The Narendra Modi government on Friday acknowledged in Parliament India’s growing dependence on China for various goods and said the nation should “realise how we have become dependent on a country which has inimical interests”.
Commerce minister Piyush Goyal’s strong comments came two days after external affairs minister S. Jaishankar said that as long as China continued to try and alter the status quo on the Line of Actual Control, the two countries’ “relationship is not normal”.
Goyal sought to blame the dependency on Chinese goods on the UPA government’s alleged failure to promote domestic manufacturing, although he didn’t take names.
The minister’s comments came while he was replying to questions in the Rajya Sabha on the increasing trade deficit with China.
He said that merchandise exports from India to China had risen from $11.93 billion in 2014-15 to $21.26 billion in 2021-22 while the imports had increased from $60.41 billion in 2014-15 to $94.57 billion in 2021-22.
The financial year 2021-22 had witnessed a sharp jump in Chinese imports — to $94.57 billion from $65.21 billion in 2020-21 — and the trade deficit had consequently catapulted to $73.31 billion from $44.03 billion in 2020-21.
Goyal, however, highlighted how imports from China had skyrocketed more than sevenfold from $7.1 billion in 2004-05 to $51.03 billion in 2013- 14, referring to the 10-year period of UPA rule but not mentioning the rival by name.
The trade deficit with China was $1.48 billion in 2004-05 but had leapt to $36.21 billion by 2013- 14, he said. The minister said India used to be a proficient manufacturer in several sectors, such as that of active pharmaceutical ingredients (API).
“We used to export to the world. Sadly we gave up that entire industry to China. Over 10-12 years, India lost competitive strength in very critical areas,” he said, appearing to allude to the UPA years.
“Therefore this government is focused on (the) Make in India initiative. While, of course, with economic growth and prosperity, demand for goods is increasing. We do not have sufficient capacity as yet in India to meet this demand for goods and services.”
Again alluding to the UPA years, Goyal said: “A lot of capital goods industry got killed in that 10-year period. And because of which, for a lot of capital goods, electronic goods where we never promoted our industry, for all we became dependent on Chinese products.”
Congress member Jairam Ramesh interrupted him and said the minister should give brief answers.
Goyal shot back: “I hope you are not holding a plea for somebody who is dumping goods into India. It is important the country recognises and realises how we have become dependent on a country which has inimical interests and how this government through a number of initiatives today focuses its attention on promoting Make in India.”
Goyal said the government had introduced Production Linked Incentive (PLI) schemes to support domestic manufacturing in various areas, including semiconductors, and reduce imports from China.
He said India used to import almost 100 per cent of its mobile phones, and had just two plants that made the handsets. Now the country had over 200 companies in the mobile phone sector thanks to the PLI scheme.
