China’s official media has warned India that there may be countermeasures if there is a temptation to resort to ‘protectionism’. A report in China’s state-run Global Times, says that companies in India are seeking action from government to decrease the pain following a defeat from Chinese counterparts. The article is in reference to local and Chinese mobile phone manufacturers. The report claimed that Indian firms have been asking from the government to increase supplementary levies against handsets from Chinese companies.
Regarding China, the article in Global Times said that their government is less likely to sit idle even when India is harming their interests. The report said that there is a possibility that China will take counter measures if India uses unfair means to protect its homegrown firms from other international companies. “Beijing and New Delhi should avoid a potential trade war and enhance economic cooperation in order to strengthen bilateral ties between the two countries,” Hu Weijia from Global Times said.
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The article also wrote on how PM Modi initiated the ‘Make in India’ campaign amidst rapid industrialisation and development. It raised the issues on the ways to ‘effectively protect nascent homegrown industries’ and the difficulties faced by local governments. The news report said that protecting local brands from international competition may give some time to homegrown firms for expansion on their market, but in the long run, it will affect the industrial system by making it inefficient. It also reduces the competitiveness of the local brands, the article claimed.
The article in Global Times said that PM Modi has raised the overall efforts, including tax structure reformation, in the last few years to make India a good investment destination. However, the potential protectionist measures, the article claims might ‘overshadow the effects of the government’s plan to improve the investment climate’. The report said that China is a big source of major investments in India. It added that industrialisation and modernisation in India cannot be complete without help from foreign investors.
It also said that the common interests of Indian employees in Chinese companies might get hurt since some vendors have announced the establishment of production facilities in India but may face supplementary levies against its products.