The borders tensions between India and China along the Galwan Valley has mounted trade and digital barriers between the countries. Both the countries are continuously retaliating with whatever silent message game they can play.
It all started with the incursions along the LAC that led to the deaths of 20 Indian soldiers for which India is deeply hurt. Reaction? 59 apps originating from China suddenly banned over issues relating to “national security”.
First Apps, Then Power
After 59 apps strikingly banned over the recent standoff, India has decided not to import a single power equipment from China, leading to an estimated $3 billion of per year Chinese power equipments. This is not a temporary hit to China, but the decision has been made and China has lost $3 billion of exports overnight.
What’s Coming Next
Till the time the two countries’ border clash continues, trade between them will reduce rapidly as such decisions are inevitable. The sentiment on Aatmanirbhar Bharat is growing and consumers will start considering country of origin in their buying checklist.
India’s latest policy on E-Commerce rules illustrates just that. All E-commerce companies will now have to mention the country of origin under each product so that consumers are well aware of where the products are coming that they are going to purchase. China will take a huge hit from this change since “Made in China” is now a customer repellent.
MG’s Fate In The Short Term
MG, as we all know, is owned by a Chinese company which has invested over Rs. 5000 crores and plans to spend another Rs. 5000 crores in India over the next 3-4 years. All the money and planning can go in vain if the border tensions continue.
Buying a car is making a commitment for a long time and consumers are highly involved in making a decision like buying a car, that too costing more than 15 lacs. This is all going to matter for MG as people are going to refrain from buying a Chinese product in the near term. The Indian car buyers have parts availability, service network and other related factors in mind before buying a car.
People are inevitably going to support their own country, no matter what – which is ultimately going to benefit Tata and Mahindra. Harrier and Xuv500 are two great competitors to the MG Hector and they are all the more appealing now than ever for the premium SUV buyer.