Contrary to the government’s claims, China is increasingly controlling the trade and economy in India, pushing goods and services, evading taxes, building supply chains, pushing workforce, grabbing land, linking sea routes to encircle India and even diverting international water resources. All these have been possible in the absence of a comprehensive China policy on India’s part to seriously restrict China’s bid to control India’s both economy and frontiers. Too many Indian ministries and their departments work directly or indirectly with Chinese interest groups, almost all independently, giving China an upper hand in its dealings with India.
While a comprehensive Chinese policy framework and regulatory system control India-China relations, India has no such system to prevent Chinese trade and economic expansion and geo-political moves harming this country. This could possibly explain how India’s trade growth with China (driven by large imports) in 2021 could breach all records with regard to India’s international trade with traditional partners, including the US, UAE, Saudi Arabia, Iraq, Switzerland and South Korea. India’s imports from China in 2021 amounted to nearly US$95 billion. According to China’s General Administration of Customs (GAC), the India-China bilateral trade reached US$114.263 billion, up 46.4 percent year-on-year from January to November 2021. India’s trade with China was only with US$2.92 billion in 2000.
It was a year of record trade and import from China amid frozen India-China relations over Ladakh and Arunachal Pradesh borders. Surprisingly, India’s commerce and industry minister Piyush Goyal said that there was no extraordinary increase in trade with China. The minister’s remarks came days after Congress spokesperson Gourav Vallabh criticised the government saying that while China was renaming places in Arunachal Pradesh and setting up villages in Indian territory, the government was still carrying on with a100-billion-dollar-plus trade with China. Did the Union Cabinet discuss the alarming growth of imports from China at a time when the prime minister, defence minister, external affairs minister and home minister are individually expressing concern over China’s strategic expansion in the region. Are trade and economy outside India’s purview of its strategic interest? Is the union finance minister concerned about the latest report on massive tax evasion, estimated to be close to Rs.5,500 crore, allegedly by three Chinese mobile companies — Xiaomi, Oppo and OnePlus— right under the nose of the income tax department?
The questionable practice by Chinese firms must be going on for years. According to reports, searches were conducted by the ministry’s directorate of revenue intelligence (DRI) at the premises of Xiaomi India, leading to the recovery of incriminating documents that indicated Xiaomi India was remitting royalty and licence fee to Qualcomm USA and to Beijing Xiaomi Mobile Software Company, under contractual obligation. DRI had searched the factories of Foxconn India’s unit, Bharat FIH, and Dixon Technologies in South India. Bharat FIH and Dixon are contractual manufacturers for Xiaomi. Over 20 premises in the National Capital Region, Mumbai, Rajkot and Karnataka linked to Oppo and Xiaomi were searched by the tax department along with the offices of OnePlus. Two Chinese chambers in India promptly reacted against the tax investigations and urged the government to change its “tax probe practice” and create a “non-discriminatory business” environment for Chinese firms. In the past, the Chinese authorities had arrested several Indian businessmen in China apparently for their unacceptable behaviour in dealing with local people. A Chinese foreign ministry spokesman had hoped India would “positively educate” its nationals doing business in China to abide by the Chinese laws with honesty and operate legally.
Chinese firms have made a massive inroad into India’s security sensitive smartphone market. Lately, India’s Central Reserve Police Force (CRPF) issued new guidelines for smartphones and mobile phones, prohibiting those storing and recording data in “high sensitivity” areas, including those accredited for the processing, handling or discussion of classified information in real-time, conference halls and operations rooms. The latest Counterpoint data report on India’s smartphone market share for the third quarter (July-September), 2021, shows that four Chinese firms — Xiaomi, Vivo, Realme and Oppo — together control over 60 percent of the country’s nearly Rs.2-trillion smartphone market.
South Korean Samsung’s share was 19 percent. Is the home ministry, which controls CRPF, concerned? What about India’s defence and external affairs ministries? What did the union cabinet do all these years to ensure that such a data security sensitive market is not vastly dominated by suppliers from China? No other major economy has allowed Chinese firms to dominate its smartphone market. In Japan, Apple is the single biggest smartphone brand sharing 47 percent of the market. Samsung and Apple together dominate the German market. The same is the case in France and the UK. In the US, Apple and Samsung share 80 percent of its market. Apple and Samsung together share over 50 percent of the Russian market.
With China becoming an increasing threat to India, its economy can’t stay secured in Chinese hands. Chinese firms are being allowed to constantly invading almost all areas of market and industry, not sparing even the small-scale, cottage and village industries. Soon it may control river waters and agriculture in India. China is building several dams on the upper reaches of the river Brahmaputra (Tsangpo in China) which will strongly hit agriculture and water resources in India’s north-east region. China is involved in international water disputes with countries such as Laos, Cambodia, Thailand and Vietnam.
China’s expanding sphere of geo-political interest in the Indian Ocean region and increasing grip over some of the key deepwater ports such as Hambantota (Sri Lanka), Chittagong (Bangladesh) and Gwadar (Pakistan) around India are a matter of big concern. The giant Hambantota port, a China-Sri Lanka joint venture, has been privatised and is practically controlled by China Merchants Port Holdings. On the power front, the US state department blames China for standing in the way of India’s bid to expand India’s nuclear energy generation. India has not been able to secure membership of the Nuclear Suppliers Group because of China’s veto.
India’s constant geo-political and economic frictions call for a strong and comprehensive China policy. Instead, key ministries such as external affairs, defence, home, finance, industry and trade, telecommunications and surface transport seem to be all operating in silos to make silent Chinese invasion in critical areas easier. This explains the telecom ministry’s yet uncertain attitude towards China’s controversial Huawei and ZTE which are desperately trying to supply 5G equipment to carriers such as Jio Infocomm, Bharti Airtel and Vodafone Idea and state-run MTNL. Delhi is yet to implement any type of official ban on the Chinese companies, which currently supply a significant amount of equipment to India’s mobile providers. India is the world’s second-biggest market by number of cellphone users. It’s time that India makes a clear and comprehensive China policy for the benefit of both the nations. (IPA Service)