India Bans Import Of Chinese Mobiles, Milk Over Quality Concerns And Increasing Trade Deficit

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2:18 pm 26 Apr, 2016


Things are souring between India and China both on the political and the economic fronts.

Days after the controversy generated after India’s issuance of a visa to Uyghur leader Dolkun Isa, which was subsequently cancelled, New Delhi has now banned the import of electronic items, mobile phones, milk and milk products and some steel products from China.

The Indian Government contended that the ban on the items are due to concerns over their quality and safety.

Union Commerce Minister Nirmala Sitharaman informed the Lok Sabha on Monday.

 

Nirmala Sitharaman Poster

 

India has declared that mobile phones not bearing the International Mobile Station Equipment Identity (IMEI) number or other security features cannot be imported from China.

This will not have any impact on most mobile phones.

China is the factory of nearly every major mobile phone maker in the world, including giants such as Samsung and Apple. Chinese handset maker Xiaomi will also not be impacted due to the ban. Even India’s own Micromax manufactures phones in China.

 

Currently most Micromax phones are made in China. The company plans to shift manufacturing completely to India by 2018. News18

Currently most Micromax phones are made in China. The company plans to shift manufacturing completely to India by 2018. News18


The most important reason why India put a ban on Chinese products is to counter the increasing trade deficit.

India’s trade deficit with China stood at USD 48.68 billion during 2015-16 (April-February) and the total bilateral trade was USD 65.16 billion during the period.

 

The huge trade deficit is because China manufactures nearly everything in the world which it then exports to expanding markets such as India’s.

On the other hand India merely exports raw material such as raw cotton and cotton yarn, petroleum products, iron ore, copper and metal products, and spices.

 

Chinese products are so cheap that the middle class in India gravitated towards them leading to India’s own SMEs taking a hit. Despite their spurious quality and safety concerns, Chinese firecrackers too have made inroads into India.

In 2015, the Food Safety and Standards Authority of India decided to continue its 2008 ban of Chinese milk products because of high melamine contamination in the imported products. Milk products such as chocolate, candies and yoghurt produced in China is consumed in India.

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