InvestorQ : Why are Indian auto manufacturers like Bajaj Auto protesting against the proposed blanket ban on China products? Is that not required at this time?
Rashi Mehra made post

Why are Indian auto manufacturers like Bajaj Auto protesting against the proposed blanket ban on China products? Is that not required at this time?

Answer
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sarah Leo answered.
4 months ago


What people like Rajiv Bajaj have been underlining is that we cannot ignore the economic linkages between India and China. Also, economic decisions can be driven by pure emotional rhetoric alone. Indian auto manufacturers have protested that Indian producers would find it impossible to manage without Chinese supply chains.

Auto manufacturers have privately admitted in the last few days that the Indian auto industry is worth $120 billion annually but sources nearly 15-20% of its components from China. Rajiv Bajaj admits that what China offers in terms of price, speed and flexibility just cannot be matched at this point of time.

Bajaj Auto, for example, sources alloy wheels and transmission wheels from China worth Rs.1000 crore. Despite the 10% duty on Chinese products, it still works out 15% cheaper than the locally produced products in the category. It is not only in auto but even in industries like pharma and electronics the dependence on China is quite sharp.