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Moneycontrol

Can  India  hurt  China  without    hurting  itself? 

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After the deadly clash in Galwan, matters have moved beyond a boycott of Chinese goods but can India impose a cost on China without damaging its economic prospects?

Investments coming from China face a virtual lockdown, 59 Chinese have been banned, projects put on hold, contracts scrapped and goods from that country are piling up at the ports, awaiting clearance. The violent clash in the remote Himalayan valley on June 15 that left 20 Indian soldiers dead has triggered the worst confrontation between the two countries since they went to war in 1962. Disengagement along the Line of Actual Control seems distant but India has begun decoupling from China, its biggest trading partner, economically. India’s retaliation is brave considering that it depends on China not only for consumer goods but also for intermediate and capital goods ranging from pharmaceutical ingredients to specialist machine tools. There is bound to be a period of difficult adjustment as domestic firms pick up production of Chinese goods that will no longer be available.

The  Chinese  connection 

From the fixtures that light up our homes to smart TVs that bring the world to us to those delicate vases that brighten up the shelf-- there is a Chinese hand everywhere. Carpets, wall tiles, picture frames, even souvenirs bear Made in China stamp. The Asian giant enjoys huge economies of scale, dwarfing even its most powerful rivals.

made in china
Sofa (Fabric from China)
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Smartphone (Of Chinese make)
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Coffee table (Imported from China)
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Soundbar (Imported from China)
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Smart TV (Screen Made in China)
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Ceiling Light (Made in China)
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Vase (imported from China)
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China is India’s biggest trading partner, with bilateral trade amounting to $103.5 billion during April 2019-February 2020. The trade, however, is heavily skewed in favour of the neighbouring country that accounts for 18 percent of India’s imports and only 9 percent exports. Chinese companies are also big investors in Indian startups, which has not only created a new class of entrepreneurs but also given India the much-needed technological push, generating jobs along the way.

Indian  companies’  China  play 

Tata Motors
01

Tata Motors

The company operates in China through Chery Jaguar Land Rover Automotive Co Ltd (CJLR), which is a 50:50 joint venture between China’s Chery Automobile Company Ltd and the Indian automaker-owned Jaguar Land Rover (JLR). China accounts for 25-30 percent of JLR’s total sales.

02
Vedanta
02

Vedanta

The Anil Agarwal-owned firm is a global commodity player, with exposure to metals, mining and oil & gas. According to its fiscal 2019 report, the company’s China operations accounted for Rs 3,787 crore in sales, which is more than 4 percent of its consolidated revenue of Rs 90,901 crore.

Motherson Sumi Systems
03

Motherson Sumi Systems

India’s largest automotive wiring harness company operates in China through its subsidiary SMR (Samvardhana Motherson Reflectec). SMR is focused on developing, producing and distributing rear-vision systems for the international automotive industry. MSSL China business also includes PKC, which is focused on the truck market. MSSL had acquired Finland’s PKC Group Plc for around €571 million in March 2017.

04
Sundram Fasteners
04

Sundram Fasteners

The TVS group company manufactures high-precision components used in automobile, windmill and aviation sectors. It is the first engineering company from India to set up a manufacturing facility in China.

Mahindra & Mahindra
05

Mahindra & Mahindra

M&M manufactures and sells farm equipment and cars in China. In 2017, India’s biggest tractor maker sold its 51 percent stake in China’s Yueda Yancheng Tractor to set up its facility with a focus on farm equipment business. The China venture is in line with the company’s plan to generate at least half of its business from international markets.

06
Sterlite Technologies
06

Sterlite Technologies

The leading global optic fibre player that also caters to Chinese telecom operators through a manufacturing unit. According to the management and its annual report, while less than 5 percent of Sterlite’s revenue comes from China, a lot of its global supplies come through the Chinese facility.

Infosys
07

Infosys

The Indian giant offers consulting and IT services in China through its various subsidiaries. Prominent among those are Infosys Technologies (Shanghai) and Infosys Technologies (China). Infosys China is listed among the Top 10 Global Service Providers by the China Council for International Investment Promotion. The company boasts of a 15-acre campus with a seating capacity of 8,000 employees in Shanghai.

08
Dr. Reddy’s Laboratories
08

Dr. Reddy’s Laboratories

The Hyderbad headquartered pharma company operates in China through its JV with the Rotam Group of Canada. The entity has a presence in neurology, dermatology, gastroenterology and endocrinology segments. Dr Reddy’s key strategy is to extend its regulatory approved US portfolio to China. Last year, it won a tender for olanzapine, an antipsychotic drug, in the Centralized Drug Procurement programme, a first for an Indian generics company in China.

Aurobindo Pharma
09

Aurobindo Pharma

The US-focused company is major player in injectables which is looking to expand into China through joint ventures and subsidiaries. Last year, the company announced a joint venture with Shanghai LongJin Investment Company for the manufacturing and sale of pharmaceutical products in China.

10
Adani Group
10

Adani Group

Gautam Adani-owned multinational conglomerate supplies coal to China from its India and global mining operations. The group also deals with the Chinese firms on the business front. For the group company, Adani Ports, China is an important market due to the growing importance of trade logistics.

Time for bold decisions and bold 
investments. It is time to prepare a 
globally competitive domestic 
supply chain.

Time  for  bold  decisions  and  bold    investments.  It  is  time  to  prepare    globally  competitive  domestic    supply  chain. 

Xiaomi
01
Xiaomi

In terms of individual brands, Xiaomi is the largest player in the Indian smartphone market with a share of about 30 percent. Through its retail model, the Chinese company has developed a deep franchise in India and has dedicated stores and service centres. A few months ago, it launched its online lending service MiCredit.

Vivo Electronics
02
Vivo Electronics

A subsidiary of Chinese giant BBK Electronics, Vivo Electronics has about 17 percent share in India’s smartphone industry. It posted annual revenue of close to $1.5 billion in FY19. In India, the company’s operations include an assembly line in Uttar Pradesh’s Noida.

Oppo Electronics India
03
Oppo Electronics India

Another subsidiary of BBK Electronics, Oppo is another smartphone player in India. The company is in the process of setting up a manufacturing base in the country and plans to invest close to $250 million over the next few years. In the year 2018-19, it generated a revenue of around $1.8 billion.

Fosun India
04
Fosun India

The healthcare company is into research, manufacturing and trading of pharmaceutical products. The Chinese firm hogged the headlines when it acquired Hyderabad-based Gland Pharma, a leading company in the injectables space, picking up a 74 percent stake for $1.09 billion in October 2017. At that time, it was the largest ever Chinese acquisition in India.

SAIC Motor Corp
05
SAIC Motor Corp

One of China’s biggest auto players, the company makes passenger and commercial vehicles. It started off in India by acquiring General Motor’s defunct factory in Halol, Gujarat, with a manufacturing capacity of about 80,000 units. MG Motor India, a unit of SAIC, got a strong response for the Hector sport utility vehicle launched in 2019. The company’s global revenue for 2018-19 stood at $5.9 billion.

Midea
06
Midea

White goods, robotics and other industrial systems are its calling card. Midea has a JV with AC manufacturer Carrier called Carrier Midea India. This JV has a manufacturing facility in Bawal, Haryana and has exclusive rights to manufacture and sell Carrier and Midea brand air conditioners, Midea home appliances and Midea commercial air conditioners.

Haier India
07
Haier India

A wholly-owned subsidiary of Chinese electronics maker Haier Group, the company operates in the consumer goods segment. It has been expanding its portfolio which includes washing machines, refrigerators, water heaters, AC and television. It has a manufacturing facility in Pune and is in the process of setting up another unit in Uttar Pradesh. Globally, it generated a revenue of $12.4 billion in 2018-19.

Dongfang Electric India
08
Dongfang Electric India

A subsidiary of Chinese major Dongfang Electric Corporation, the company was set up in 2008 in Kolkata and engages in electrical equipment, spare parts, boiler, turbine and other equipment and devices.

Trade  between  India and China

Exports to China

FY 2019 Exports
Organic
Chemicals
Rs Crore

22,760

% Share

19.4%

FY 2019 Exports
Mineral
Fuels
Rs Crore

22,760

% Share

19.4%

FY 2019 Exports
Cotton
Rs Crore

12,444

% Share

10.6%

FY 2019 Exports
Mineral
Ores
Rs Crore

8,572

% Share

7.3%

FY 2019 Exports
Plastic
& Articles
Rs Crore

5,791

% Share

6.6%

FY 2019 Exports
Nuclear Reactors
& Machinery
Rs Crore

5,094

% Share

4.9%

FY 2019 Exports
Aquaculture
Rs Crore

5,094

% Share

4.9%

FY 2019 Exports
Building
Materials
Rs Crore

4,757

% Share

4.1%

FY 2019 Exports
Electrical Machinery
& Equipment
Rs Crore

4,071

% Share

3.5%

FY 2019 Exports
Animal Or
Vegetable Fats
Rs Crore

4,071

% Share

3.5%

next: Mineral Fuels

Imports from China

FY 2019 Imports
Electrical
Machinery
Rs Crore

22,760

% Share

19.4%

FY 2019 Imports
Nuclear
Reactors
Rs Crore

93,617

% Share

19.0%

FY 2019 Imports
Organic
Chemicals
Rs Crore

60,082

% Share

12.2%

FY 2019 Imports
Plastic
& Articles
Rs Crore

19,039

% Share

3.9%

FY 2019 Imports
Fertilisers
Rs Crore

14,412

% Share

2.9%

FY 2019 Imports
Articles Of
Iron Or Steel
Rs Crore

12,165

% Share

2.5%

FY 2019 Imports
Medical
Equipments
Rs Crore

12,165

% Share

2.5%

FY 2019 Imports
Auto
Components
Rs Crore

10,636

% Share

2.2%

FY 2019 Imports
Other
Chemical Products
Rs Crore

9,951

% Share

2.0%

next: Nuclear Reactors
Chinese 
investors in Indian startups and their investments 

Ant Financial/Alibaba

One of the most prolific Chinese investors in India, Ant Financial, the fintech arm of the Jack Ma-owned Alibaba Group, has pumped millions of dollars in Paytm and Snapdeal. It has investments India across seven companies. Within Paytm, it has separately...

$ 2.7 billion

Tencent

Tencent is another aggressive investor in the Indian startup ecosystem. It has backed unicorns like Flipkart, Swiggy and Ola. In China, Tencent runs an instant messaging platform WeChat, which is their equivalent of WhatsApp, and a host of gaming apps and...

$ 2 billion

Shunwei Capital

Shunwei Capital has led multiple rounds in Indian startups like food delivery giant Zomato, social commerce startup Meesho, messaging app Sharechat and lending platforms Krazybee and Loantap. It has investments in some 17 companies.

$ 129 million

Fosun Group

Founded in 2013, Fosun RZ Capital is fast emerging as an interesting Chinese investor in India. It has invested in 12 Indian startups, with some late-stage investments like in Ixigo and Delhivery and some early-stage ones like LetsTransport, Mylo and...

$ 85 million

Xiaomi

Popular smartphone maker Xiaomi has also been an active investor in the Indian startup ecosystem. It has led rounds in Sharechat, lending startup Krazybee and few others. Back in 2018, Manu Kumar Jain, its top India executive, said the company was looking...

$ 61 million

Hillhouse Capital

An investor in Baidu, Tencent, Grab Airbnb and others, Hillhouse Capital has stakes in seven companies including Swiggy, Udaan and Cred. Started in 2005, Hillhouse has been active in the mobility segment. In 2014, it invested $50 million in online...

$ 165 million

Most popular Chinese apps banned in India 

TikTok

Perhaps one of the most popular Chinese apps in India is TikTok. It is a short video app mainly meant for entertainment and has shot up in popularity in India over the last few years. It is owned by Chinese tech giant Bytedance.
USERS1 billion

UVideo

A popular Chinese video sharing app, developed by a Beijing headquartered company. It has more than 50 million downloads globally with 10 million downloads in April 2020. It is a major competitor for TikTok in China.
USERS 50 million

Helo

USERS 100 million
Another video sharing app which competes with TikTok is Helo. It has more than a 100 million downloads on the app store. Helo was launched by Bytedance the owner of TikTok specifically for the India market targeting the regional entertainment content segment.
USERS 100 million

Club Factory

USERS 40 million
This is an online shopping app which has its headquarters in Hangzhou China. The platform is popular because of the deals and discounts that it offers.
USERS 40 million

UCBrowser

Chinese web browsing app UC Browser gained popularity in India with the explosion of Chinese smartphones in the country. It is owned by a company UC Web which is in turn owned by Alibaba.
USERS 500 million

Shareit

A file sharing application extremely popular in India. Its major use case is sharing large sized files like movies pictures etc. between smartphones directly. The biggest positive is it is much faster than Bluetooth.
USERS 1 billion

CamScanner

It turns the mobile phone camera into a scanner and is used extensively for scanning official documents.
USERS 100 million

Trading Post 

75% of the smartphones sold in India are made by Chinese companies. The number of smartphone users in India is expected to rise by 84% to 859 million by 2022 from 468 million in 2017, a study has said.

75% of the smartphones sold in India are made by Chinese companies. The number of smartphone users in India is expected to rise by 84% to 859 million by 2022 from 468 million in 2017, a study has said.

China accounts for 67% imports in electronic components sector (market Size Rs 5,300 billion). Semiconductors and integrated circuits, which are the heart of modern electronic devices, are among the components that India buys from China.

China accounts for 67% imports in electronic components sector (market Size Rs 5,300 billion). Semiconductors and integrated circuits, which are the heart of modern electronic devices, are among the components that India buys from China.

67% of India\'s active pharmaceutical ingredients (APIs) come from China. India imported $2.6 billion worth of these chemicals during the April-Dec’19 period. Of this, $1.8 billion worth of APIs came from China.

67% of India's active pharmaceutical ingredients (APIs) come from China. India imported $2.6 billion worth of these chemicals during the April-Dec’19 period. Of this, $1.8 billion worth of APIs came from China.

45% percent of consumer durables imported to India come from China. The sector is estimated to be around Rs 763 billion ($11.2-billion in FY19). AC, refrigerators and televisions lead the pack.

45% percent of consumer durables imported to India come from China. The sector is estimated to be around Rs 763 billion ($11.2-billion in FY19). AC, refrigerators and televisions lead the pack.

18% of India’s auto components come from China. India’s auto component market is worth Rs 3,590 billion ($53-billion). India companies are stepping up but cost is a big factor favouring the Chinese.

18% of India’s auto components come from China. India’s auto component market is worth Rs 3,590 billion ($53-billion). India companies are stepping up but cost is a big factor favouring the Chinese.

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