External affairs minister S Jaishankar on Friday emphasized the importance of Indian companies gradually reducing their dependence on Chinese imports and shifting towards local procurement.
Speaking at the industry body Confederation of Indian Industry’s (CII) annual business summit, Jaishankar highlighted the need for caution in business relations with China, despite ongoing trade.
“If peace and tranquillity in the border areas are disturbed, would you do business with someone who has barged into your turf? If a country has gone back on written agreements and is doing something on our borders, how can we then say that the business world will continue as normal,” Jaishankar said.
Jaishankar flagged the long-standing trade imbalance between India and China, noting that Indian businesses often prioritize cost over other factors. “The second issue for us, built over the last 20 years, is the trade imbalance (between India and China). And here we have a problem with the business community of India, which is still making choices based on the price points,” he added.
Acknowledging the difficulty of immediately stopping dependence on Chinese imports, Jaishankar urged Indian businesses to focus on local sourcing in the medium to long term. “We will have to encourage production in India while encouraging sourcing locally. It’s going to be long and painful because we are making up for 20-30 years of neglect (in manufacturing),” he said.
The government has been promoting the Make in India initiative to encourage domestic manufacturing and investment.
Jaishankar highlighted the importance of considering national security in business decisions, particularly in relation to China. “So, where (sourcing from) China is concerned, we encourage people in this country to manufacture locally, source locally, and procure (locally),” he said, urging Indian companies to adopt a long-term perspective on this issue.
Bilateral trade between India and China has remained robust, with total trade reaching a record $118.4 billion in fiscal year 2024 (FY24), according to data from commerce ministry. However, there is a significant trade deficit, with Indian exports to China valued at $16.67 billion and imports at $101.75 billion.
Jaishankar also addressed the impact of global geopolitical conflicts on the economy, citing the ongoing Ukraine conflict, tensions in West Asia, and disruptions caused by wars, sanctions, and climate events.
“What is the reality we are staring at?…The world is experiencing a 3F, crisis of fuel, food, and fertilizers…Terrorism and extremism have started to consume those who have long practiced it. In many ways, we are going through the perfect storm,” he said.
Jaishankar concluded by emphasizing India’s approach to foreign policy, balancing national interests with global responsibilities.
“Amid these, it is this judicious combination of ‘Bharat First’ and ‘Vasudhaiva Kutumbakam’ that defines our image as Vishwa Bandhu,” he added.
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Published: 17 May 2024, 05:51 PM IST
