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Can India boycott Chinese goods?

Contrary to the demand for boycott of Chinese goods, India’s imports from China have seen a sharp increase post the Galwan China’s clashes in 2020. Further the economic slowdown in China has reduced its import from India. The January-August 2022 trade data confirms this trend. An unfriendly neighbour challenges the Indian government in terms of its political and security scenarios that may play out in the times to come. India is dependent on imports of critical products and services from China. In 2018-19, 92% of import of rare earth metal by value and 97% by quantity were sourced from China.

Other bulk commodities that India purchases from China include electrical machinery and equipment’s, laptops, nuclear reactors, boilers, organic chemicals, fertilisers, monolithic integrated circuits-digital, lithium-ion, solar cells, urea, etc. On the other hand, in 2021-22, India’s exports to China were only 5% of its total shipments. The most exported commodities included ores, slag and ash, organic chemicals, mineral fuels/oils, bituminous substances, iron, steel, aluminium etc. Light Naphtha was India’s most valued export. 

Critical minerals are mooted as a new base for US-India multilateral collaboration, visible in the “Quad critical and Emerging Technology Working group”, that aims to develop supply resilience among Quad members.

The focus on critical minerals supply chain started after the China-Japan Senkaku-Diaoyu island dispute (2010), followed by a rare-earth embargo imposed by China. US, European Union and Japan are the major importers of rare earths. Due to this the US House of Representatives passed H.R. 761 which declared rare earths an essential for economic growth and national security.

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