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02 Jul 2020 by Pradeep U
What This Sector Teaches India About Self-Reliance? - Research & Ranking

#BoycottChina has been trending on social media from the last few days. But is it as easy as it seems? To get into that, we have to take a sneak-peek into a few details…

Knowingly or unknowingly, most of us have used Chinese products in our day to day life. In fact, many of the electronic products we purchase in India, from Indian companies are also manufactured in China.

To give you an example, I recently purchased an OTG online from a leading brand in India which makes everything from motorcycles to household electrical appliances. However, I was very disappointed to see ‘Made in PRC’ printed on the box of OTG after I took the delivery.

So, considering this dependence on Chinese products, is it possible to boycott China? And how did it all start?

The story traces back to the period of lockdown in China to prevent the spread of Coronavirus, which halted the global supply chains for several industries in India as well as globally, which depend on China for both raw materials and finished goods.

Also, a few weeks back, PM Narendra Modi in his speech to the nation, stressed the need to make India self-reliant in the wake of acute shortages faced in specific equipment in India due to lockdown in China. In one of previous articles we wrote about how India can become more self-reliant by decreasing its dependence on China. You can check out the article here.

But was this enough justification for boycotting China?

The final nail in the coffin was the rising border tensions among India and China, that made it even more critical for India to be self-reliant than ever before.

But with a massive imbalance in trade between India and China presently, some are sceptical whether this is indeed possible. Afterall China is India’s biggest trading partner with India importing everything from toys, stationery, electronics, gems, chemicals, pharmaceutical raw materials and heavy machinery from China.

So, does this mean this is just a distant reality, assuming if it ever happens? Wait…

Boycotting China – A reality or a dream?

If you see, few sectors have been already doing that. Before I tell you about that, let me tell you a real-life incident.

In 2005, an Indian company partnered with a Chinese company to launch 100 cc motorcycles in India. A retail shopkeeper whose shop is just outside my building was one of the first people in our country to buy it.

I still remember the day he bought it and parked outside his shop, a small crowd had gathered in awe with many asking questions about the motorcycle and its brand etc. The most significant point which caught everyone’s attention was the dirt-cheap price of Rs. 30,000. On contrast, market leader Hero Honda Splendor motorcycle was retailing for Rs.44,000.

Fast-forward a year later, one day when I went to the shop, I noticed the shopkeeper’s bike which was covered with tons of dust and bird-droppings as it had not moved for several days. Out of curiosity when I asked him the reason why he is not driving the bike, he replied he was unable to source some replacement parts which had worn out in the bike.

Till date, the bike is still parked there rusted to the core and giving a grim reminder of cheap quality which, the Chinese were initially famous for. In 2005 when cheap Chinese motorcycles entered the Indian market, many predicted the end of Indian motorcycle companies like Hero MotoCorp, Bajaj Motorcycles and TVS Motors.

However, these Indian companies did not take the competition lightly. They were already prepared for such a situation for many years. And for this, they had invested significantly in developing world-class R&D teams, pumped in significant investments for the same and hired the best automobile engineers and designers they could afford.

The result of that was seen in terms of their consistent market share over the years despite the entry of Japanese motorcycle companies like Honda, Suzuki, Yamaha and Kawasaki, who decades back were the technology partners of Indian motorcycle companies.

But the success stories of Indian motorcycle companies like Hero, Bajaj and TVS do not stop there. Today India is the largest motorcycle manufacturer in world the beating even China. KTM which sells most bikes in Europe, is partly owned by Bajaj. Indian motorcycle companies have been on a global acquisition spree to reach global markets with TVS Motors acquiring the iconic British brand Norton, Mahindra Group acquiring Czech brand Jawa and British brand BSA.

Recently Bajaj Motorcycles have also tied up with Triumph Motorcycles to produce medium-capacity 200-700 cc motorcycles in India. All these efforts by manufacturers of Indian motorcycle companies have shown impressive results.

India exports motorcycles to its neighbouring countries like Srilanka and Bangladesh as well as countries in Africa, South America, Gulf and South East Asia.

So, don’t be surprised the next time when you spot a TVS motorcycle zooming past you while on a trip to Pattaya or if a motorcycle taxi you hire in Lagos turns out to be a Bajaj motorcycle.

Apart from beating the Chinese in the two-wheeler segment, India also has managed to establish a robust two-wheeler ancillary manufacturing and supply chain.

India’s two-wheeler exports increased by substantially in FY2019-20. The total two-wheeler exports, including motorcycles, scooters and mopeds, reached 35,20,376 units in FY2019-20, as against the 32,80,841 units exported FY2018-19.

The question now boils down to – Can we achieve the same success in other sectors as well?

It all boils down to the will of the manufacturers and of course, government support in the form of cheap and 24x7 electricity, improved labour laws and better infrastructure. With this necessary boost, can India become self-reliant? Definitely.

 

 

 

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