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Is India’s new trade rules a setback for China?

The Government of India has made major changes in its trade rules. And these trade rules are going to have a direct impact on China. But it will be interesting to see how big this effect will be.

There has been a long-running border dispute between India and China. And these trade rules are also being linked to this. To tell you for information, the border forces of India and China had become face to face in the strong valley, in which more than 40 soldiers of India were martyred. These trade rules are believed to be the answer.

What are the new business rules

Nwe trade rules
new trade rule

Now for any government procurement in India, countries bordering India will have to first obtain political and security permission from the government. This permission will have to be obtained from both the Ministry of Home Affairs and Ministry of External Affairs.

However, these rules are believed to be especially for China. Because Chinese companies participate in the highest tender for government procurement in India. For this, the Government of India has amended the General Financial Rules 2017. Under the change, companies with border of countries adjoining India will have to take permission from the Department for Registration and promotional international trade.

State governments will also have to accept new trade rules

Under the trade rules, only the government tender issued by the central government is not included. Rather, government tenders issued by state governments are also included in this.

For this, the Government of India has issued a directive for the states to implement these new trade rules. This is considered a shock for China.

However, some terms and conditions have also been added to it. Due to the Kovid-19 epidemic, it will not be necessary to get permission on related items. This exemption will continue till 31 December 2020.

Government procurement data from China is not available

It is too early to say how much trade rules China is going to make. Let us tell you for information that India imports a large amount of goods from China. While exports rarely do. Talking about 2019 20, India had imported 65 billion dollars from China. While the exports amounted to only $ 16 billion. These new trade rules are also being seen from the perspective of losses in India-China trade.

In recent times, Prime Minister Narendra Modi has also been continuously asking for a self-reliant India. In such a situation, this new trade rule is also important for self-sufficient India.

What will India gate from the new trade rules

Trade between India and China may be very high. And the trade deficit should be too much for India. But for China, America and Europe are more important than India in terms of trade. And most of the trade is done by Europe, America and Australia.

Out of this, only trade is done from Europe and America. In such a situation, India’s new trade rules will do any harm to China. It is too early to say so. But India wants to send a message to the world that it stands with the world against China. At present, the world is part of the decoupling campaign with China. And India has also become a part of this campaign.

Especially after the India-China border dispute. In such a situation, India also wants to send a message to China that if China takes action against it. So he should be ready for retaliation.

It will not be easy for Chinese companies to participate in the tender

Due to India’s new trade rules, now Chinese companies will have to get more permission from the government. The same experts are also agreeing that Chinese companies will have to submit more documents to the Government of India. In such a situation, it will now be difficult for Chinese companies to participate in government tenders of India.

Earlier in the month of April, the Indian government had tightened trade rules against China. Under this, FDI rules were changed. And these rules were also for the countries bordering India, especially for China. Under these rules, permission of the Government of India will be required before making any major FDI investment.

The move was taken after the government of China bought one crore 7.5 lakh shares in HDFC, India’s largest private bank.

Experts were hoping that if China’s investment in India continues in this way, then China can acquire large companies of India. To prevent this, the Government of India issued new FDI rules for trade. It was also strongly opposed by China. But the Indian government flatly refused to back down.

Modi wants to convey the message of new trade rules to the people of India

Prime Minister Narendra Modi wants to convey to the people of the country the new trade rules that he is standing against China. And are ready for Swadeshi. The government is promoting Swadeshi.

This can also benefit Modi in elections. At present, there is an atmosphere against China in the country. Twitter is on social media platforms like Facebook #BycottChina is trending. The Narendra Modi government also wants to take advantage of this.

what will be the effect of trade rules on India

The new trade rules are going to have an impact on India as well. Now we will get a boost for Indian companies replacing Chinese companies in the highway textile and plastics manufacturing industry.

The prices of raw materials required for manufacturing the same medicine may increase in the coming days. This can make medicines in India expensive. The same things are cheaply imported from China. Their prices may also increase in the coming days. In such a situation, the public has to be ready for inflation.

At the same time, the supply chain between India and China may also change. And Indian companies can build supply chain from other routes and from other countries. Due to this, annual trade between the two countries is also expected to decline. But in the long run, India is going to benefit from these trade rules.

Because by giving opportunity to local companies, global companies can be created. At the same time, a large number of people will also get employment. Because local companies want to install manufacturing units in India itself. In such a situation, business rules become important for local companies.

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