45% of Indians surveyed did not purchase any Made in China products in the last 12 months; 64% do not have any Chinese app installed on their phone

December 7, 2023, New Delhi: India has just initiated move to ban over 100 websites of overseas entities facilitating task based/ organized illegal investment related economic crimes. The latest crackdown has come after the Ministry of Home Affairs in a communication to the Ministry of Electronics and Information Technology asked it to block the Chinese websites, according to a government statement. Over the last few years, India has banned around 250 Chinese apps, alleging that they are "prejudicial to the sovereignty and integrity of India, defence of India, security of the state and public order".

The question remains whether the various central government warnings against use of Chinese apps or initiatives like Make in India and production-linked incentive (PLI) schemes, to boost domestic manufacturing and help reduce reliance on Chinese products, is having any impact? It is still too early to say so, though India’s trade with China declined in the first half of 2023 after over two years of record growth. Two-way trade between the two countries reached $66.02 billion in the first half of this year, according to data from China’s General Administration of Customs (GAC), with India’s imports from China sliding 0.9% to $56.53 billion, as against $57.51 billion in the first half of 2022. India’s exports to its neighbor also fell by 0.6% to $9.49 billion.

India’s dependence on raw materials from China remains substantial, particularly active pharmaceutical ingredients (APIs), chemicals, machinery, auto components, and medical supplies. A study by the Indian Institute of Foreign Trade (IIFT), a state-backed university, found that Chinese imports were boosting India’s manufacturing and its exports in key sectors, including inorganic chemicals, pharmaceuticals, iron and steel. The paper found such imports not only provided crucial raw materials but also bolstered productivity in other industries. The study found that of the 32 product subcategories imported from China, it was the cheapest supplier in nearly one-third of cases. For the remaining 70% there were cheaper alternatives available, and yet, the Chinese product was preferred.

For over a decade most of India’s imports from China are medium to low technology products. There appears to be a shift, more so over the last couple of years as anti-China sentiments have risen post border problems, which has led to traders buying more locally produced products, giving a boost to ‘Make in India’ scheme. Data reveals that toy imports from China have halved in four years to $218.9 million in FY23 from $451.7 million in FY19. Similarly, according to the Global Trade Research Initiative, many other Chinese imports have seen a decline. Medical equipment imports declined 13.6% to $2.2 billion in FY23 compared with FY22. Import of laptops, PCs declined 23.1% to $4.1 billion, while cellphone imports fell 4.1% to $857 million. Urea and other fertiliser imports, too, declined 26% YoY to $2.3 billion in FY23.

Where cost is a major consideration, a lot of day to day products like buttons continue to be imported from China because they are cheaper than Indian goods. Similarly, a lot of other products including festive products such as Ganesh murtis, pichkaris, gulaal, rachis and gift items continue to be imported and sold in the local markets despite the call to boycott Chinese products.

Reviewing the situation, LocalCircles has conducted a new survey to find out whether sentiments for or against buying Chinese products have changed in the last 12 months. The survey received over 37,000 responses from citizens located in 334 districts of India. 63% respondents were men while 37% respondents were women. 41% respondents were from tier 1, 31% from tier 2 and 28% respondents were from tier 3, 4 and rural districts.

45% of Indians surveyed say they did not purchase Made in China products in the last 12 months

Many of the products sold in India as elsewhere, belonging to a global brand, may have been manufactured in China. Sometimes the price of a product may vary depending on whether it has been manufactured in China or any other part of the world. Consumers who bother to check, make a conscious decision based on where it has been manufactured. The survey asked “Did you purchase any Made in China consumer products in the last 12 months?” This query received 12,767 responses with 55% of those surveyed indicating that they had purchased Made in China products in the last 12 months and 45% of respondents denying having done so. To sum up, 45% of Indians surveyed say they did not purchase Made in China products in the last 12 months.

Gadgets and electronic/ mobile accessories is the top category in which Indian continue to buy Made in China products

As more than 1 in 2 of the respondents admitted to buying Chinese products in the last 12 months, the survey asked “What are all the different categories of Made In China consumer products that you have purchased in the last 12 months?” Some among the 7,022 who responded to this query indicated more than one product. The largest group of 56% indicated “gadgets, i.e. Smartphone, Smartwatch, power banks, other electronic/mobile accessories”; 49% indicated “festival lighting, lamps, candles, water guns, etc.”; 33% of respondents indicated “toys and stationery”; 29% indicated “gift items”; 26% indicated “consumer electronics and appliances (television, air purifier, kettle, etc.); 26% indicated “home products like lighting, furniture, etc.”; 15% indicated “fashion products like apparel, bags, accessories, etc.”; and 15% indicated “other items” not listed above. As the survey shows, gadgets and electronic/ mobile accessories is the top category in which Indians continue to buy Made in China products.

63% Indians have reduced their Made in China product purchases due to the current geo-political situation; 16% of them say they found Indian alternatives to be better in price and quality, with better customer service

As many of the respondents have reduced buying Chinese products, the survey asked “What are all the reasons that you reduced the amount you spend on purchasing Made in China products in the last 12 months?” Out of 12,350 who responded to this query, with some indicating more than one reason, 63% of those surveyed shared that they “bought more Made in India products because of India-China geopolitical development”; 16% of respondents indicated they switched as “Indian alternative was better price-quality combination”; 16% indicated that their choice was dictated by the fact that “better customer service was available with Made in India products”; 13% indicated that “an alternative non-Chinese but foreign (non-Indian) product was available which has better price, quality and customer service combination”: 7% stated that they “just didn’t find as many Made in China products in market, stores or online”. In addition, 13% of those surveyed stated that they “haven’t reduced buying Made in China products, just didn’t have that much need in the last 12 months”. To sum up, 63% Indians have reduced their Made in China product purchases due to the current geo-political situation; 16% of them say they found Indian alternatives to be better in price and quality with better customer service.

23% of Indian smartphone users surveyed have 1 or more Chinese apps installed on their phone

Data theft due to spywares has led to the Indian government banning dozens of Chinese apps in the last few years. The survey asked “how many Chinese apps do you have installed on your phone currently that are related to ecommerce, device management, gaming, utilities like photo editor audio/video editor, scanner or social networking?” Out of 12,233 respondents to this query 64% stated “none of them”; while 4% indicated 5 or more such apps are installed on their phone currently; 6% of respondents indicated 3-4 such apps; 13% indicated 1-2 such apps and 13% of the respondents opted for “can’t say”. To sum up, 23% of Indian smartphone users surveyed have 1 or more Chinese apps installed on their phone.

When comparing the survey data this year with the results of the survey done in 2022, it is evident that more Indians are paying heed to the government advisory not to use many of the Chinese apps. As against 29% of respondents who revealed having one or more Chinese apps installed on their phone in2022, this year the percentage has dipped to 23%. Though an improvement, the new survey shows that nearly 1 in 4 smartphone users are still using 1 or more Chinese apps.

In summary, while anti-China sentiments have grown and appreciation and advantages of buying Made in India products has increased, the shift away from Chinese products particularly gadgets and electronic/ mobile accessories prevails as it is the top category in which Indians continue to buy Made in China products. The survey shows that 55% of respondents have purchased Made in China products in the last 12 months. Of those who bought Chinese goods - 56% bought gadgets, i.e. Smartphone, Smartwatch, power banks, other electronic/mobile accessories”; 49% bought “festival lighting, lamps, candles, water guns, etc.” as they are cheaper. For the same reason, 33% of respondents indicated that they bought “toys and stationery”; 29% indicated “gift items”; 26% indicated “consumer electronics and appliances (television, air purifier, kettle, etc.), and 26% indicated “home products like lighting, furniture, etc.”; 15% indicated “fashion products like apparel, bags, accessories, etc. On the other hand, 63% of Indians surveyed have reduced their Made in China product purchases due to the current geo-political situation while 16% of respondents have started buying more Indian alternatives as they can be had for better price and of finer quality with better customer service. When it comes to mobile apps, the survey shows that nearly 1 in 4 smartphone users are still using 1 or more Chinese apps, which as the government has pointed out repeatedly poses great risks. The government and manufacturers need to study how to build on changing Indian consumer sentiments to make Atmanirbhar Bharat more relevant.