If India-China relations deteriorate, economic tsunami could hit every sector, including auto and cosmetics

New delhi date. 23 August 2020, Sunday

Due to the infiltration of Chinese troops in Ladakh as well as violent clashes with Indian troops, India is slowly preparing to give China an economic tweak. Due to which the trade of both the countries is also being affected extensively.

From automobiles, pharmaceuticals to cosmetics, every sector of the business is facing the threat of a major economic blow in the years to come if relations between the two countries do not improve. Import-export experts from India and China say that the greater the economic impact of Kovid-19, the greater the economic crisis will be in the foreseeable future.

To fulfill the dreams of a self-reliant India and Make in India, Union Commerce Minister Piyush Goyal's main focus is to promote domestic production and reduce Chinese imports. It is being discussed by some organizations and institutions in the business sector.

Adverse effect in the automobile sector

A major initiative is being taken in the field of automobile manufacturing. Meetings are being held almost every week on this matter. On August 13, the ministry held a meeting with auto giants. The review meeting sought information from the Society of Indian Automobile Manufacturing on the possibility of investing in the auto sector, dependence on the local level, import-export, payment of royalties.

However, those involved in the automobile sector say that nothing is difficult, but stopping imports of goods from China could be a major economic blow. Taxes and imports will push up the price of goods and have a major impact on the auto industry.

25 percent dependent on China

"About 25 per cent of Indian automobile sector imports goods," said an auto industry official. South Korea is second only to China, but much less dependent on China. This is followed by Germany, and Japan. The main reason is that goods from China are cheaper. The goods come from Korea at about half the price. However, its value increases when it is imported to a European country. However, sources believe that some of the goods imported from China are manufactured by European countries, which are made in China.

Depending on China in terms of packaging of goods

The CMD of the cosmetics company says it has to depend on China for imports of packaging goods. Due to which good quality goods are available at very cheap prices. Which comes from South Korea at half price. European companies have set up companies in China to strengthen their hold on the Asian market. There is nothing wrong with packaging in India yet.