India concerned about widening trade deficit with China

[Bang Galore]

Imports have a negligible impact on inflation? Oh boy your comedy act keeps getting better
Utterly clueless beyond belief you Indians. It's scary that there are people this stupid in this world.

Why do you think companies move to low cost countries to manufacture goods? To keep prices down.
When companies go to countries with higher cost of production, the prices of those manufactured goods rise.
Then when countries like India import those goods, the consumers pay those higher prices. Higher prices mean inflation.

You are humiliating yourself
Keep going, it's fun teaching you basic economics.

Stupidity knows no bounds, certainly in your case. Forgetting teaching anyone basic economics, you seem to have a disproportional need to advertise your ignorance. Your stupidity was evident in a different thread yesterday itself but you seem to have no ability to learn . The Indian economy is not run by a $100 billion trade with China, the sheer stupidity of your statement is staggering. If imports becomes expensive, demand reduces. Excepting oil, there are few areas where imports are absolutely imperative, local alternatives will always take their place. First read up about the nature of the Indian economy before coming here to unload your vomit. Inflation dependent on Chinese imports?

 

[Lightningbolt]

I am relaxed. Just pointed out some basic economics to a few noobs.

 

[sovcomflot]

Stupidity knows no bounds, certainly in your case. Forgetting teaching anyone basic economics, you seem to have a disproportional need to advertise your ignorance. Your stupidity was evident in a different thread yesterday itself but you seem to have no ability to learn . The Indian economy is not run by a $100 billion trade with China, the sheer stupidity of your statement is staggering. If imports becomes expensive, demand reduces. Excepting oil, there are few areas where imports are absolutely imperative, local alternatives will always take their place. First read up about the nature of the Indian economy before coming here to unload your vomit. Inflation dependent on Chinese imports?

His economic concepts are fine,but he does not have full understanding of the nature of imports of the indian economy and thus tries to overstate his case.

lighteningbolt,India's deficits and inflation are heavily correlated to oil prices and oil imports. Don't believe me. Run a Regression or Carl Pearson Correlation of indian deficits,inflation and oil price. You will be in for surprise.

Chinese good imports to india are substantial ,but nowhere comparable to oil imports of india.

 

[Bang Galore]

His economic concepts are fine,but he does not have full understanding of the nature of imports of the indian economy and thus tries to overstate his case.

lighteningbolt,India's deficits and inflation are heavily correlated to oil prices and oil imports. Don't believe me. Run a Regression or Carl Pearson Correlation of indian deficits,inflation and oil price. You will be in for surprise.

Chinese good imports to india are substantial ,but nowhere comparable to oil imports of india.

Not only that, he assumes that imports(non-oil) will continue as before regardless of depreciation of the rupee or increase in tariffs. That is based on his assumption that India simply has no choice or alternatives. That is not an economic argument, merely a stupid rant of one who is here to fight, regardless of issue.

 

[sovcomflot]

Not only that, he assumes that imports(non-oil) will continue as before regardless of depreciation of the rupee or increase in tariffs. That is based on his assumption that India simply has no choice or alternatives. That is not an economic argument, merely a stupid rant of one who is here to fight, regardless of issue.

Practically for high technology products ,even I doubt India has a choice.Chinese are able to produce several high technology goods at a fraction of price compared to what the Russians or Germans can. Most companies prefer to buy Chinese industrial machines these days and Even Siemens,GE type industrial machine makers have massive R&D and marketing centers in China.

Lightingbolt has a point .India does not have much substitutes for low cost high technological products that China can provide.

 

[notsuperstitious]

The only useful information from this thread is that @Dillinger @Chinese-Dragon @Armstrong and yours truly are finance professionals and essentially a drag on humanity

 

[Lightningbolt]

Stupidity knows no bounds, certainly in your case. Forgetting teaching anyone basic economics, you seem to have a disproportional need to advertise your ignorance. Your stupidity was evident in a different thread yesterday itself but you seem to have no ability to learn . The Indian economy is not run by a $100 billion trade with China, the sheer stupidity of your statement is staggering. If imports becomes expensive, demand reduces. Excepting oil, there are few areas where imports are absolutely imperative, local alternatives will always take their place. First read up about the nature of the Indian economy before coming here to unload your vomit. Inflation dependent on Chinese imports?

I said imports contribute to domestic inflation. If you import a tv from the US, then that tv will be more expensive than the exact tv imported from China. Therefore the import from the US will contribute to higher prices (inflation) in India. Now consumers will have to pay a higher price for the tv from the US than the tv from China. Higher cost of production is passed onto the final consumers.

So yes, since our goods are low priced goods, it keeps domestic inflation in India lower than it would have been had you imported goods from a country like the US.

It's called imported inflation.

The low priced Chinese goods make things affordable to the average Indian consumer which increases consumption in India contributing to your growth.

Be mature about it and learn. Have an open mind to accept different points of view.

 

[sovcomflot]

I said imports contribute to domestic inflation. If you import a tv from the US, then that tv will be more expensive than the exact tv imported from China. Therefore the import from the US will contribute to higher prices (inflation) in India. Now consumers will have to pay a higher price for the tv from the US than the tv from China. Higher cost of production is passed onto the final consumers.

So yes, since our goods are low priced goods, it keeps domestic inflation in India lower than it would have been had you imported goods from a country like the US.

It's called imported inflation.

The low priced Chinese goods make things affordable to the average Indian consumer which increases consumption in India contributing to your growth.

Be mature about it and learn. Have an open mind to accept different points of view.

TV's and other consumer products can be substituted.The real thing India cannot substitute is the necessity for chinese high tech industrial products/industrial machines whose expertise is needed.

Nowadays ,ONGC and major oil companies either outsources drilling operations to Bakerhughes,Weatherford or Hallibutron or use chinese workover rigs for operations.Seriously.Your nation has a dominance in low cost high tech goods which is not easy to break at a .

 

[Armstrong]

The only useful information from this thread is that @Dillinger @Chinese-Dragon @Armstrong and yours truly are finance professionals and essentially a drag on humanity

We prefer the term 'Munshi' !

 

[Bang Galore]

Practically for high technology products ,even I doubt India has a choice.Chinese are able to produce several high technology goods at a fraction of price compared to what the Russians or Germans can. Most companies prefer to buy Chinese industrial machines these days and Even Siemens,GE type industrial machine makers have massive R&D and marketing centers in China.

Lightingbolt has a point .India does not have much substitutes for low cost high technological products that China can provide.

I disagree, that isn't the enire picture. That does not constitue the highest percentage of imports(from China) in any case. It is true that Chinese machines are bought at a much higher level now but that is still price sensitive. Take away a bit of that price advantage by higher non-tarriff barriers & the rush to China will reduce. As I have pointed out earlier, Chinese imports in the power sector has grown in leaps & bounds. The market exists there simply for the price, Indian manufacturers also occupy the space. Make the market difficult for Chinese companies & the benefit wil accrue to Indian manufactureres, albeit at a slightly higher cost to the buyer which may or may not be passed on. This is of course a theoretical discussion, merely pointing out that the situation is not as simple as he suggests.

 

[Armstrong]

So @notsuperstitious - CA, CFA, ACCA, ICAEW, CIMA or that CA program that Singapore has started - Which are you ?

 

[Lightningbolt]

His economic concepts are fine,but he does not have full understanding of the nature of imports of the indian economy and thus tries to overstate his case.

lighteningbolt,India's deficits and inflation are heavily correlated to oil prices and oil imports. Don't believe me. Run a Regression or Carl Pearson Correlation of indian deficits,inflation and oil price. You will be in for surprise.

Chinese good imports to india are substantial ,but nowhere comparable to oil imports of india.

A growing economy has growing energy demands. So it's impossible to restrict oil imports because oil is essential to an economy. To say you want to restrict oil imports is ridiculous as energy is the core of economic development. You cannot grow without energy.

Yes oil does contribute to inflation in every country. But it's not the major contributing factor to the sticky inflation problem in India.

But I understand what you mean.

TV's and other consumer products can be substituted.The real thing India cannot substitute is the necessity for chinese high tech industrial products/industrial machines whose expertise is needed.

Nowadays ,ONGC and major oil companies either outsources drilling operations to Bakerhughes or use chinese workover rigs for operations.Seriously.Your nation has a dominance in low cost high tech goods which is not easy to break at a .

I just used tv as an example. It can be any good.

 

[sovcomflot]

I disagree, that isn't the enire picture. That does not constitue the highest percentage of imports(from China) in any case. It is true that Chinese machines are bought at a much higher level now but that is still price sensitive. Take away a bit of that price advantage by higher non-tarriff barriers & the rush to China will reduce. As I have pointed out earlier, Chinese imports in the power sector has grown in leaps & bounds. The market exists there simply for the price, Indian manufacturers also occupy the space. Make the market difficult for Chinese companies & the benefit wil accrue to Indian manufactureres, albeit at a slightly higher cost to the buyer which may or may not be passed on. This is of course a theoretical discussion, merely pointing out that the situation is not as simple as he suggests.

Do you think precision machine tools or oil rigs are easy to make. Check the magnitude of difference in prices . Even with tariff barriers you will not be able to reduce demand,unless the tariffs are simply exponential in nature.

The market exists there simply for the price, Indian manufacturers also occupy the space.

Source: http://www.defence.pk/forums/centra...ning-trade-deficit-china-8.html#ixzz2ft3uoWOv

Not in the high technology sectors like precision tooling,advanced material sciences,oil rig components,Rare earth production facilities etc. India has a lot of catch up to do still and will take a decade or two ,provided India don't end up in a war with China or Pakistan and keep changing geopolitical sides again and again.

 

[Lightningbolt]

I disagree, that isn't the enire picture. That does not constitue the highest percentage of imports(from China) in any case. It is true that Chinese machines are bought at a much higher level now but that is still price sensitive. Take away a bit of that price advantage by higher non-tarriff barriers & the rush to China will reduce. As I have pointed out earlier, Chinese imports in the power sector has grown in leaps & bounds. The market exists there simply for the price, Indian manufacturers also occupy the space. Make the market difficult for Chinese companies & the benefit wil accrue to Indian manufactureres, albeit at a slightly higher cost to the buyer which may or may not be passed on. This is of course a theoretical discussion, merely pointing out that the situation is not as simple as he suggests.

You open the market and allow consumers and suppliers to buy the goods they want. It depends on quality and price. If Indian companies (that's if there are Indian companies that can make these goods which I doubt) cannot give products with good quality and affordable prices then it hurts them if they are priced out if buying their preferable Chinese goods.

You are shooting yourself in the foot by hurting your own consumers and companies.

 

[sovcomflot]

A growing economy has growing energy demands. So it's impossible to restrict oil imports because oil is essential to an economy. To say you want to restrict oil imports is ridiculous as energy is the core of economic development. You cannot grow without energy.

Yes oil does contribute to inflation in every country. But it's not the major contributing factor to the sticky inflation problem in India.

But I understand what you mean.



I just used tv as an example. It can be any good.

Biggest import component of India is Crude oil. I have stated enough in this.

Link global inflation and oil prices . Link global inflation and indian inflation .do a regression or correlation of the data. You will change your stance .