New Delhi: Imports from China are expected to continue for the time being till other feasible and cost effective alternatives emerge. This is the opinion of top players in Indian automobile and pharmaceutical industries.
In the very recent past 20 Indian soldiers lost their lives in a violent clash with Chinese troops in the Galwan Valley region of Ladakh. Since then there has been a call from various quarters to cut imports from the neighbouring country.
Indian auto and pharma industries import several critical components and raw materials from China. Currently, companies based out of China continue to be the leading suppliers of automotive components for India. In 2018-19, India imported auto components worth USD 17.6 billion. Out of which 27 per cent worth USD 4.75 billion were from China.
Maruti Suzuki India chairman RC Bhargava explained the reasons behind importing auto components from China. “Either the product is not made in India, not available. Also what is made in India does not provide the desired quality, or the product made in India is too expensive. Then China comes into the play,” said Bhargava.
“Unless we find alternative sources of imports and which do not raise the prices imports will continue. Remember the price of imports, ultimately who pays for it? Consumers. So, the same people who are boycotting have to remember an important fact. In some cases it may lead to their being asked to pay more for the same product,” added Bhargava.
Similarly, Automotive Component Manufacturers Association of India (ACMA) director general Vinnie Mehta said the industry has started to take steps towards ‘deep localisation’ in order to de-risk business from Chinese imports.
“There is no denying that the industry needs to be ‘Atma-Nirbhar’. The industry and the government should together define a roadmap and deliver accordingly,” Mehta noted.
Ease of doing buisness, capital availability at lower rates and globally competitive logistics and energy costs are some of the prerequisites that the government should look into to ensure growth of the domestic auto component industry, Mehta said.
Mehta however stressed on continuing with the imports till other alternatives emerge for the industry. “Post the lockdowns, our value chains, including automotive, have been severely disrupted and are in disarray, we are gradually piecing them together. Any further disruptions would only be detrimental to the interest of industry and the economy,” Mehta said.
The major component imports from China include drive transmission and steering parts, electronic and electrical items, cooling systems, suspension, and braking parts, among others.
When asked to comment on the pharma sector, India Pharmaceutical Alliance (IPA) secretary general Sudarshan Jain said India imports some critical APIs and intermediates from the neibhouring country, owing to competitive advantages set through incentivisation and subsidies in China. He, however, added that the government has addressed the need to reduce import dependence by bringing in the bulk drug and medical devices policy.
“The approved scheme will promote bulk drug parks for financing common infrastructure facilities in three such facilities with the financial investment of Rs 3,000 crore in the next five years,” Jain said.