India’s smooth relation with China over the decades has seen a setback since May 2020 due to the border tensions. As a consequence, India imposed a ban on several Chinese administered applications in consideration of the nation’s security and integrity. Loosening the relation with China, India should think of answering two questions: Is it sensible to boycott Chinese products altogether as India’s dependency domain is China? Secondly, is India self-reliant to manage all it needs that China provides especially in the field of electronics and pharmaceutical?
Over the years, the level of dependency tends to increase as we consider the above data. Before 2003, the level of dependency was less, but over the next 5 years, it has seen a steep increase as the era of electronics begins to rise. China also made strategies to expand its sale in India, as India has a larger number of consumers rather than producers. Chinese products attained a larger scale of consumers because of their cheap rate as compared to Indian products, mainly in the field of electronics.
As per the reports of the Pharmaceutical Exports Promotion Council of India (Pharmexcil), the imports of bulk drug or active pharmaceutical ingredients (API) for the financial year 2019 (FY19) stood at $3.9 billion, up by 10.5% over the previous year. API is the raw materials to manufacture 12 important drugs such as paracetamol, ranitidine, ciprofloxacin, metformin, acetylsalicylic acid, etc. Even many industries accept that API is 20%–30% cheaper in China than in India.
According to reports, India still leads the global market for the production of drugs, but for API, it still depends on imports. According to Dr Sakthivel Selvaraj, Director, Health Economics, Financing and Policy at the Public Health Foundation of India (PHFI) New Delhi, over 80% of API imports are from China.
According to a paper by policy think tank Research and Information System for Developing Countries, just 327 products ranging from mobile phones and telecom equipment to cameras, solar panels and air conditioners account for 3/4 of the total imports from China.
But given the historical unstable political relationship with China, is it risky to be overdependent on China for API and other electronic items. India should take measures to attract manufacturing companies towards it with its diversity and larger scale of the working force. With the current environmental issue aggravating the situation all across China, thousands of raw material factories were forced to shut down and many decided to move out of China during this pandemic. India should use this opportunity to build up and strengthen its manufacturing sector.
The self-reliance of the Indian Pharma industry and electronic industry is needed to sustain and lead the nation towards prosperity.