Imports from China:Threat or Opportunity Analysis of Indian Manufacturing Sector

Manufacture imports from China increased from US$ 42.5 billion in 2010-11 to US $ 74.9 billion in 2017-18 thereby raising concerns about the adverse implication on the domestic manufacture sector. The focus of the paper is to assess the impact of imports from China on the manufacturing performance, in terms of output growth, value added growth, labour and capital productivity, capacity utilisation, Employment and Export intensity. A total of 26 industries corresponding to 18 HS chapters have been selected on the basis of imports from China accounting for over 40% of the total imports of that industry. The analysis was carried out separately for imports defined as Capital goods, Intermediate goods and Consumer Goods. Imports from China seem to have had a favourable impact on industry output / value added driven by increasing labour and capital productivities. The estimates reveal that in terms of value, the impact of imports of intermediate goods on output is 163%, while for capital goods it is 93% and consumer goods is 73%. These results negate the general perception of threat from Chinese imports.