The demand to boycott Chinese products grows but for Chinese companies, it is business as usual. China's grip over India's supply chain continues to remain tight and the situation is not changing soon. However, India could find solace from the fact that its rural market is now throwing the signs of economic revival.
The Chinese brands in India remain unperturbed by the growing calls of boycotting their products. E-commerce sites have not registered any dip in sales of Chinese smartphone and electronic products.
Xiaomi, within a day, sold out all the laptops it launched on self-owned on its platform Mi.com. Oppo went ahead and launched its 5G offering the X2 Pro and OnePlus is set to launch new smart TVs in July as per their original schedule.
Despite the frequent skirmishes at the border, China continues to be among the largest trading partners of India. Not just that, the trade deficit (the difference between the net exports and net imports) between both countries has kept on increasing.
China is the top importer to India with a share of 17.60% to total imports. On the other hand, India's export to China is only at 8.60% of its overall tally. Ironically, organic chemicals, fertilizers, auto components and steel sectors continue to form a major chunk of imports where India has enough built-in capacity and expertise.
Rural indicators are turning positive:
While India's overall consumption dealt with a major blow during the lockdown, rural consumption is expected to recover with a strong Rabi/Kharif crop season.
Central government's rural-focused approach with a higher allocation to MGNREGA. Soon to be launched Garib Kalyan Rojgar Abhiyaan is also expected to increase employment and rural income.
Monsoon has also stayed on course so far with its early arrival to North India. Significantly, the IMD has predicted more than 100% rainfall in the country this year.
Urban consumption on the other hand is expected to remain weak until the infection rate starts falling. Large population continues to fret over job uncertainty and health concerns. They are expected to restrict their expenses to the bare minimum.
Key takeaways:
Chinese influence on India's economy is not getting over soon. At least, India could take solace from the fact that signs of economic distress are now abating. With the monsoon advancing ahead of the schedule, the rural economy is surely picking up. (Tractor sales in May was the first point indicator).
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