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Covid surge hikes medical imports from China, but 43 per cent Indians reject Made-in-China products

China continued to be a large source for imports of medical equipment and chemicals, particularly pharmaceutical ingredients to India

China continued to be a large source for imports of medical equipment and chemicals, particularly pharmaceutical ingredients to India. Those imports climbed during the surge in the second Covid-19 wave in India.

The bilateral trade between the two countries has increased by 42 per cent on a year-on-year basis during January-May 2021. This rise has been mainly attributed to the second Covid-19 wave in India, which saw live-saving medical equipment and Oxygen being imported from China, according to a report released recently by online survey firm LocalCircles. “Though Chinese trade with India declined in the calendar year 2020 by 5.6 per cent to $87.6 billion, the 5 months of the calendar year 2021 show a 42 per cent increase in Chinese imports by value," the report said.

The household earnings were severely impacted with lockdowns and for some, buying the lowest cost product was not a choice but the only option and, hence, they ended up buying Chinese items, the report explained the reason behind the rise of imports. During the pandemic in 2020 and 2021, many Indians purchased pulse oximeters to measure their oxygen levels and 90 per cent of these oximeters available in India were made in China. “Majority of Indian consumers who purchased made-in-China products did so because they are the cheapest available option and offer value for money,” the report said.

“It must be kept in mind that there are many made-in-China products that do not have an Indian counterpart that offer similar or higher value-quality-uniqueness combinations. Similarly, many global manufacturers of gadgets and appliances have their factories in China producing for global demand and while such products may carry a global brand name, they are produced in China,” the report said.

Indians Reject Chinese Products

However, the online report revealed strong disliking of Chinese products among Indians following the military standoff with China at the Line of Actual Control (LAC) in eastern Ladakh. About half of Indian consumers surveyed said they did not buy made-in-China products in the past 12 months in the aftermath of Galwan clash. A whopping 43 per cent of people have rejected made-in-China products and have refused to buy goods manufactured in the country.

"The first question in the survey sought to understand how many products that were made-in-China did Indian consumers purchase in the past 12 months, in response 43 per cent said they did not buy anything made in China,” the report said.

Another survey conducted in November 2020 by the agency indicated that around the festive season, 71 per cent of Indian consumers did not purchase made-in-China products and many of those who ended up buying were doing so  because of lower prices.

The survey revealed, after the violent Galwan clash in June 2020, 34 per cent of consumers said they purchased 1-2 Chinese products, 8 per cent bought 3-5 of them, four per cent of consumers bought 5-10 made-in-China products, three per cent said 10-15, one per cent said over 20, and another one per cent said 15-20 products.

India-China Trade Continue to Show Buoyancy

Yet, trade between the two countries is growing despite strong anti-China sentiment, jingoism and policy intervention to minimise bilateral trade. But it failed to dent India’s overall trade with China.

China has emerged as India’s largest trading partner as the value of transactions between the US and India fell during the Covid-19 pandemic. India’s two-way trade with China in 2020-21 is showing strong buoyancy as trade volume between both countries rose to $87 billion in 2020 despite the downturn in the bilateral ties due to the border conflict since May 2020.

Demonstrating the strong resilience of trade cooperation between the two countries,  trade grew with the total volume reaching $27.7 billion– a year-on-year increase of 42.8 per cent in the first quarter of 2021– according to data released by the Chinese government in April.

India’s exports to China soared while imports ebbed in the financial year 2020-21. Exports from India to China climbed 27.5 per cent from $16.61 billion a year ago to $21.19 billion, according to provisional estimates published by the Indian government in May. Though India’s imports from China held steady at the previous year’s level. India imported goods worth $65.21 billion from China in 2020-21 whereas imports in the previous year were worth $65.26 billion.

India’s overall import bill for 2020-21 fell 17.1 per cent to $393.60 billion and exports declined by 7.2 per cent to $290.81 billion due to global trade contraction. As a result, China’s share in India’s import bill rose to 16.6 per cent from 13.7 per cent a year ago and the share in exports grew to 7.3 per cent from 5.3 per cent.

India’s imports from China, however, are much lower than what they were in 2017-18 when they had climbed as high as $76.38 billion, led by a jump in imports of mobile phone devices, computers and other parts used in the assembly of these instruments. Incentives offered by the Indian government for local manufacturing of parts and assembly of phones since then have reduced imports of telecom devices from $15.59 billion that year to $6.48 billion.