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The Modi government is irritated by growing private sector imports from China as it combats the PLA’s military challenge.

On May 5, 2020, the Chinese Army launched an offensive on patrolling post 14 in the Galwan Valley in East Ladakh with the aim of controlling the Darbuk-Shyok-Daulet Beg Oldi (DBO) route, which runs parallel to the confluence of the Galwan-Shyok river. On May 17–18, the PLA violated the Chang Chemo sector and Pangong Tso boundary agreements, tossing them all into the trash in the process.

Since that time, the Indian Army and Air Force have stood by, enduring the arctic conditions on the spine of the Himalayas, to meet the Chinese military challenge in East Ladakh and along the 3488 km Line of Actual Control (LAC).

While the Narendra Modi administration has successfully countered the military threat posed by the PLA, it is becoming increasingly frustrated with the Indian private sector for giving Beijing a significant economic leverage to exert pressure on Bharat.

Despite a decline in 2020, a year of transgression and impending war, the bilateral trade deficit between India and China increased daily from USD 37.8 billion in 2014 to USD 101.28 billion in 2022. This is because, despite Prime Minister Modi shouting “Atmanirbhar Bharat” from the rooftops, the Indian private sector prefers to import products like machinery and even furniture from China rather than producing them there. To make conditions more difficult, India’s exports to China have declined in

Some of the biggest names in the Indian private sector are playing footsie with China when it comes to importing manufactured goods from the Communist country, despite the growing trade deficit and its impact on the equally concerned Finance and Commerce Ministries being flagged by national security planners and the Ministry of External Affairs. Behind closed doors, South Block is dissatisfied with the lack of response from the business sector and thinks that only higher import taxes will be able to cut the trade deficit.

Due to increased costs paid as a result of lubricating the bureaucracy in Indian states, the private sector has its own complaints about manufacturing in India. The truth is that manufacturing in Indian states is still difficult because of

Before the Galwan transgressions, in March 2020, a production-linked incentive (PLI) scheme worth 1.97 lakh crore was first introduced with three sectors before being expanded to 11 more. The PLI program now covers advanced chemistry cell battery, IT hardware, automobiles and auto components, pharmaceuticals, telecom and networking products, technical textiles, food products, high-efficiency solar PV modules, white goods, specialty steel, drones and drone components in addition to the large-scale electronics, mobile manufacturing, and medical equipment sector PLI that was introduced in March. The PLI scheme has so far attracted investments totaling 53,500 crore, produced 3 lakh jobs, and increased incremental output totaling 5 lakh crore. The accomplishments are noteworthy considering that the government has only allocated less than 3,000 crore to PLIs for industry thus far.

India is using strict quality control methods for hundreds of items due to its growing trade deficit with China as a result of the dumping of subpar Chinese goods. In an effort to duplicate its success in eradicating subpar toys, primarily imported from China and detrimental to Indian children’s health, the Modi government has decided to include 675 new products under the quality control order (QCO). Even though the move doesn’t target any specific nation because it applies to both domestic producers and imports, the government already notified 387 QCOs after 2014. Helmets, air conditioners, refrigerators, household cookers, cooking gas stoves, safety glasses, footwear, and the wheel rims sector are a few recent examples of such QCO measures.

The moment has come for the private sector to establish manufacturing in India rather than import machinery from China and enhance its leverage over the nation, even if the Modi government is actively working to promote manufacturing in India and reduce the trade imbalance. It may result in lower private sector profits in India, but it will also strengthen India’s strategic autonomy.

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