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REDUCING IMPORTS FROM CHINA

Focus: GS-III Indian Economy

Why in news?

  • According to a study – just 327 products — ranging from mobile phones and telecom equipment to cameras, solar panels, airconditioners and penicillin — accounted for nearly three fourths of the imports from China.
  • The study also pointed out that it is possible to find alternative sources to get these goods or manufacture them in India.

Introduction

  • In recent years, China has emerged as the hub for the production of electronics, pharma and chemicals with global giants setting up manufacturing facilities to not just cater to the domestic market but export to other destinations, including the US and Europe.
  • Following the outbreak of Covid-19, several companies are looking at de-risking their production chains by setting up or relocating facilities to other countries.

Details

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The study estimated the value of the “critically sensitive imports” at more than $65 billion in 2018 in overall imports of a little over $90 billion.

A product was considered sensitive if China accounted for over 10% share of imports or if the value of shipments was $50 million or more.

China not the most competitive producer in 82% imports: Study

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  • In terms of the number of goods imported from across the border, the share of the 327 sensitive products was less than 10% of the items that were imported from China.
  • The study estimated that in case of 82% products, China was not the most competitive producer.
  • But there are also products where China is the sole exporter.
  • It is possible to produce some of the products domestically if other sources are not immediately available.

-Source: Times of India

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September 2022
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