Boycott Chinese Products: A Good Idea?

    It’s a mournful day for the entire nation as the Indian Army confirmed the death of twenty personnel in violent clashes with Chinese troops along the Line of Actual Control(LAC) in Ladakh. For the past few days amidst the border tensions between our neighboring countries and the fight against COVID-19, we must have come across some messages asking us to boycott Chinese apps and products. It may be a Whatsapp forward or a tweet with hashtags (#BoycottChineseApps & #BoycottChineseProducts) simply asking us to get rid of Chinese apps and products from our life, in order to show our solidarity with Indian Army. Now, does it make any sense? Will deleting few apps and boycotting goods really maim China and help India? 

    Many popular Chinese apps are being used in India like Tik Tok, Pubg, ShareIt, and Helo, etc., which boasts their millions of downloads among the Indian demographic population. It is quite rude to say that nowadays there is no girl’s smartphone without Tik Tok and no boy’s smartphone without Pubg. Based on the prevailing Anti-China mindset, if we feel like we should uninstall Tik Tok or Pubg from our phone, then we should go ahead and do it. By doing so we’re not serving for any national cause, it’s just the individual choice that we want to make. The real worry is about the data. Who controls the data? Because data is an economic resource and it can also be a strategic resource. So we need an effective data regulatory system. India has not yet enacted specific legislation on data protection. Though the Indian legislature did amend the Information Technology Act (2000) (“IT Act”) to include Section 43A and Section 72A, which give a right to compensation for improper disclosure of personal information, it is still languishing. Thus, we need to work on building efficient data regulatory architecture, rather than boycotting apps.

    In the humongous smartphone market in India, the Chinese are the dominant players as recent statistics and they hold a market share of around 60% in India. The predominant Chinese players include brands like Xiaomi, Vivo, Oppo, Realme which have their mega factories in India. These brands actually play it intelligently by labelling their products, "Made in India". Technically, they are not made in India, they are just assembled in India. Since most of their components are simply imported from China and even some of their premium flagship phones are completely imported from China, you may wonder how these Chinese manufacturers have taken up the market. It’s all because of their aggressive pricing, the specs they give and their realisation that India is a country where people are conscious about how much they spend. India doesn’t have any indigenous smartphone manufacturers except LAVA Mobiles, which is struggling to shift it’s R&D and manufacturing unit from China to India. If we boycott these Chinese brands, then the other choices are Samsung, Apple, Nokia or Asus, etc. Taiwan based Asus, whose recurrence of producing smartphones for the Indian market turned out to be excessively low. Almost 90% of smartphones of Finnish Nokia and the so-called US’s Apple are again made in China. Then comes the South Korean based Samsung, which has the World’s largest smartphone manufacturing plant in India. We can see how overpriced Samsung smartphones are when compared to Chinese smartphones with the same specs. Not every Indian consumer is capable of spending more premium prices on these brands like Samsung, Nokia, etc. It is pretty obvious that if people had enough funds left, they would spend premium prices for these brands as alternatives to Chinese brands. But the Indian consumers are already pressurized due to the rise in GST from 12% to 18% for smartphones and loss of jobs or pay cuts for many people due to the COVID situation. Major unicorn startups of India like Flipkart, Paytm, Ola and Byju’s also have Chinese investments. So it is nearly impossible to neglect everything related to China. 

    In the big picture, Chinese imports in India account for 17-20% of total imports in India. But, India Accounts for only about 3-4% of total exports of China which is not much significant. If we try to maim China by boycotting their goods, it might affect 70 billion USD revenue to China but it will not make a great impact and this will only end up hurting our own selves. These cheap, high-quality products allow Indians to be connected and move up in the value chain. So boycotting Chinese products is not a pragmatic way. In the end, it’s all about money. It will be nationalistic for only a certain period. Once it starts hitting our pocket, then nationalism fades away and rational economic decisions will come into play.