Screenshot of the report by The Times of India

India’s electronics industry is facing a great challenge as the country starts its economic crackdown on Chinese goods and services, wrote The Times of India on July 5.

In the article, titled “Lamington Road market sweats over deleting its dependence on China”, the author highlighted the fact that the Indian electronics industry depends heavily on China, and banning Chinese goods in India will lead to fewer products and rising prices.

Mumbai’s Lamington Road, described as a one stop shop for all kinds of hardware, boasts more than 1,500 shops and offices that deal in electronic hardware and products. Once an electronics hub, Lamington Road gradually lost its role after manufacturing moved to China due to “low labour costs, better labour laws, high productivity and conducive Chinese government policies welcoming people to set up their plants in their country”.

According to the All India Electronic Association (AIEA), most of the market’s annual turnover is made up of imports from China.

“Virtually all products such as CCTV cameras, automation, access control, entertainment apparatus, PA systems for sound technologies and IT hardware are imported from China,” Rushab Shah, committee member of AIEA, told The Times of India.

Although certain goods also come from Europe or the US, the raw material required by these manufacturers is mainly sourced from China, the report said.

“So it would not be out of place to mention that the Lamington Road market’s dependency on China is almost total for electronic hardware,” Shah added.

Lamington Road’s connection with China is “inevitable” as a majority of the products today are made in China and almost every big brand has a factory located in the country, noted a local trader.

According to local traders, similar clusters in Chennai, Bangalore, Delhi, Kolkata and other prominent cities also rely heavily on Chinese made components.

“If there is a ban, not only will the cost escalate to twice or three times the level, but there will be so many products for which finding an alternative and getting approval will be a challenge,” they added.

Stressing that the Indian electronics industry is heavily import-dependent for its components, AIEA president (West Zone) Mitesh Mody said banning imports of Chinese hardware will badly hit the industry.

“Even if we source it from other countries… we need to shell out 20% to 40% more money. Besides, they all produce most of their goods in their China factories,” Mody said. “So China will not lose business.”