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Made in China or Made in Vietnam: Which One is Better for India?

September 13, 2018

Made in China or Made in Vietnam: Which One is Better for India?

For the longest of times, our Indian market has been marked by “Made in China” tags here and there. Regardless of the product in question, one can be almost certain to see Chinese products stocked up on the shelves. Not exactly surprising when you look at our import statistics. China accounts for nearly 16.2% of India’s imports.

Despite China having a stronghold in the international trading, one of its neighbors has made impressive improvement in recent years. Vietnam – a country with nearly 1/14th the population of China, has been emerging as a strong contender in the international trade market, as compared to before. The India-Vietnam relations have also seen a gradual uphill journey. While considering our ties with China and Vietnam, it all boils down to one question.

Made in China” or “Made in Vietnam”- what should India choose?

India-China trade relations

Besides having Asia as their common continent, India and China have a long list of similarities. The top two populous countries of the world, as well as, among the fastest growing economies, the two share multiple platforms. Perhaps that is why, Indo-Chinese (or Sino-Indian) relations have always managed to attract eyeballs and spark interest.

The ‘trade ties’ between the two nations are at least as old as the Silk Route, which acted as a major economic link of that time. Moving ahead in the timeline, India became the first non-communist nation to establish diplomatic relations with China in 1950. In 2012, China made a statement saying that “Sino-Indian ties” are possibly the most “important bilateral partnership of the century”. Despite having regular tensions at the border, and the trade competition, India and China have continued to achieve new highs in their economic relations. In 2017, the bilateral trade between the two nations reached an all-time high of $84.44 billion.

Major exports from India to China are- cotton, gems, precious metals, copper etc.
Major exports from China to India are- electronic equipment, machines, engines, fertilizers etc.

India-Vietnam trade relations

The 1970s witnessed a steady progress in India-Vietnam relations. In 1972, the two nations established official diplomatic relations. India gave the “Most Favoured Nation” title to Vietnam in 1975, and the two signed a bilateral trade agreement three years later, in 1978. Since the liberalization of both countries’ economy, the trade relations have only spurred up.

India is among Vietnam’s top ten exporters. Vietnam, that has been an important market for Indian goods, has also notched up its export levels. Goods channeled from Vietnam to India have noticed a steady increase in the past decades, reaching at $3.32 billion in 2017. The intentions to build better trade relations is clear from the fact that India’s “Make in India” offers plenty of incentives for Vietnamese manufacturers. Early in 2018, the two nations’ pact to expand bilateral trade further, got government approval.

Major exports from India to Vietnam are- iron and steel, animal fodder, cereal etc.
Major exports from Vietnam to India are- telephone sets, machinery items, natural rubber etc.

Made in China Vs. Made in Vietnam

Trade relations and other diplomatic relations between two nations can hardly be put in different buckets. There is more to the equation than a mere “2+2=4”. Hence, the crucial question: what should India as a nation promote and engage into more? Made in China products, or made in Vietnam?

To put things in perspective, we need to look at the history these countries share, on all levels. India and China have been the Asian superpowers for a while now. Sharing a complicated relationship, the nations still play an important part in each other’s economy. Both are among each other’s chief trading partners. According to 2011-12 data, China is the largest source of imports for India, while India is the 4th largest exporter to China. Trade between the two nations has expanded from around $3 billion in 2000 to a staggering $73 billion in 2017.

On the other hand, the journey with Vietnam has been one of steady progress. From being a country torn apart after the Vietnam war, it has impressively made its way to recovery. In clothing and footwear trade, for example, Vietnam is now a strong contender. Moreover, it has become clear in the recent decades that both India and Vietnam view the other as a key potential partner. Recently, the two observed their 45 years of diplomatic relations, and the statement consequently released declared that they intend to further expand the bilateral relationship.

Conclusion

Evidently, both China and Vietnam bring different incentives to the table for India. While China remains the largest source of imports for India, Vietnam is also slowly making its way in the picture. It is no mystery that India-Vietnam relations are being strengthened day by day. While China and India share a “love-hate” relationship, the same cannot be said about India and Vietnam, fortunately. There is another side of the coin to consider, however.

While there may be tensions between India and China, the latter’s importance in India’s trade market cannot be denied or undermined. Vietnam is becoming an important trading partner for India, yes, but it can not be thought of as a substitute for Chinese products.

Made in China, or Made in Vietnam? What’s certain, is that one cannot be substituted for the other. While making a choice, the best we can do is consider the entire picture before reaching a conclusion.

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Summary
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Made in China or Made in Vietnam: Which One is Better for India?
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Description
Indian economy is a matter of great interest to our countrymen. So naturally, the question "Should we boycott Chinese products?" often comes to the mind. In that case, what should India go for? Made in China or Made in Vietnam?


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