Does buy­ing im­ported makes me a lesser In­dian?

Consumer Voice - - Editor's Voice - Padma Joint edi­tor

Just a few days ago, I overheard a talk be­tween two park­ing at­ten­dants. The awed and be­wil­dered look in the eyes of one of them said that he had just ar­rived in Delhi. Ad­mir­ing a for­eign­made sports car, he asked the sea­soned valet, ‘how much do you think it would cost?’ ‘Just about Rs 1.50 crore,’ came the prompt re­ply. ‘Rs 1.50 crore…’ the new-guy-in-Delhi re­peated the fig­ure in slow mo­tion. ‘This lit­tle ma­chine costs Rs 1.50 crore!’ he said dis­be­liev­ingly and con­tin­ued, ‘man, give me half of this and I can do won­ders with such money…’ Be­fore he could fin­ish, the other man said, ‘and you know what, the per­son paid an al­most equal amount of money as tax (prob­a­bly re­fer­ring to im­port duty) to get this from Amer­ica (he ob­vi­ously didn’t know it was a Ger­man ve­hi­cle).’

This seemed to be like an or­di­nary road­side con­ver­sa­tion un­til the new-guy-in-Delhi asked a ques­tion that made me think and re­visit all those macro and mi­cro eco­nomics that I had ever known.

He asked, ‘ does it mean that this man earned this much money in In­dia and gave it all to the other coun­try just to buy this ma­chine? If every­body in the coun­try does that, wouldn’t all the coun­try’s money be gone…’ While the boys’ talk got in­ter­rupted by a honk­ing Am­bas­sador seek­ing park­ing space, this ques­tion re­mained with me. I thought, Googled, read, an­a­lysed, and am yet to find the per­fect an­swer to this sim­ple ques­tion: ‘does buy­ing for­eign goods af­fect the eco­nomic bal­ance of the coun­try?’

Well, the seem­ingly log­i­cal an­swer I have is that in this age of glob­al­iza­tion, pro­lif­er­a­tion of for­eign-made prod­ucts ac­tu­ally in­creases com­pe­ti­tion and helps in­crease do­mes­tic com­pe­tency. It is il­log­i­cal to ex­pect con­sumers to go for in­dige­nous goods if they do not match the stan­dard and the qual­i­ties of for­eign goods. At the same time, I did come across some gyaan gu­rus say­ing that re­duc­ing con­sump­tion of for­eign goods would lessen In­dia's im­port bur­den. How­ever, com­pared to the tril­lions spent on im­ports of de­fence equip­ment, aero­planes, ura­nium and gold, what dif­fer­ence can one make by re­fus­ing to buy an im­ported cam­era or a mo­bile phone? Some of the rea­sons that gyaan gu­rus cite to ask you to buy ‘made in In­dia’ in­clude fis­cal im­bal­ance, price in­fla­tion, dis­cour­age­ment to do­mes­tic pro­duc­ers, un­em­ploy­ment as well as loss of cul­ture, val­ues and lo­cal aes­thetics, her­itage, etc.

Now think this way: if we ‘only’ con­sumed in­dige­nously made prod­ucts, the sit­u­a­tion will not be much dif­fer­ent. The surge in de­mand will cre­ate pres­sure on lo­cal pro­duc­ers. Not all have the ca­pac­ity to match the de­mand if im­ports will stop. Hence, there will be sup­ply-side con­straint, in­fla­tion will in­crease, wages will suf­fer, and so on.

The point I am try­ing to make here is that trade and geopol­i­tics are thickly in­ter­wo­ven, and no coun­try can im­pose ar­bi­trary re­stric­tions on im­ports. ‘Be In­dian and buy In­dian’ now needs to be re­placed with ‘be In­dian and sell In­dian’. My an­swer to that new-guy-in-Delhi would be that as long as Ger­mans are buy­ing our pash­mina and silk, and con­tinue to hol­i­day across our states, there is no harm in buy­ing sports ma­chines from them.

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