Y hike import duty or impose ADD/CVD or use Safeguard Duty or Technical Barriers to Trade ? dindooohndoo
That will add to Indian Input Costs,and bankrupt several industries,and then the banking !
If PRC exports to India,are USD 100 Billion and duty is hiked by 20% - then 20 billion USD of profits,of Indian companies are gone.In addition,the supply chain of those user industries (of Chinese inputs),will also be wiped out,on upstream (suppliers of materials and inputs to Indian entities, which import Chinese materials) and downstream (users of Indian products made, from Chinese inputs) as they will either not offer cost reductions,or not absorb cost hikes !
On a duty hike of 20%,on Chinese exports,to India of 100 Billion - at least 150-200 Billion USD of Indian entities will be destroyed - asssuming a material sales ratioj of 50%.Add to that the impact on the upstream and downstream supply chain - which is another 150-200 Billion USD.If 400 Billion USD of Indian sales are wiped out - it is safe to assume that the Debt to Sales ratio is say 0.25:1,and so USD 100 Billion of bank and other debt will be NPA.
Then you come to the retail imports - phones,Tvs,Toys etc.That will wipe out the entire retail trade as INDIANS WILL NOT PAY HIGHER PRICES OF INDIAN SUPPLIES.That is disaster in the unorganised finance market - Nidhis/NBFCs/Chit Funds - all will go bust.This will also impact the unorganised working capital credit to SMEs.
Y not also impose an Export tax on exports to PRC. Again a dead end - as PRC will import from elsewhere.
Y not ban Chinese flag ships from Indian Ports - No problem - PRC will do the same from PRC and HK and some African Ports.
Y not ban PRC from all infrastructure projects ? Sad ! All Indian Infra companies are bankrupt - including those making toilets !
India needs PRC.
PRC could short Indian paper and securities,in the NASDAQ/NYSE or short the INR,in the NDF or just kick out the Indians,from HKSAR - now PRC.It Could also kick out the Indians from many nations in Africa - Idi style ! I pray for Idi !
It is certain that PRC will use the Taliban and Pakistan,based marine/maritime outfits - in the next phase.The Problem with the Indians,is that they THINK that they have the PRC jugular - In Malacca and the shallow waters,in the waterways,through Malacca,which can spot PRC Nuke Subs and Diesel Subs.
Sweet Dreams are made of this !
India has no options ! The PRC will now enter the whole of the North East
India cannot handle Nepal - they could not stop them from changing a map - how will they handle PRC.Indians still have not perfected the art of making galvanised steel - how will they re-take Galwan ?
Just handover Ladakh,Sikkim and Arunachal to the PRC
And then back to Cow piss Cola !
In the next phase,I expect PRC to use Tibetans in the PLA on the Indo-Chinese border and the Nepali midgets on the Indo-Nepal - to turn the Tibetans and Nepalis against India and Indians
The Mongols are the master race of South and East Asia - that is a historical and scientific fact
Agree with the author that we need the China economic model to grow internally but totally disagree that we decouple economy from security internally and that the border conflicts can take care of themselves and the PLA can kill 50 more soldiers but the India-China economic relations should keep on expanding. Not only this is what exactly the Chinese want and have been practicing and getting away with it for a long time, this very notion coveys a ridiculous sense of sanctimonousity where in the vision is only as far as the nose can be seen!!!!
Appreciate your response, Pankaj. As I wrote, I dont disagree that there needs to be a response that would deter future behavior. My framing is around cost-benefit, and highlighting the potential high cost to Indians of responding in the economic domain, through so-called economic decoupling. Ultimately China is most threatened by an economically strong India. As you say, 'we need the China economic model to grow internally', one part of that model is deep ties with all the big powers- from US to Japan, despite major differences from political to security.
Agreed, its not the way to go, i wholeheartedly stand by your opinion and appriciate the research and dedication put fourth on these newsletters 👍🏼
The Indians plan to reduce Chinese imports as a punishment to the PRC !
https://theprint.in/diplomacy/india-working-to-restrict-chinese-goods-investments-since-before-galwan-covid-officials/445017/?unapproved=452208&moderation-hash=0aeed579748d9d25b433fb9daaf51c6a#comment-452208
This is all bunkum!
If Chaiwala is serious - ban all PRC imports !
Y hike import duty or impose ADD/CVD or use Safeguard Duty or Technical Barriers to Trade ? dindooohndoo
That will add to Indian Input Costs,and bankrupt several industries,and then the banking !
If PRC exports to India,are USD 100 Billion and duty is hiked by 20% - then 20 billion USD of profits,of Indian companies are gone.In addition,the supply chain of those user industries (of Chinese inputs),will also be wiped out,on upstream (suppliers of materials and inputs to Indian entities, which import Chinese materials) and downstream (users of Indian products made, from Chinese inputs) as they will either not offer cost reductions,or not absorb cost hikes !
On a duty hike of 20%,on Chinese exports,to India of 100 Billion - at least 150-200 Billion USD of Indian entities will be destroyed - asssuming a material sales ratioj of 50%.Add to that the impact on the upstream and downstream supply chain - which is another 150-200 Billion USD.If 400 Billion USD of Indian sales are wiped out - it is safe to assume that the Debt to Sales ratio is say 0.25:1,and so USD 100 Billion of bank and other debt will be NPA.
Then you come to the retail imports - phones,Tvs,Toys etc.That will wipe out the entire retail trade as INDIANS WILL NOT PAY HIGHER PRICES OF INDIAN SUPPLIES.That is disaster in the unorganised finance market - Nidhis/NBFCs/Chit Funds - all will go bust.This will also impact the unorganised working capital credit to SMEs.
Y not also impose an Export tax on exports to PRC. Again a dead end - as PRC will import from elsewhere.
Y not ban Chinese flag ships from Indian Ports - No problem - PRC will do the same from PRC and HK and some African Ports.
Y not ban PRC from all infrastructure projects ? Sad ! All Indian Infra companies are bankrupt - including those making toilets !
India needs PRC.
PRC could short Indian paper and securities,in the NASDAQ/NYSE or short the INR,in the NDF or just kick out the Indians,from HKSAR - now PRC.It Could also kick out the Indians from many nations in Africa - Idi style ! I pray for Idi !
It is certain that PRC will use the Taliban and Pakistan,based marine/maritime outfits - in the next phase.The Problem with the Indians,is that they THINK that they have the PRC jugular - In Malacca and the shallow waters,in the waterways,through Malacca,which can spot PRC Nuke Subs and Diesel Subs.
Sweet Dreams are made of this !
India has no options ! The PRC will now enter the whole of the North East
India cannot handle Nepal - they could not stop them from changing a map - how will they handle PRC.Indians still have not perfected the art of making galvanised steel - how will they re-take Galwan ?
Just handover Ladakh,Sikkim and Arunachal to the PRC
And then back to Cow piss Cola !
In the next phase,I expect PRC to use Tibetans in the PLA on the Indo-Chinese border and the Nepali midgets on the Indo-Nepal - to turn the Tibetans and Nepalis against India and Indians
The Mongols are the master race of South and East Asia - that is a historical and scientific fact
Agree with the author that we need the China economic model to grow internally but totally disagree that we decouple economy from security internally and that the border conflicts can take care of themselves and the PLA can kill 50 more soldiers but the India-China economic relations should keep on expanding. Not only this is what exactly the Chinese want and have been practicing and getting away with it for a long time, this very notion coveys a ridiculous sense of sanctimonousity where in the vision is only as far as the nose can be seen!!!!
Appreciate your response, Pankaj. As I wrote, I dont disagree that there needs to be a response that would deter future behavior. My framing is around cost-benefit, and highlighting the potential high cost to Indians of responding in the economic domain, through so-called economic decoupling. Ultimately China is most threatened by an economically strong India. As you say, 'we need the China economic model to grow internally', one part of that model is deep ties with all the big powers- from US to Japan, despite major differences from political to security.