel that banning only 59 apps will create the sensation of ant bite on to the Chinese gigantic economic body. The following Indian startup businesses with Chinese investment, I will make it more clear.

Chinese investment in Indian startups

Some of the important companies which have more Chinese investment are- Paytm 400 million US$, BigBasket 250 million US$, Swiggy 500 million US$, Flipkart 300 million US$, Snapdeal 700 million US$, Baiju 550 million US$, Zomato 200 million 500 US$, Paytm Mall 150 million US$, Oyo 100 million US$.

Comparative export/import analysis of both countries

If you count the numbers, China has almost 4 billion US$ into Indian startups, while China FDI into India is about 6.2 billion US$. Ever since 2014, the growth of Chinese investments has been growing high. In 2017 China invested an estimated amount of 2 billion US$, which was 700 million in 2016. And as the years go on it increases rapidly with the profit shared by both the countries according to their economic investment capacity. India’s import from China as a remarkable growth rate in 2017 2018 and 2019. That defines our dependency on foreign products. India is highly dependent on products from China. Every year India has to import products like electric machinery, sound equipment, nuclear reactor, boilers machinery, and mechanical appliances organic chemicals plastics articles of iron and steels and most importantly, raw materials for medicines. India has always been a trade deficit when compared to its export to China. Last year India had imported commodities which rupees 68 billion US$ from China while it has only exported 16.32 billion US$ with 51.68 trade deficit.

India’s banking and other sectors in Chinese land. ( Including shared venture)

Both countries have bilateral investments according to their capacities. In 2019 China has had 5.08 billion US$, and India has 0.92 billion US$ reciprocal investment. Both countries share banking sector cooperation, as well. In the last few years, Indian banks like SBI, ICICI, and Axis have built their existence in China. This is a good sign. Apart from both the country is are working on Oil and Gas sector, DTAA, SOCIAL SECURITY AGREEMENT AND RAILWAYS SECTOR etc. Some of the important Indian companies have opened up their business in China’s mainland .( INFOSYS ,NIIT, TCS ,MAHINDRA ,TATA SONS ,BINANI CEMENT ,APTECH ,WIPRO ,MAHINDRA ,SATYAM ,DR REDDY ,SUZLON ENERGY ,BHARAT FORGE ETC)

China’s economic stronghold on India’s market

It is very true that Chinese companies in India were having more economic stronghold as they occupy every space of the Indian market. According to the official data, more than 100 Chinese companies have already penetrated the Indian market. Indian machinery and infrastructural body is hugely pervaded by Chinese owned companies. Companies like China Dongfang International, Sino Hydro Corporation, Sinosteel, Shougang International, Baoshan Iron & Steel Ltd, Sany Heavy Industry Ltd, Chongqing Lifan Industry Ltd etc. have their business and project offices in India. Most importantly, in the era of smartphones, companies like Xiaomi, Realme, Huwai, Vivo, Oppo occupy 50% of Indian Market.EPC projects of India’s power sector are largely dependent on Chinese companies like Shanghai Electric, Harbin Electric, Dongfang Electric, Shenyang Electric etc. Even India has to hire Chinese companies for its high roads project. Electronic, IT and hardware manufacturing companies like Haier, ZTE, TCL, Huawei has been doing a great deal of business in India.

A different perspective

Some whispers, which are in the air, say that India is backed by other countries like USA, France, Russia, Israel etc; on its decision to ban China. In diplomatic relations, these things matter. But time and again it has happened that every nation has it’s own prior interest if it agrees to help another one. Marketspace is an important factor to grow economically healthy. India is undoubtedly a big market. India has a huge customer. It’s true that China is using that space to sell their overgrowing products. Indians are consuming a large share of their products because they are low cost. Before China, Indian market used to be shared by European products. As already discussed, if we look at the present-day scenario, we will find that China is occupying more space than any USA based company. Since the last two decades, China has been doing tremendously good in its economy. Probably that can be a matter of grave importance for economically stable countries like the USA. If China has to lose the Indian market, some other has to come in. And the time will say if we can be happy with them or not.

The Big Question

So if we ban Chinese completely, they will surely have to lose a huge market to consume their overwhelming products. But the question remains, can we satisfy the demand of our own customers? It is a big question. It is true that economic infrastructure cannot be built overnight. And the inevitable question we have to face. And that is – If the situation worsens between two countries, can we manage the severe economic breakdown in the form of unemployment?
We have to remember that the whole world is suffering from the recession due to the pandemic.

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