China is the world’s largest exporter with a total export value of $ 2,210,000,000,000 in 2013. The fast and effective manufacturing and excellently low cost of Chinese products with ‘Made in China’ tag made it harder for the World to ignore the so called ‘Dragon’ any more. The major destinations of the China’s export includes :
- US (16.7%)
- Japan (6.8%)
- South Korea (4.1%)
- Germany (3%)
- Netherlands (2.7%)
- Singapore (2.1%)
- India (2.2%)
- Russia (2.2%)
Indian markets are flooded with Chinese products and offer hard competitions to the Indian manufacturers. From a hairpin to a textile machinery, China is producing anything to everything and filling the Indian market completely with its products. No matter which type of product you are planing to buy, you can easily get the Chinese alternative of that product in quite lower prices.You can observe that the most cheapest products available in any Indian market have ‘Made in China’ tag on it. Whether it is electronic equipments, machinery, Plastic products, organic chemicals, crackers, sports goods or even footwear and clothes. India imported products worth 28025.57 US$m from China in 2013. Lower cost usually attracts huge sales and this is the main reason of success of Chinese goods over the Indian one’s. The domination of the Chinese products even resulted in the closing of various Indian SMEs.
For example, Toys and Co. LTD, a company producing toys and gift items, have been closed down by its owner Mr. Awasthi this year. Mr. Awasthi realized that he is unable to generate even a marginal profit because of the availability of the cheap Chinese products and comparatively high costs of production. Now Mr. Awasthi have open a retail gift shop and have started importing products from China and then selling them.
The pricing of Chinese products is 10-70% lower than the prices of the Indian products. The high cost of production in India creates a problem for the Indian manufacturers and thus force people like Mr. Awasthi to shut down their productions. The Textile Machinery Manufactures Association stated that the textile machines imported from China are though inferior in quality but are about 30% to 50% cheaper than the Indian textile machines.
Closing or reduction in profit of Indian SMEs are not only the issues of concern. The trade deficit that India has to face with China because of the large imports of Made in China products also requires attention. The trade deficit of India with China was $ 31.42 billion in 2013.
The Indian Government and all the related associations need to take some corrective actions to control the domination of Chinese products in India. Required changes in the trade policies and appropriate supports by the Indian government can help in preventing the Indian SMEs from the highly competitive Chinese traders.
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