US President Donald Trump, left, Shinzo Abe, Japan's prime minister, center, and Narendra Modi at G-20 summit in Osaka | Photo: Carl Court/Pool via Bloomberg
File photo | US President Donald Trump, left, Shinzo Abe, Japan's PM, center, and Narendra Modi at G-20 summit in Osaka | Carl Court/Pool via Bloomberg
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As if the Narendra Modi government’s China headache isn’t bad enough, it is being battered this week by two additional worries. The first is the Rashtriya Swayamsevak Sangh-affiliate Swadesh Jagran Manch’s demand that the Board of Cricket Control of India reconsider its decision to hold the Vivo Indian Premier League or IPL in Dubai, Sharjah and Abu Dhabi because Vivo is a Chinese company and BCCI’s move goes against the “current mood of the nation”.

New Delhi’s second big concern is its friend and ally Japan’s recent unusual request to the Ministry of Commerce and Industry to exempt 990 items from raised tariffs because these are imported from China, pointing out that these are necessary for the production of Japanese goods in India.

Now the Ministry of Commerce and Industry — as well as the rest of the Modi government — has been looking long and hard at reducing India’s dependency on China ever since People’s Liberation Army soldiers occupied Indian territory in Ladakh two months ago. India knows its trade deficit with China is a key vulnerability, even though it has fallen marginally from $53 billion to $48 billion this year (total trade is $81 billion).

New Delhi realises that it needs to do something quickly, to show that it won’t take things lying down — the banning of the 59 Chinese apps, including TikTok, was the first shot in that direction — but the bitter truth is that magic wands are in short supply these days.


Also read: US, Australia reaffirm commitment to Quad consultations with India, Japan


To Quad or not

None other than Chinese ambassador to India, Sun Weidong, issued a veiled taunt last week at a webinar organised by the Institute of Chinese Studies (in which ThePrint was a media partner) when he said: “forced economic decoupling…will only lead to a lose-lose outcome.”

At the webinar, Ambassador Sun pointed out that, “92 per cent of Indian computers, 82 per cent of TVs, 80 per cent of optical fibres, 85 per cent of motorcycle components are imported from China.”

Certainly, it is this vulnerability that prevents New Delhi from allying itself much more closely with the US, despite calls not just by the Americans, but also the Australians and the Japanese, to do so. The US Navy exercised with the Indian Navy a couple of weeks ago, and separately with the Australian and Japanese navies 4,000 km away, because New Delhi wouldn’t agree on a joint exercise.

Another move is in the offing to have all four navies of the Quad exercise together in an expanded version of the ‘Malabar’ exercise this November – but New Delhi hasn’t officially said yes so far. With the enemy dragging its feet in Ladakh and throwing all schedules to withdraw to the winds, New Delhi knows Beijing is testing its nerve.

That is why India continues to choose ‘strategic autonomy’, the 21st-century version of ‘non-alignment’, a phrase the Modi government loves to hate because it stinks of Jawaharlal Nehru.


Also read: India has to plan for a hot war where friends are few. US-China cold war won’t help it


Is strategic autonomy paying?

None other than External Affairs Minister S. Jaishankar admitted over the weekend that “it would be a great disservice if China viewed India through the American lens”. That was also a signal to China that Delhi isn’t about to fall into anyone’s lap, at least in the near future.

There are other fears at stake, even if one half of the government is tempted by America’s wooing — let’s face it, there is no other country in the world that can take on the Chinese. But caution has won the day because India is still hugely dependent on Russian weaponry and Russia isn’t about to stomach an open Indian alliance with the US.

Walking this fine line between several competing interests and realities — shoring up partners, some of them reluctant, exhorting others to speak up more and trying to mitigate the damage that China has wrought — has been one of the Modi government’s successes so far. (An inquiry into the alleged ‘intelligence failure’ in Ladakh can come later.)

But what is interesting at this particular moment is that a self-proclaimed friend and ally, Japan, is going out of its way to undermine India’s attempt at reducing its China exposure.

Only some months ago, Japan’s PM Shinzo Abe ordered that Japanese companies reduce their own dependencies on China. Of the 87 Japanese companies that are now relocating from China, 57 are returning home, while the remaining 20 are going to South-East Asian nations such as Malaysia, Vietnam and Laos. Not one is coming to India.

Worse, several of Japan’s biggest companies doing great business in India are now pressuring us not to raise import tariffs on intermediate products they source from China. These include big brands such as Suzuki, Sony, Panasonic, and Honda.

Some would say that Abe is not just undercutting his good friend Narendra Modi’s ‘Aatmanirbhar Bharat’ or Make In India campaign, but also turning a blind eye to big Japanese companies who would rather impose a neo-imperialist fatwa on India than train unskilled labour. These Japanese companies insist that China has better skilled labour, and while that may be a fact, it must be pointed out that the Japanese are in India because of the enormous market that surely shores up a substantial portion of Japan’s bottom-line.


Also read: India can’t replace China at manufacturing, not without paying more: Economics commentator Martin Wolf


Money, cricket and phones

If the Swadeshi Jagran Manch, indeed, succeeds in its anti-China tirade and persuades the government to blacklist Chinese goods – like Vivo, which sponsors IPL – it is clear that the Japanese, along with other foreign companies, will benefit.

That is why it is doubly odd that Tokyo, otherwise so keen on India stiffening the spine of the so-called Quad, refuses to see the strategic picture, but persists with wanting to make a fast buck in the Indian market in the short run.

At the end of the day, it is the amount of money that is the thread that ties all these stories together. Beijing is subtly reverse threatening India not to withdraw from the Chinese market, warning that the pain will be too severe for Indian customers to bear. The Japanese are pressuring India for exceptions because import taxes hurt their profit margins. And BCCI, no doubt shored up by having Home Minister Amit Shah’s son Jay Shah as an office-bearer, is insisting on going ahead with China’s Vivo sponsorship of IPL 2020 — Vivo paid BCCI Rs 2,199 crore in 2017 for a five-year contract and BCCI could lose Rs 440 crore per year now if the exit clauses favour Vivo.

So, what happens to the fight the Swadeshi Jagran Manch has picked with the BCCI and invited the government to play umpire?

With National Security Adviser Ajit Doval summoning the China Study Group to discuss next steps on how to make Beijing behave, it is clear that PM Modi’s big China headache just got bigger this week.

Views are personal. 

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21 Comments Share Your Views

21 COMMENTS

  1. Why not let Vivo invest s a sponsor? The money will come to India… PPl can then decide whether to buy the brand or not.

  2. Demand for not playing IPL sponsored by VIVO is not a headache. BCCI should stop hobnobbing with Chiese companies. Second one is definitely a headache. But, India must assert its soverign right and politely but firmly tell Japan to stay out of the issue. Only such goods which have already arrived before the imposition of restriction should be allowed clearance, not fresh imports from China.

  3. Modi was the principle enabler of Chinese business in India . It started when he was CM. He was shunned in 2002 in the west because of the genocide he organised. At that time, the Chinese picked him up and Modi felt indebted because the Chinese did not not make him a pariah. The Chinese have no concern for human rights. There was some Chinese investment, mostly in Gujarat, and mostly of the import or assembly kind. The goods would be made in China and Gujaratis acted as importers and distributors. At industrial exhibitions, the Gujaratis will be swarming around Chinese stalls looking for distributorships. It is very likely Xi contributed to Modi’s election campaign. There is a video of Modi simpering with delight and boasting he had a Plus One relationship with Xi, which he said ordinary minds may not understand. In the Wuhan summit, Modi coined a pompous acronym which he wrote as STREANH (for STRENGTH) to describe the special relationship. Modi was showing off that he could touch the Chinese emperor’s feet. In all probability, Xi has some compromising data on Modi (like Putin has on Trump), and so Modi cannot open his mouth now.

  4. Excellent analysis, revealing the complexities. However, there is one paragraph that does not fit.

    ‘Walking this fine line between several competing interests and realities — shoring up partners, some of them reluctant, exhorting others to speak up more and trying to mitigate the damage that China has wrought — has been one of the Modi government’s successes so far. (An inquiry into the alleged ‘intelligence failure’ in Ladakh can come later.)’.

    Modi has NO successes, everything he has done is an unmitigated disaster : demonetisation + GST destroyed the economy, CAA-NRC destroyed the social fabric, Covid handling destroyed health and damned the economy, repeal of Article 370 brought the Chinese attack, surrendering land without fight was the worst kind of cowardice, the NEP will stoke the demand for Dravidastan.

    I would add that Modi contributed the most to allow Chinese industry to capture the Indian market. So that is why we cannot extricate ourselves.

  5. Ms. Malhotra has yet again written a cogent piece almost entirely bereft of the bias and prejudice of her earlier columns and that of The Print. Good read.

  6. There is no free lunch. Decisions have to be made albeit tougher on people and the country. The fact that we are caught up in this bind is because of the myopic approach of successive Indian governments for 70 years. We talk about non-alignment in relationship with countries but tie up with dictators and communists and pledge our economic sovereignty and allow cheap imports from every Jack ass in the world. India has become a big market not a market economy. There is a significant difference between being a market for the world and being a market economy driven by growth that serves the world while importing your needs to support your population. Despite liberalization “Balance of Trade” as a concept makes a sound economic sense and that is what we should focus on. Where is balance of trade with China? Screw Japan, USA or other countries who think and lecture otherwise. They cannot decide for India. Time for cheap talk from Politicians is over. National economy is like managing a family. You cannot buy and spend more than what you produce and have. Period.

  7. ASK SUN WEI DONG HOW IT WAS JUST 5 TO 10 YEARS AGO? WHERE WAS CHINA, JUST A FEW LOW QUALITY PLASTIC DOLLS! ISN’T IT? DAYS CAN AND WILL GO BACK THERE DON’T WORRY..JUST A MATTER OF TIME.

  8. Such a defeatist congrass attitude. This is MANMOHANNOMICS ie fake development through phone banking and cheap imports.

  9. You can’t cut short to someone and become big, we didn’t have our priority placed right as it should been, most of the last six year were wasted in different agenda and create rift within instead we should have been focused much on needed reform all around from education to, health, banking, administrative, judicially and many more sector these are quite a few. Now Modi govt started thinking about all of these that also appeared that we are going much in other direction than embracing more on to open economy and focus on competitiveness.

    • You are correct that ‘most of the last six year were wasted in different agenda and create rift’. Most Hindus were happy with that. Beating up minorities brought a sense of elation and power to Hindus.

      They are going to continue with that because they don’t know any better.

  10. Not one of 87 Japanese firms relocating from China is coming to India … If we would step out of our echo chamber, Niti Aayog being a large part of it, we would get a better sense of how India is now being seen / rated by the rest of the world. 2. For once, I agree with SJM. Small traders, who were once the ruling party’s backbone, are being asked in increasingly recessionary times to stop importing Chinese consumer goods. And BCCI will go ahead with flashing Vivo’s name to a billion cricket fans all over the world. 3. Diplomats love playing around with words. Much admired by US think tanks. In the icy heights of Ladakh in the coming winter, brave Indian soldiers will pick up the tab for a foreign policy that is failing to deliver.

    • ‘Not one of 87 Japanese firms relocating from China is coming to India …’

      That vain Yogi told us that firms are are relocating from China and UP will become an industrial hub.

  11. I started reading the article without noticing who is its author. As I became uncomfortable with the contents, i flipped back to check the name of the author. Lo and behold- it is none other than Jyoti! Small issues and irritants are made into big issues. IPL sponsorship is already paid for; so where is the question of abandoning it and suffering any loss? Just like import is paid for and shipment arrives. Japanese would always like an easy way out but government need not relent, Of course, Jyoti would not understand this and would like to present the issues as failure of Modi!! ,

    • Read the article ‘And BCCI, no doubt shored up by having Home Minister Amit Shah’s son Jay Shah as an office-bearer, is insisting on going ahead with China’s Vivo sponsorship of IPL 2020 — Vivo paid BCCI Rs 2,199 crore in 2017 for a five-year contract and BCCI could lose Rs 440 crore per year now if the exit clauses favour Vivo.’

      Have you read the exit clauses to state ‘IPL sponsorship is already paid for; so where is the question of abandoning it and suffering any loss?’

      Jay Shah is corrupt, he made a packet before demonetisation, turning a 5 lakh investment into 80 crores and closing the company before demonetisation. Amit Shah’s banks got the maximum deposits post demonsetisation. Due you think these money worshipping Gujarati Hindus will cancel the Vivo contract and lose money out of patriotism ?

  12. The author (as proxy for The Print) seems to take great delight when India and the Modi Govt faces a diplomatic challenge.
    Why don’t you propose solutions instead of expressing your joy at India’s problems? Is it because you have no solutions to offer?

    • There was a militant Hindu posing as the infallible leader of the Hindus, who says Nehru and all before were wrong. Many Hindus worship him. Others do not, they think he is the ultimate failure.

      How can people who see Modi as the ultimate failure propose a solution when they know you blindly follow Modi although he is a genocidist ? The best is to warn you in time Modi’s daft plans will not work. If you still accept Modi, India has no one to blame for its predicament.

      If people are expressing joy at India’s problems, that is proof of how much Modi has divided the country. It never happened before. Extremist leaders always divide.

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