Red light against hasty decision to stop imports from China

Mumbai, Ta. Monday, June 22, 2020

As the boycott of Made in China products continues to grow, the country's auto and auto component industry is taking the red light against the boycott. In the current scenario, any hasty move against China could prove fatal to any Indian industry that relies heavily on China.

Compared to other countries in the world, China is providing huge competitive advantages. If we talk about India's auto industry, this 150 billion industry gets 10 to 20 per cent of its annual requirement from China.

China is providing competitive advantages in terms of speed and cost, the MD of an auto company said in an interview. Not only is it possible to find an alternative to China in the auto sector, but it is also possible to create facilities at home, but this requires a long-term strategy and therefore, a complete shutdown of trade with China would not be feasible.

Despite 10 per cent customs duty and high logistical costs, some Chinese auto parts are cheaper than in India. This saves companies 15 to 18 per cent in costs. "As an industry, we need to take a strategic step and not a hasty one," said an official of the Auto Component Manufacturers Association.

Any immediate action would be more detrimental to our industry than China. India's import duty on auto parts is estimated at ૭ 16 billion, of which ૫ 2.50 billion comes from China.

India has a long way to go to become self-reliant. The Corona epidemic in China has made it clear that most countries in the world should not depend on a single country for their imports.

He further said that in the current scenario, finding an alternative to China is also difficult for Indian auto companies and the emphasis should be on domestic alternatives.