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Last updated: 11 Jul, 2017  

Made.In.China.9.Thmb.jpg Impact of cheap Chinese products on the Indian economy

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Biz2Credit Inc. | 11 Jul, 2017
Go to any goods market in India or visit any online retail site, you will find cheap Chinese products everywhere – whether it's electronic gadgets, crackers, decoration items, or other daily consumables, you will find a cheaper Chinese version for almost everything.

Although, these cheap products that usually come at the price of 10-70 percent lower than their original counterparts, help consumers save their hard-earned money; however, they are impelling a negative impact on the Indian economy.

Chinese products are affecting not just the domestic businesses and industrial market, but also the export market of India as many people are replacing Indian goods with Chinese ones. The ‘Made in China’ label has become the most preferred choice in India and other countries due to price factor and availability of huge variety.

Talking about how they are affecting the economy largely is one of the major concerns worldwide. Few points to support the concerns are:

1. Chinese crackers contain Sulphur which is more dangerous that Nitrate and during Diwali, they create a lot of pollution in the country. However, due to their low price, a majority of buyers get attracted to these products and the revenue of the India's domestic cracker industry has to bear the brunt.

2. Apart from crackers, Chinese toys are also impacting the Indian toy industry. According to the ASSOCHAM, the Indian market is full of Chinese toys, so the Indian toy industry is struggling hard to survive. Nearly 40 percent of Indian toy companies have been closed in the last five years, and rest 20 percent are struggling to break even. In fact, the Chinese toy market is the largest in the world. Cheap Chinese products have become the reason for the shutdown of nearly 60 percent of the industrial units in Bhiwandi and Thane.

3. Chinese firms focus on the mass production and consumption strategy, which is the main reason why their products are low cost. On top of that, the Government of China has export-friendly policies, they buy raw material from around the world and sell the end products back to the world.

4. Due to cheap prices, wide availability and huge profit dissemination to the dealers, China has become the second-largest export-focussed country in the world. The unsafe Chinese electronic goods are of inferior quality and do not come with any guarantee or service. These products are not even long-lasting. There are many manufacturers in India that import cheap Chinese goods and then sell them under their own label. China Wireless Technologies has also tied up with India's Reliance Communications to sell their dual-SIM smartphones in the country.

Before it gets too late to act, India must consider taking actions to reduce the import of these cheap and inferior quality Chinese goods to save its MSME units and economy. The government should encourage country's small businesses to reduce the foreign goods and should also bring some serious changes in the policies, infrastructure, technology, and duties to protect the domestic manufacturers from these Chinese goods.

If you as a customer prefer buying cheaper Chinese goods over the Indian ones, it's high time to consider purchasing the Make in India products only.

(Source: Biz2Credit Inc., the Number one Small Business Financing Resource in the US. Views expressed by author are personal)
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Cheap Chinee Goods
Indian. | Fri Jul 14 05:43:06 2017
By going for cheap Chinese goods we finance our enemy and kill our factories. Closure of our Toy factories is a glaring example. Number of Indian companies are outsourcing China and having their products manufactured in China and sell them in India with their logos. It costs them less than producing in India. The present talk about DGCA placing orders for supplying airport security devises that too from a Chinese company that has been black listed by the Government is worth noting.. Yes Chinese goods are cheaper and of better quality. That is why they are sold in almost all the countries. It will be an uphill task for Indian companies to compete with them but then if our companies and economy are to survive India must produce goods that are competitively cheap and are of good quality. This would be possible if people adopt good work ethics, work hard, do not strike work while the companies treat and manage the work force well and above all serious efforts by the Government to curb corruption would bring the cost of production down and improve profit margins and thereby enhanced benefits and salaries to the workforce. The government and particularly the Politicians are guilty by thowing freebees to people. The lower working class have become lazy and demanding. If the Chinese goods are cheaper it should be noted that by and large there is no warranty nor any repairs/ service provided by the Chinese companies in India. Moral: Don't feed the dragon.

Impact of cheap Chinese products on the Indian economy
CS Babel, Indore | Fri Jul 14 04:19:55 2017
what is said is correct. but it is not the Govt. but the people of India have to act. first, for profit businessmen should not Import inferior quality goods. 2nd just it is cheap, the people must not buy the Chinese goods. main problem is poverty, that compells people to buy cheap goods. thus, Indian industry must come up to produce low price goods for mass use.

Impact of cheap Chinese products on the Indian economy
Prabhakar | Wed Jul 12 04:36:16 2017
What you said is absolutely right. Indian government is blind and lethargic in bringing up reforms on this.I do not surprise Government itself must using Chinese stuff while knowing facts. 1. To survive Indian market govt should change policies and strategies. 2.Govt should allow cheap and non standard stuff from China or any country. While knowing our Indian corruption it is not possible. 3. Ultimately, due to foreign exchange deficit or large scale imports, certainly our economy will reach bottom.

This is stupid
Steven | Wed Jul 12 00:46:23 2017
The consumers in India bought the products made in China, because it save cost, China has better and high quality product, but you cannot afford it. The author is very stupid, protection will make your economy much fragile rather than making you better. It's a chance that India can provide something China cannot provide.

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