China returns boycott salvo

New Delhi : China today cautioned that even an informal "boycott" of the country's goods in India could hit future investments and hurt Indian interests more than its own, amid social media campaigns urging Diwali shoppers not to buy products from that country. The campaigns, and China's response today, follow a sharpening of differences between the two countries over Pakistan-backed terrorism, a transit corridor China is building through Pakistan-occupied Kashmir, and Beijing's opposition to India joining the Nuclear Suppliers Group. Any boycott would only marginally affect China's exports, less than 3 per cent of which go to India, while depriving Indian customers of products they may not have easy replacements for, Beijing argued today.

"India's boycott of Chinese goods will not have much impact on China's exports," Chinese embassy spokesperson Xie Liyan said. "China is more concerned that the boycott will negatively affect Chinese enterprises to invest in India and the bilateral cooperation, which both Chinese and Indian people are not willing to see." India's government has repeatedly said there is no official boycott of Chinese products, and the commerce ministry has clarified that even the adverse impacts of Chinese steel flooding India would be addressed through international anti-dumping laws. But news reports have suggested a 20 per cent drop in the sale of Chinese products in New Delhi's Sadar Bazar, India's largest wholesale market for household goods, triggering the rare reaction from the Chinese embassy. For China, any impact of such an informal pre-Diwali boycott will prove statistically minimal. The country's total exports - $2.276 trillion - alone amount to India's entire gross domestic product. Commerce ministry data show that of these exports, India received $61 billion in 2015-16 - the most from any single country for India but a drop in the ocean for China. "In the long run, (the) boycott will not only hurt Chinese goods sale but also cause negative effects to consumers in India," Xie said. "Without proper substitutes, the biggest losers of the boycott of Chinese goods will be Indian traders and consumers." Beijing also subtly highlighted the challenge India could face if any boycott were to be reciprocated. India in 2015-16 exported goods worth $9 billion to China - just over 3 per cent of the country's total exports worth $262 billion. These exports included $2 billion worth of cotton to China. "Moreover, 60 per cent to 70 per cent of Indian APIs (active pharmaceutical ingredients) for its pharmaceutical industry are from China," Xie said. APIs are critical for manufacturers to develop drugs. The campaigns for a boycott of Chinese goods come amid growing tensions between the neighbours. Earlier this week, China protested a visit by the US ambassador in India, Richard Verma, to Arunachal Pradesh, which Beijing claims as part of its territory. The Arunachal government had earlier this month also invited the Dalai Lama to visit the state next April, an invitation the Buddhist leader has accepted. The Dalai Lama had visited Arunachal in 2009, when the UPA was in power at the Centre. Beijing had in 2009 protested against the Dalai Lama's visit and is expected to object this time too.But the Indian foreign ministry today indicated it was not willing to block the spiritual leader's visit. "He (the Dalai Lama) is absolutely free to travel to any part of the country," foreign ministry spokesperson Vikas Swarup said. "He has visited the state in the past as well and we see nothing unusual if he visits again." Swarup had also defended Verma's visit to Arunachal.