Amid the growing trade tension between the US and China, Chinese companies have turned their eyes towards other countries to sell their goods. This is the reason why they are ready to sell goods to India at cheaper prices. Chinese companies are offering up to 5 percent discount to Indian buyers, which has raised hopes that the prices of electronic goods in India may come down, but experts believe that despite this discount, the path to cheap electronic goods in India will not be so easy. There are many economic, policy and practical reasons behind this.
India buys these components from China
India is currently buying only very important electronic parts from China. These include chips, copper tubes, television panels, circuit boards, battery cells, display modules, camera modules and printed circuits etc. for different uses.
Chinese companies in a hurry to sell goods
The US has imposed an additional 125 percent retaliatory duty on China, which has come into effect. This has made the sale of Chinese electronics products almost impossible. In such a situation, Chinese companies are giving a five percent discount on electronics parts (components), where the profit margin is very low. Anyway, the stock of raw material in the form of electronics components is ready for three months. In such a situation, the longer this goods remain with the companies, their losses will increase. Therefore, Chinese companies are in a hurry to increase their sales in India as soon as possible so that they can deal with the shock from America to some extent.
Indian buyers may face problems
Experts say that even though Chinese electronics component companies are negotiating to sell goods at a very low margin, Indian buyers do not have the scope to buy even at reduced prices. Because the US has also imposed a 26% duty on India.
Even though it has been postponed for 90 days, Indian companies will still have difficulty selling their goods in the US, so they may hesitate to order raw materials at a cheaper rate. At the same time, the stock of raw materials is ready for three months. According to this, if Indian buyers are interested, they will place orders to Chinese companies in May-June itself.
The government's quality instructions are very clear
The government is emphasizing on domestic production of electronics parts in India through the incentive scheme (PLI scheme) and quality control orders (QCO). Quality orders on imported electronics parts are also clear. At the same time, the import duty on electronic goods and their components in India is still very high. The government is also increasing the import duty to promote Make in India. This will reduce the import duty
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