Karnataka

‘Decoupling India-China economies neither feasible nor desirable’

Indian and Chinese economies are closely intertwined and decoupling is neither feasible nor desirable despite huge trade deficit for India, said Karnataka Small Scale Industries Association (KASSIA).

The India-China trade has been in favour of China and has built up into a huge deficit for India over the years. The Chinese advantage has been its manufacturing economy. The trade between India and China today amounts to 90 billion dollars. But, trade is hugely in favour of China with India facing a deficit of USD 63 billion, said R. Raju, president of KASSIA.

A large number of Chinese companies in technology and other sectors have a presence in India like FOSUN International, VIVO Electronics, SAIC, MEDEA Alibaba, Tencent and Byte Dance, Paytm, Byju, Oyo, and Ola among others. “In 2018, it was estimated that about 700 Chinese companies were active in the market with USD 11-12 billion investment,” said Mr. Raju.

Similarly, a large number of Indian companies are in China, including Dr. Reddy’s Laboratories, Infosys, TCS, Wipro, Arvindo Farma, Bharat Forge, Mahindra and Mahindra, Tata Sons, NIIT, Sundram Fasteners, among others.

China is a large manufacturing economy on which many countries, including India, depend because of its cost advantage. “The economic relationship between India and China, and also the rest of the world is closely inter-twined and complex. But, the relationship is now looking frayed and the economies have been disengaging for whatever reasons. But, this may not be feasible,” added Mr. Raju.

These are some of the critical issues that need to be addressed by both the Central and State governments, wherever relevant, so that industries can be back on track as quickly as possible, he said.

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Printable version | Jul 8, 2020 5:47:32 AM | https://www.thehindu.com/news/national/karnataka/decoupling-india-china-economies-neither-feasible-nor-desirable/article31948726.ece

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