Can India afford an economic boycott of China?

India is trying to escalate tensions after a fierce clash between Chinese and Indian border guards in the Galvan Valley on June 15. A campaign to boycott Chinese products is underway inside India. According to reports, Indian officials are also considering reducing or stopping trade with China. The question is, if India does that, who will suffer? China or India itself? Let's try to find the answer to this question in the light of facts.

Political factors are behind India's confrontation with China. The Code-19 epidemic is currently spreading rapidly in India. The number of confirmed cases has reached millions. According to experts, the actual number of cases is much higher. Despite this, the Indian government has chosen to continue easing the lockdown. what is the reason? In fact, the Indian economy cannot afford further lockdowns. In such a situation, efforts are being made to reduce the pressure on the government regarding the epidemic by taking confrontation with the neighboring countries. In addition, Indian political parties have a reputation for exploiting nationalism for political gain. Whatever the reasons, intensifying and prolonging the confrontation with China is disastrous for the Indian economy.

In the context of the global financial supply chain, if India boycotts Chinese products, it will have very few options. In that case, India will bring higher prices for its firms and consumers. In addition, some Indian industrial sectors are heavily dependent on supplies from China and have no choice but to cooperate with China.

The Indian economy is already under severe pressure as a result of months of lockdowns. According to India's official data, imports declined by 48.3 per cent in April compared to the same month last year, while exports declined by 33.7 per cent. Foreign direct investment in India was also hit hard in April, falling to  1.3billion from a month earlier, 

according to Trading Economics, which provides data on the global economy. I decreased by 52.5%.

In these circumstances, it is unreasonable for India to escalate tensions or reduce economic ties with China. Because there is a clear difference in the status of the two countries. China has been India's top trading partner for years, while China's exports to India account for about 2% of its total exports. It is not easy for India to ban imports or investments from China under global value chains, as the East Asian countries are interconnected in a highly integrated industrial chain. And such sanctions will inevitably hamper its cooperation with other countries and, in the long run, worsen India's trade environment.

Although India can benefit from full cooperation with China and other Asian countries, economic cooperation requires a harmonious, harmonious and mutually respectful relationship. However, India is currently sabotaging all these manners and standards. India must formulate a sound economic strategy based on a comprehensive review of its capabilities to avoid a catastrophic path. An economic boycott could turn into an economic suicide.