India to continue reliance on Chinese parts amid domestic manufacturing push

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India to continue reliance on Chinese parts amid domestic manufacturing push

India to continue reliance on Chinese parts amid domestic manufacturing push

Industry News
Aug 26,24

Imports of personal computers, laptops, and tablets decreased by 3.4% in 2023-24 to $8.4 billion, but China still accounts for about 60% of these imports.

India to continue reliance on Chinese parts amid domestic manufacturing push

As India works to reduce its dependence on Chinese products and investment, government officials acknowledge that the country will still need to rely on Chinese components until it can fully develop its own manufacturing capabilities.

Despite a slight reduction in reliance, China remains a significant supplier. For example, imports of personal computers, laptops, and tablets decreased by 3.4% in 2023-24 to $8.4 billion, but China still accounts for about 60% of these imports. Similarly, key components like camera modules for smartphones continue to come from Chinese suppliers.

In the electric vehicle (EV) sector, the Ministry of Heavy Industries (MHI) is considering easing visa restrictions for select Chinese nationals. This move is in response to requests from Indian EV manufacturers who require Chinese engineers to help produce cost-effective, high-performance batteries for electric two- and three-wheelers.

Although major tech companies like HP and Dell also source products from China, the focus is on increasing domestic manufacturing. The government is implementing measures like production-linked incentives (PLI) and higher duties on certain components to reduce reliance on Chinese imports. The aim is to boost India's manufacturing sector and potentially shift the global manufacturing hub to India.

To address security concerns, stringent rules are in place for Chinese products. Investments from China, and by extension, countries with similar geopolitical concerns, must pass through an inter-ministerial committee for clearance. This process ensures that products from these countries are thoroughly vetted before being allowed into India.

The government's approach includes the automatic route for imports from other countries, but products from countries sharing a land border with India, like China, require government approval. These regulations, introduced in 2020 following the Galwan incident, mandate that Indian joint ventures with Chinese firms must have a majority Indian stake.

In summary, while India is making strides toward self-reliance, the country will continue to depend on Chinese parts and expertise until its domestic manufacturing sector can fully meet its needs.

(businessline)