There will be a boom in trade with China
The Indian government is now going to speed up the approval process for goods coming from China. This step has been taken amid the recent softening of relations with Beijing and increasing demand in the country. About five years ago in 2020, after the border clashes, India had almost stopped approving many products coming from China such as electronic parts, steel, shoes and household goods. But now the situation seems to be changing.
Why is the government’s stance changing?
Diplomatic relations between India and China have improved in the last few months. After Prime Minister Narendra Modi’s visit to China and meeting with Chinese President Xi Jinping, direct flights started again and business visas also started being issued. In such a situation, the Central Government is now clearing the way for those foreign companies whose products are necessary in the Indian market.
The Department for Promotion of Industry and Internal Trade (DPIIT) has recently sought information from manufacturers about all those cases where there was delay in approval of foreign plants, especially China. Now the government is preparing to settle these pending cases soon.
Pressure of local supply and festival demand
After the recent GST cut, sales of many consumer goods have increased rapidly. The demand for premium electronic goods like TV, washing machine, refrigerator and dishwasher has increased so much that waiting lists have been formed for many models. Companies say that they have run out of stock and there is huge pressure on the supply chain.
In such a situation, the government wants that the approval process of BIS (Bureau of Indian Standards) should be expedited so that goods from foreign suppliers can reach quickly and there is no shortage in the market.
Balance of quality and localization
To sell any product in India, whether it is made in the country or abroad, approval from BIS is required. This approval is given only when the concerned manufacturing unit is tested on quality standards. This process is longer for foreign factories because BIS officials have to go to that country and inspect.
After 2020, such approvals for Chinese plants almost stopped, which affected India’s supply chain. Now the government is trying to strike a balance in these matters, that is, promotion of localization will also continue, but there will be no unnecessary delay in foreign approvals.
Relationships moving in a new direction
Beijing has recently resumed exports of rare earth magnets to India, which are important for electric vehicles, renewable energy and electronic products. This is a clear sign of improvement in India-China trade relations.