Ashwani Mahajan, national co-convener, Swadeshi Jagran Manch, in an interview to IN, says protectionism has never been the thrust of his organization’s but protecting domestic manufacturers has always been. He also blames the previous governments for turning blind despite burgeoning trade deficit between India and China. Excerpts from the interview:
Will ‘local ke liye vocal’ and a call for self-reliant India promote protectionism?
Absolutely not. By boosting manufacturing in the country, how are you promoting protectionism? Boosting manufacturing and becoming self-reliant is not protectionism. I want to underline that we do not want protectionism but what is unfair must stop. We have never been in favor of protectionism, we have only underlined the need to impose the right tariff, anti-dumping duties and other measures like non-tariff barrier and importantly set standards. Why should we allow substandard products to be sold in the Indian market? I don’t think this is an unfair ask.
Why do you think manufacturing has not taken off the way it was anticipated?
We never paid heed to the voices of our domestic manufacturers. They have always been doing a good job but apathy from governments and the fixation for free trade have destroyed them. Moreover, free trade can never be one-sided. When others have been trying to be protectionist by raising tariff walls and imposing non-tariff barriers, we cannot sit idle with open borders.
Do you think it will be easy to boycott Chinese-made products suddenly, especially as we have been extremely dependent on supplies from that country?
Yes, we have become dependent, and this has happened in the last 20 years. The earlier governments have not taken note of this. Our manufacturers have been crying [for a level-playing field]. The earlier governments systematically destroyed manufacturing, which is so crucial for the economy. It produces jobs. Our tariffs for the last many years have been such that it became cheaper to import than manufacture. Is it not destroying our manufacturing sector? Let’s take the example of the active pharmaceutical ingredient (API) sector which is required for production of drugs and antibiotics. In the 1990s and 2000s India was largely self-sufficient in producing API. But, due to the obsession of globalization, we have killed the sector systematically and now we are dependent on China.
What will be the impact if India boycotts Chinese-made goods?
In the last nearly two to three years, we have been able to reduce our dependence on Chinese goods significantly. Imports from China came down from $76.4 billion in 2017-18 to $65.3 billion in 2019-20. In 2018-19, the major fall was seen in electrical and electronics products, imports of which declined by nearly $8 billion. In 2019-20 imports of electrical and electronics further declined by $1.5 billion. The import of iron and steel declined by 12.3 per cent in 2018-19 and further by 22 per cent in 2019-20. In 2019-20, the import of organic chemicals declined by 7.3 per cent and fertilizers by 11.4 per cent.
Imports from China, which were rising in leaps and bounds earlier, have shown a significant downtrend due to anti-dumping duties on Chinese products, hikes in tariff rates on goods regarding which our dependence is more on China, and imposition of non-tariff barriers by way of standards.
Do you think the coronavirus pandemic will prove to be an opportunity for India?
It will. Not just India but the whole world has realized how dependence on one country is harmful. Companies are now looking to invest in other countries. India must act fast to attract investments and it has. The government’s production-linked investment or PLS scheme is a very good one. It will push manufacturing and create jobs. Now many companies, including those producing APIs, are willing to put up plants here but there is skepticism. They need to be assured and some mechanism needs to be put in place to protect them, after all the investments should not be allowed to go waste.
What according to you should be India’s thrust?
We must prioritize our domestic manufacturers and businesses. People have been talking about the China model of growth. Then let us follow the model within India and boost domestic production. That is what China has done. We need to identify sectors and give them the required boost for economic growth to revive.