There are several ways in which the coronavirus outbreak in China has consequences for the Indian economy, directly and indirectly.
One, the lockdowns in Chinese cities – many of which are economic hubs with populations and GDPs equivalent to small countries – affects production and supply worldwide given how integrated China is into the global economy. India is likely to suffer, too – more than half of India’s imports in 19 categories come from China according to a State Bank of India report and 14% of its overall imports. One of India’s top export sectors, pharmaceuticals, for example, depends heavily for key starting material, intermediates and active pharma ingredients from China.
Both the pharma sector and the Indian economy in general have faced a tough year and were only just beginning to show signs of recovery which are now likely to be delayed due to the outbreak in China. The spread of the coronavirus is pushing the world economy toward its worst performance since the 2008 financial crisis. And while the Indian government has declared itself ready with steps to ameliorate the effects on domestic industry, its record so far is not encouraging. Continue reading The Coronavirus Epidemic: Some Economic Considerations for India
India’s refusal to sign up for the Regional Comprehensive Economic Partnership (RCEP) agreement in Bangkok earlier this month says as much about the state of India’s relations with China as it does about its place in the global trading regime.
There is no doubt that India is in many way not ready for the additional challenges and pain its domestic industry and agriculture will face with accession to RCEP especially since the economy is still recovering from the self-inflicted damage of demonetisation in 2016 and a poorly-executed roll-out of the GST less than a year later.
But there is not an insubstantial argument to be made about the consequences of opening up under RCEP to a Chinese economy that still is far from being an open market economy. Continue reading China Worries in India’s RCEP Decision
Pickpockets are not uncommon in crowded places in India. Victims are generally realists and tend to resign themselves to their misfortune quickly often not even bothering to go to the police. Not so, however, actor-turned-politician Manoj Tiwari, head of the Delhi unit of India’s ruling party, the Bharatiya Janata Party. When he lost his iPhone Seven Plus at a demonstration, he promptly complained at the local police station. Politicians in India are often able to get the police to expend extra effort on their behalf, so Tiwari’s response was not really surprising.
What was surprising was the fact that the politician had lost his phone at a protest against Chinese-made goods organized by an affiliate of the BJP’s parent organization, the right-wing hyper-nationalist Rashtriya Swayamsevak Sangh. And as American as Steve Jobs might have been, the iPhone is the quintessential made-in-China product.
Such ironies are a dime a dozen in the India-China relationship. Continue reading The Many Ironies of India-China Economic Relations