Dr MP Sukumaran Nair
The over two and a half decade long India -China Border Peace and Tranquillity Agreement (BPTA) came to a collapse following the June 15 clash, the worst violence since 1967, at Galwan Valley, which claimed life of 20 Indian soldiers. Soon after, nationwide sentiments grew against China causing trouble at a time it was most unwarranted- amidst the COVID-19 crisis and growing bilateral trade between two countries and more than ever before interactions and collaborations at the highest level in the Governments. Many propositions – boycotting Chinese goods and services, stalling Chinese contracts and collaborations were raised by different groups like the Swadeshi Jagran Manch and Confederation of All India Traders from different parts of the country. Some governments like Maharashtra have initiated certain actions also in this regard. This sentiment is subscribed by many in the industry and there is also a widespread concern about the use of Chinese video conferencing app Zoom, smart phones and mobile Apps with regard to its security and privacy.
Today, our dependence on Chinese imports is of the order of rupees 9 lakh crores. It includes import of electrical machinery, chemicals and pharmaceuticals, electronic components, steel, mineral fertilizers, solar cells, computers and smart phones and a vast array of consumer products from the MSME sector. Balance of payments towards India China trade till February, 2020 comes to Rs 3.58 lakh crores. Most of our heavy, medium and small sector industries source machineries and spares, raw materials, components, semi finished products etc from China.
To cite one example, our import of active pharma ingredients (API) for the pharmaceutical industry alone is worth Rs 17400 crores (2019). Prior to the opening up of the national economy in 1991 we have imported only one percent of pharma products which now stand at eighty percent. Last year we imported 141 lakh metric tonne of urea and complex fertilizers which included 45 lakh metric tonnes from China. Beware of the fact that in 2000, being self sufficient we have stopped imports of urea and since then due to flawed fertilizer related policies the sector did not see any more investments and consequently domestic production stagnated. To meet the rising demand from the farm sector, the country started importing urea after 2000 and today we are the largest importer of urea globally and bulk of it comes from China. The plight of our electrical, electronics and telecom equipment manufacturing industries also is no different. Even in sectors where we have abundant resources like titanium minerals, investment is lacking and therefore import dependence of China is increasing amidst growing domestic needs.
The mute point is how far we are able to immediately ward off Chinese products and services from our day to day life? Not that easy as many think. Primary reason is the unfriendly national economic policies of the past quarter of a century which progressively eroded our domestic manufacturing capabilities in critical sectors, dried up the growth impetus of our prestigious public sector industrial undertakings which upheld national prestige and repute among developing countries and hollowed the competitive edge of our numerous MSMEs and thus rendered us a dependent economy. The survival of these institutions even after the constant onslaught over the years is indicative of their inner strength and the validity and genuineness of the public cause for which these institutions are founded.
Even when the Modi government harps on India, a 5 trillion dollar economy by 2024 focusing on build up of domestic strength, unproductive decisions on privatization and sell off of the public assets are neither put on hold nor reversed. In each of the above sectors we have proven strength and capabilities. Management, not technology is at fault in Indian manufacturing. Under conducive national policies fostering self reliance and innovation, our scientists, engineers and managers are bound to excel in most sectors and strengthen Indian institutions in public, private and co-operative domain that can contribute to wealth generation and come out of monopolistic dependence on critical inputs from China. Will the COVID-19 and the recent Chinese military action force the government to rework its strategies for economic development for a brighter future for its nationals?
*formerly Secretary to Chief Minister & Chairman, Public Sector Restructuring & Audit Board, Govt of Kerala.
