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Indian policymakers in dilemma over trade policy for China

New Delhi : Dissatisfied and angry over China’s move to take Kashmir issue to UN, the Indian traders guild, has once again asked to boycott Chinese goods and services. However, to ban Chinese goods and services in India can adversely affect Indian economy according to SBI Research report as eruption of the trade war between US and China has resulted into more than expected growth in Indian exports to China over the past one year due to tariff barriers created for US by China.
The exports in certain categories like plastic & rubber, animal products & animals, vegetable products to China have witnessed growth of 93.7 pc,  335 pc and 134 pc respectively in FY 2018-19 over the previous year.  However, in metal sector, the exports to China from India fell despite imposition of tariffs on US by China. The share of Indian exports remains 1 pc and that of US remains 2.1 pc in Chinese imports in FY 2018-19.
The exports to China has increased since 2016 and China can offer better prospects in this aspect in future in view of protectionism policy of China. India is also dependent on China for its capital goods supplies. However, the value of Indian exports to China is far less than the value of Indian exports to US.
Keeping these things in mind, India needs to be cautious in imposing ban on Chinese goods and services and needs to evaluate pros and cons for economy before any policy change in trade with China and US.

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