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From cheap goods to telecom: How China’s industrial hegemony and guerilla marketing tactics can hurt India

It is time we realise how Chinese have been trying to create a hegemony across industries with its guerrilla marketing strategy forcing domestic players to shut their shops in their homegrown markets.

Be it the battlefield or business environment, Chinese have always tried to strain India’s economy in all possible aspects. After conquering and destroying the smartphone manufacturing market, Chinese companies are yet again ready to barge-in and take over the telecom equipment/ infrastructure space.

While there are supporters of Chinese players giving the logic that they provide products and services at a cheaper rate than other players, but one has to wonder how is it, that only the Chinese companies can often offer disruptive pricing and no other players or indigenous or any other foreign players can afford to sell products at that price?

The answer to this question is that while other players focus their energies on developing and bringing new technologies, the Chinese focus on stealing patented and unpatented technologies from around the world through sophisticated cyber-attacks, thereby developing cheaper products. China often rides on the back of copied technologies with an agenda to destroy the domestic industry in the strategic core sectors of the target nation. In fact, due to them simply stealing the technology, their costs are vastly low because they hardly have to invest in Research and Development.

Several years back, Chinese companies set up production facilities outside India to circumvent the Indian judicial system to benefit from brazen and unlicensed use of copied and stolen Indian intellectual Property to supply to the world. Then, they tested waters by exporting goods such as optical fibre and cables to India, that were made by unlicensed use of Indian intellectual property. They successfully circumvented Indian scrutiny and Intellectual Property system by routing supplies through a complex maze of legal entities. They got bolder with their brazen and aggressive Intellectual Property theft and started importing machines using copied Indian technologies such as optical fibre draw towers to set up factories in India.

In 2019, Delhi High Court had restrained ZTT India Pvt Ltd. from marketing optical fibres manufactured using technology which had been patented by an indigenous leader of optic fibre manufacturing in India. Similarly, the World Bank has also banned the company of fraudulent practices under the Lusaka Transmission and Distribution Rehabilitation Project in Zambia.

As the final battle to control Indian telecom infrastructure begins, Chinese are coming armed again with copied Intellectual Property technologies, and hence with no need of investment on R&D, to manufacture cheap optical fibre and cables in India. 

Trading with China will hinder India’s ‘Atmanirbhar’ dream

As India is getting ready for the next revolutionary wave in the telecom sector 5G, Fibre Optical cables and Fibre Optics will play a major role in this journey. After driving overcapacity in critical sectors including steel and aluminium, telecom equipment is its next target. In the optical fibre cable market, western companies are struggling against the tide of overcapacity, plunging global prices to non-competitive levels, driving companies out of the market and leaving the world with only one supplier, China. 

Moreover, Chinese players are dumping fibre optic cables in the global market and now in India, i.e. exporting less the price they sell in their market, with a clear intension to kill the indigenous players India.

The COVID-19 pandemic has already strained the manufacturing sector. While the government is taking crucial steps to support the domestic players with ‘vocal for local’, it is time we start understanding how Chinese players have been ruining other markets and are now ready to make India dependent on Chines imports. 

Job loss

Amid pandemic India is also suffering job losses across sectors and levels. With initiatives like ‘Atmanirbhar’, the government is attempting to create new job opportunities by supporting SMEs and domestic players to manufacture goods and services in India itself. The Chinese finished products are imported at cheap rates, stealing the business opportunity from local players.

Ultimately, with long prolonged loss, these companies are facing will lead to job loss again. However, if local manufacturers get more business contracts and can increase their overall manufacturing capacity, they will encourage hiring more people at the manufacturing units. 

Stealing India’s Intellectual Property

To counter the threat posed by Chinese applications to the country’s sovereignty and security, the government of India took a bold move to ban 59 Chinese mobile applications last month. Similarly, it’s also time that the Indian government starts identifying how Chines players have been copying designs, technologies of other players in the sector to ruin their name from the industry.

This is the time when the nation’s Intellectual Property is at risk, the nation’s ability to become Atmanirbhar is at risk, and India ability to withstand backdoor Chinese economic invasion is being tested. It is the time to take a step back and say NO to Chinese. 

Indian companies are expanding western partnerships to keep China out

The pandemic has obstructed the planned economic growth of not just India, but the entire world. However, government’s ‘self-reliance’ vision has thrilled Indian manufacturers not just in telecom, but other sectors as well to start investing in the new age technologies, increase manufacturing capacity to cater to the demand of Indian and supply to foreign markets as well. Talking about the telecom sector, shunning Chinese-made products, is also opening doors for western companies to partner with Indian tech giants and together target the 500 million potential user market which still doesn’t have internet access. 

Google recently announced an investment of $4.5 billion in India’s Jio Platforms, the unit of Reliance Industries overseeing music, movie, and telecommunications ventures. Facebook bought a 9.99% stake worth $5.7 billion last month. Since April, Jio has raised more than $20 billion from investors including General Atlantic, Qualcomm, Intel, and Silver Lake. 

Industry bodies demand reservations for domestic players for BSNL 4G tenders:

The domestic telecom gear makers body TEMA has urged the government to provide 20-30 per cent reservation for indigenous companies in the proposed BSNL 4G services tender. Moreover, with the souring border relations, it is expected that Chinese telecom giants will be barred from 5G deployment in India, a similar move U.K. has already taken. 

It is time we realise how Chinese have been trying to create a hegemony across industries with its guerrilla marketing strategy forcing domestic players to shut their shops in their homegrown markets.  

(The article has been written by Akul Mehta, a Telecom & Cyber Security Consultant)

 

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