Traders use WeChat, Mi Video and QQ Mail, which figure in India’s negative list, to do business with China. Translated texts, pictures and videos shared through these apps helped traders from both the countries share documents, send pictures of consignments and overcome language barriers.
India’s cotton and cotton yarn exporters are worried because China absorbs a quarter of the shipments of these products from the country. Bangladesh is the biggest consumer for Indian cotton, followed by China, Vietnam and Indonesia. Some traders fear that China may increase import duties on Indian products.
“The sudden ban on the mobile apps is going to impact the cotton and cotton yarn export business in the short term. WeChat and QQ have become the lifeline for both Indian and Chinese businessmen to connect,” said Vivek Kaushal, senior general manager (marketing and purchase), DCM Nouvelle Limited. “No one has the time to write a mail in English, so the entire business transaction from taking orders, transferring letters of credit to even addressing complaints was on the mobile app.”
He said the app also translated English text messages in Chinese and vice versa.
Importers of agricultural commodities from China are also worried. Traders said they would have to look for alternatives for communication with Chinese parties.
“Through the video calls I could see the various stages of the crops that I was going to procure. The interactions with farmers and traders brought clarity on the crop position and pricing. We will now have to look at another app,” said rajma importer Pradeep Kumar Runwal of Bherulal Radheshyam Bhandari.
Almost 50% of the rajma consumed in India comes from China.
Confederation of Indian Textile Industry chairman, T Rajkumar said there will be a small disruption due to the ban on the mobile apps but the situation will improve. “The business will look at other ways to communicate like e-mails and this will be a temporary disruption in business. Moreover, exports of cotton and yarn to China have gradually been slowing down and it’s time we look at new markets in Korea and Taiwan,” he said.
China has increased its purchase of cotton from the United States after the phase one trade deal it signed earlier this year.
Fears of higher import duty in China have added to the uncertainty.
“We don’t expect any business transaction for the next 15 days due to the uncertainty. People are concerned about China increasing the import duty,” said Mahesh Sharda, president of Indian Cotton Association.
Buyers are looking for discounts, and prices have fallen 2% in the past one week for export quality yarn, said Sharda. Prices can come down 3-5% if the stand-off continues, he said.
According to industry estimates, India exported 257 million kg of cotton yarn to China in 2019-20, which was 27% of the total exports of the commodity. In the October 2019-September 2020 season, 3.5 million bales of cotton, or 21% of the total, have been exported to China. Each bale equals 170 kg.
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11 Comments on this Story
A R Raju194 days ago
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Chhavi196 days ago
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