Annexure-V- Cover Page for Academic Tasks

Course Code: ECO531 Course Title: Managerial Economics

Course Instructor: Dr. Tawheed Nabi

Academic Task No.: 3 Academic Task Title: Assignment – Case

based
Date of Allotment: 8th December 2019 Date of submission: 20 January 2020

Student’s Roll no: B41,B42,B43,B44 Student’s Reg. no: 11916076,11916126,

11916557,11918935
Evaluation Parameters:

Learning Outcomes:

Declaration:

I declare that this Assignment is my individual work. I have not copied it from any
other students work or from any other source except where due acknowledgement is
made explicitly in the text, nor has any part been written for me by any other person.

Evaluator’s comments (For Instructor’s use only)

General Observations Suggestions for Improvement Best part of

assignment

Evaluator’s Signature and Date:

Marks Obtained: Max. Marks: …………………

 PEER RATING
NAME REGISTRATION NO. ROLL NO PEER RATING
Dileepkumar Mahanthi 11916076 B41 7

Sayantan Shaw 11916121 B42 9

Asish Thapa 11918935 B44 10

Andrew Davis Milanzi 11916557 B43 10

SELLING CHEAP OR DUMPING

A CASE ANALYSIS OF CHINESE

IMPORTS IN INDIA
 INTRODUCTION: -

The sale of goods abroad at a price which is lower than the selling price of the same goods at
the same time and in the same circumstances at home, taking account of differences in
transport costs.

The types of dumping include:-

1) Sporadic or Intermittent Dumping –

This is the occasional sale of goods below the average cost in order to clear a
temporary and unforeseen surplus of that particular good.

2) Persistent Dumping –

It is the situation when a particular monopolist continuously sells a set portion of their
products at a high price in the domestic market and the remaining surplus at a very
low price in a foreign market.

3) Predatory Dumping –

It is a type of anti-competitive behaviour in which a foreign company sets the prices
of its products below market value in hopes to drive out domestic competition. In
time, it out prices peers can help the company to create a monopoly in its targeted
market.

IDEAS AND REFERENCES

The world is turning into a global village and competition is getting stronger, countries like
China are inhabiting different areas in many areas. India is a hub of diverse business
opportunities, and gradually yet consistently, Chinese products such as electronics,
firecrackers, figurines, apparels, etc. are predicting similar Indian products.

The bubbly season is particularly a period of brokers' pocketful business. However, openings
are snatched with an assortment of goods of choice by Chinese producers, rather than the
residential sector having a market impact. Whether it is SME (Small and Medium
Enterprises) or Bangla Enterprise, they are not ready to give concrete challenge to the
practical proposals made by the Chinese. Due to these difficult imports of Chinese goods,
most Indian bungalow enterprises have closed down, and the ultimate fate of the existing
ones is being disturbed. The visionaries of the Chinese business have deliberately attacked
the market with their well-organized promotional methods and steady growth. They study
interest designs and market patterns and offer the lowest cost work they can offer to pull in a
vast area of buyers while still maintaining a beneficial edge. As costs have been arranged in
the Indian market, residential players are gradually losing their offer to major Chinese
business visionaries.

Indian electronic products such as radios, torches, DVD players, etc. are the highest in the
Indian market. Decorative items, fashion accessories such as slippers, jewellery, hand bags,
etc. receive huge responses during the festive season. This year, one saw the Chinese markets
flooding into Indian markets with Indian idols, which were welcomed by Indian consumers
with open arms. Commenting on the change of market scenario, Shri S.P. Aggarwal,
President

The Delhi Exporters Association said, "Chinese manufacturers have created a major problem
for Indian manufacturers. Especially the cottage areas which produce handicrafts, decorative
items, gift articles, sculptures etc., greatly influenced by the dominance of Chinese products
Market. It has raised a question mark against various marketing policies being formulated by
the Government of India. "Even that dubious entry of these products. According to Mr.
Becky Khosla, "The need of the hour is to pay attention to whether the products are imported
entirely or illegally imported into India. In the long run, with globalization and free trade to
become the norm of trade , Indian SMEs need to buckle up. Be prepared to face these
challenges and there is no doubt that SMEs are affected, yet they have to keep up with the
latest trends. There is a need to be educated on the techniques and techniques. SMEs should
be encouraged and directed towards marketing their products. "Adding to this, SPG said,"
Indian SMEs need to take different marketing strategies they have taken from China Instead
of comparing the two countries, the government should first focus on its policies and make
sure SME should work on whether these products belong to China. Unrestricted imports of
Chinese products do not affect the sole livelihood of Indian artisans, so they are heavily
taxed. "The above problem is achieved by introducing SME-friendly policies to the extent
can be resolved. The Indian government should understand the basic fact that SMEs are the
backbone of the Indian economy and their growth will drive India's growth. Indian SMEs
should also constantly study market needs and come up with innovative and cost effective
products to tackle the burning issue.
 REAL WORLD CONCEPTS

CHINESE GOODS IN INDIAN ECONOMY: -

There is no real way to get away from DRAGON by all accounts! Chinese goods are using
the large Indian market only to dump their goods and by doing so they are killing Indian
units. For example, a year ago during Diwali, China-made wafers were sold in the Indian
market. These wafers reportedly contained sulphur. Sulphur is more harmful than nitrate,
which is used to make wafers in India? Since Chinese wafers were less expensive than Indian
wafers, they figured out how to draw in guilt and to a large extent in the uneducated Indian
part. Therefore, the Indian salt industry saw a decrease in income. It is progressively well
known among the Indian public in light of low cost items in China. This has had a very
negative impact without any further fabricating units and hence a significant number of them
need to close shop. For example, information suggests that 60% of modern units have closed
in modern belts near Thane and Bhiwandi to Mumbai. (Indian cabin work at hand for
example) Due to its modest work, China provides the following approximate imports, for
example, materials and attire, electronic gadgets, appliances, and so on. As per official
information, Chinese imports stood at $ 3I9 million (Rs 1,435 crore) in April-June this year,
as opposed to $ 223 million (Rs 1000) crore during the comparable time of the previous year.
Likewise it has affected Indian export advertising, as China has suppressed Indian products in
the remote market as being made economically.

Legendary animals plan to grab an important offer ... they're killing the economy

The economy of India as well as the whole world gradually. They are selling their
commodities at exceptionally modest rates and we are relying on these moderately rated
items and after many years there will be a period at this point when you see only Chinese
goods in business areas, because different manufacturers go bankrupt. And then China will
start raising the rates of its items for example. China’s infrastructure on advertising of
products is banned. Security will be terminated. This is the system China is working on
COMPARISON OF INDIA AND CHINA BY SEMINAR :-

China and India are the two emerging economies of the world. As of 2019, China and India
are the 2nd and 5th largest countries in the world, separately in an ineffective basis. On the
basis of PPP, China ranks first and India ranks third. The two nations together present
19.46% and 27.18% entirely to the rich people in terms of ostrich and PPP separately. Among
Asian countries, China and India together contribute a large share of Asia's GDP.

In 1987, the GDP (nominal) of the two countries was practically identical. In any case, in
2019, China's GDP is 4.78 times more notable than that of India. On a Ppp basis, China's
GDP is 2.38x that of India. China crossed the $ 1 trillion mark in 1998 while India crossed
the multi-year in 2007 on the basis of multiplayer scaling.

The two nations neck each other in per capita GDP. According to both techniques, India was
more exceptional in 1990 than China. Currently in 2019, China is practically more
exceptional than India on 4.61 occasions and more than 2.30 opportunities in the OPD
strategy. The per capita rank of China and India is 72nd and 145th, which is respectable. The
per capita rank of China and India is 75th and 126th, in honor, PPP.

China meets the highest GDP growth rate of 19.30% in the year 1970 and least in 1961 -
27.27%. India reached an unimpressive high of 9.63% in 1988 and a record low of 5.24% in
1979. During 1961 to 2018, China developed over 10% in 22 years whereas India never did.
The GDP growth rate for China and India varied over five and four years.
 IMPACT OF IMPORTS FROM CHINA ON THE INDIAN ECONOMY
IN GENERAL

Even as the effects of globalization continue to be debated, it is generally believed that such
effects are disproportionate even within the economies of nation-states and within particular
countries. Some regions gain more than others, while other declines China have become a
major trading partner of India. Two-way trade and the fastest growing large economies
between the two most populous countries on the planet are expected to reach approximately
US $ 60 billion by the end of the fiscal year ending March 31, 2011. During the recent visit
of Chinese President to India, Wen Jiabao and Prime Minister of India Manmohan Singh
agreed to double bilateral trade to USD 100 billion by 2015. The trade deficit has been
steadily increasing and has reached USD 20 million in favour of China causing concern
among Indians. India accounts for just over 1% of China's total exports, but exports from
India to China are a relatively negligible in proportion of total imports by China. Incidentally
significant evidence of the entry of Chinese goods into almost every nook and market in India
points to an important level - from small gas lighters to advanced computers, the "Made in
China" product appears to be very much in length and breadth. China is believed by many to
be the worldwide manufacturing hub. There are complaints that Chinese companies have
unfair advantages with their counterparts in other areas of the world (including India) in
terms of devalued currency and tax breaks. Chinese exporters have been accused of dumping.
As a matter of fact, India has initiated the most anti-dumping cases against China. Therefore,
it becomes important to study and understand how the rapid growth in Chinese imports in
India has affected the markets here. Furthermore, cheap imports from China may possibly
force Indian producers to become more productive and competitive. In addition, unfair trade
practices by Chinese companies may prove very harmful not only to Indian industry but also
to the country's economy by disrupting domestic job opportunities or even destroying
livelihoods. While cheap products attract consumers, there are concerns about quality and
safety.
STRUCTURAL INVESTMENT :-

On the basis of this conversion scale, the Chinese gained access to their goods in the Indian
markets through significant interests in key parts of the Indian economy. By keeping their
cash powerless they are not expanding the expenditure of their interest in Indian
organizations. In any case, the Chinese explicitly accept the speculation that their time and
energy costs are in light of the fact that their state is not controlling the critical importance of
the affected parts, then organizations are pouring resources. Presently they are accepting a
significant stake in the capacity part of India and are also making rapid progress in the
telecom sector. In fact, even as the Chinese are breaking old ideological patterns to use their
state power in the free market worldwide, their motivation is to simplify them to target
defenceless sectors of the Indian economy.

Karnataka developed as India's largest raw silk distribution state during the 1970s to build
sericulture as a subsidiary business for farmers, based on coordinated labor. The achievement
of this activity gave farmers a safety net in the decades when the Green Unrest began to
erupt. For a long time now, this piece of sericulture has faced trials of Chinese dumping crude
silk in the Indian market. As a positive state support, conceivable state support, China is
snatching a large portion of the Indian raw silk showcase. What's more, the Indian
government, in its promise of progress, has helped this process by reducing the threshold.

TARIFF BARRIERS: -

The reality of the current situation may request a quicker creation of duty and various
hurdles, yet little is to be raised in a more drawn-out period by creating barriers between two
important economies that are outside the direct impact of a financial emergency. The western
world is flooded. Instead of hindering all exchange, the way forward focuses on the means
that China has used to take this hang on the Indian economy. Among the more long-term
steps being taken by India, it is worth noting that reflecting its cash-performing substances to
join the global pressure developed by China is more remarkable than it is today. At any rate
on the degree. Similarly, India would need to consider expanding state speculation, not to
sponsor explicit enterprises, although at any rate the imbalance is a part of the points of
interest that Chinese goods would have been given by their state is. It must be exceptionally
guaranteed that Chinese goods will not be dumped in the state in a manner that destroys the
most powerless sectors of the Indian economy. As India now equips it to meet the monetary
and significant risk presented, reminds that the path to further remuneration lies in fair
exchange, with no further exchange.

SOME OF THE FOLLOWING ARE THOSE REASONS WHICH LEAVE

SOME OF THE OLDER CHAINS MORE THAN A FEW TIMES

1) China does not have stringent intellectual property rights (IPR) issues, so any new
products enter the world market; China is ready with a cheap alternative. Thus, research,
design and redesign of any product has no cost.

2) Worker is not demanding and does not go on strike.

3) While most Indian companies are striving for Total Process Review (TPR) for quality
satisfaction, Chinese companies are not so particular.

4) China has no cost after sales tax on its products.

5) Are we enjoying cheap Chinese goods because Chinese currency is not motivated to
purchase cheap Chinese goods? This requires careful study.

6) Cheap Chinese labor is another major reason for dirt-cheap Chinese goods, especially like
toys where intensive labor techniques are employed.

7) With the removal of quantitative restrictions (QRs), the elimination of the textile quota
regime and Chinese accession to the WTO, dumping activity by the Chinese has increased
manifold.

8) Lower rate of indirect taxes on inputs. A high level of cash subsidy is being provided by
the Chinese government to its producers and exporters.

9) Lower taxes enable Chinese companies to participate in the world market at lower
margins and thus dominate. The adoption of a business model focused on higher volumes is a
natural progression in this scenario.
 CONCLUSION

China undoubtedly has one of the largest Economies and is the number one producers and
exporters in the world. Due to the advancement in their technology and very cheap labour
China has been able to minimize production costs allowing them to manufacture goods many
times in surplus. As a result dumping has become a well implemented strategy to unload the
excess goods. Furthermore lenient laws by the Chinese and Foreign governments allow their
manufactures to easily implement this practice. In addition World Trade Organization should
insure the proper supervision of the Anti-dumping Agreement of 1994 is appropriately
practiced to protect countries with growing economies that are major casualties of this
practice.
 REFERENCES

https://www.investopedia.com/terms/p/predatorydumping.asp

http://www.yourarticlelibrary.com/economics/dumping-meaning-types-price-determination-and-
effects-of-dumping/28863

http://www.yourarticlelibrary.com/economics/dumping-meaning-types-price-determination-and-
effects-of-dumping/28863

http://www.yourarticlelibrary.com/economics/dumping-meaning-types-price-determination-and-
effects-of-dumping/28863

https://www.thebalance.com/what-is-trade-dumping-3305835