đŻ Make in India Mission in Danger?
WTOâs latest ruling could impact India's ambitious Make in India mission. How? ReadOn!
Make in India.
Our motto to kill China's influence on the Indian markets.
Our path to aatmanirbharta.
This 'Make in India' rocketship was steering through the sky, reaching new heightsâŚ
Ouch, a roadblock: the World Trade Organisation's (WTO) recent ruling against India.Â
What's the new ruling? And how will it impact our 'Make in India' mission?
ReadOn!
đ Setting the Scene
Well, it all goes back to 2014.
Chinese goods had taken over the Indian market because they were sasta, sundar and tikau (well, maybe not so tikau).Â
Indian brands faced tough competition and saw declining sales.Â
We had to do something. We could not let China's grow at our cost.Â
And so, 'Make in India' was born.
Under this mission, we launched several product-linked incentive schemes to encourage more companies to set up manufacturing plants in India.
While 'Make in India' was the focus, it could not succeed without a focus on 'Stop China'.
You see, if Chinese mobile phone companies kept importing cheap phones or cheap phone parts into India, our homegrown products would still be at a disadvantage.
So, we levied heavy import duties on electronic items like phones, smartphone components, etc. to make imports expensive.
Now, we werenât just importing from China. We were also importing from the EU, Japan, and Taiwan.
These countries were not happy with the import duties because they would reduce their exports to India.
In fact, the European Commission said that ~ 600 million euros of its exports were directly affected by India's tariffs on an annual basis.
What did it do? Appeal to the WTO.
đ What did the WTO Do?
And what did the WTO do?
The WTOâs orders say that India needs to remove these duties.
Why? Â
Well, long long ago, in 1997, India signed an agreement called the Information Technology Agreement.
This agreement says that all the signing countries will not impose tariffs on ICT products mentioned.
Now, back when this agreement was signed, we didnât have a lot of the fancy electronic equipment we do now.
So, we can still impose tariffs on these new products then?
Um, nope.Â
This agreement was allegedly amended by the WTO later.
And as India had not objected then, it was assumed that we had accepted the amendment.
So, long story short: we canât technically add tariffs on a lot of electronic products.
đ Whatâs Next for India?
India is going to file an appeal to the WTO.
We're super confident that we can convince the WTO.
What if we canât? Thatâs the problem.
If we canât convince them, it could jeopardise our Make in India mission.
You see, if there are no restrictions on imports of smartphones or smartphone components, there will be two problems:
Foreign companies who were investing in India and setting up manufacturing plants may stop doing so.Â
Chinese manufacturers, who are now manufacturing in India, could once again go back to importing from China.Â
Result? Growth of this industry could stall and lots of jobs could be lost.
We would go back to square one if we lose this.
We went from importing 92% of Indiaâs phones to manufacturing 97% of phones sold in India.Â
Our mobile exports have finally crossed the $10 billion mark.
All of this progress could be wiped out.
What's worse, this may trigger a domino effect. The whole electronics industry will face the consequences.Â
Yep, we're kind of in a rough spot right now.
We can only hope that the WTO will listen to us.
If not, we will have to re-strategise our electronics manufacturing plan.
We will have to figure out other ways to promote Indian brands and become aatmanirbhar.
What is your take on this? What do you think India can do if the WTO doesnât listen to us?
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But domestic mobile phone manufacturers were slamming duty one of the industry representative said that the components on which there is duty are not at all manufacturered in india this is hurting atmanirbhar bharat mission of India:-
https://www.communicationstoday.co.in/mobile-phone-makers-slam-higher-duty-on-china-imports/
scary moment hai