The PRC-India Trade Imbalance, c/o 'Shamsung'

Spot the fakery

When it comes to globalized commodities, you probably cannot outdo Chinese no-name electronics as PRC-sourced fakes are the wares of street hawkers the world over. Hence, the 'Shamsung':

Made-in-China products are also flooding into Indian markets served mainly by small and midsize local companies [read: mom-and-pop shops given limited inroads made by retail trade liberalization]. The deluge of Chinese imports is beginning to further strain a tense bilateral relationship, which is traditionally prickly because of a territorial dispute.

Indian consumers are for now embracing cut-price Chinese offerings. That may not be the case if they find themselves out of work because of relentless competition from low-cost manufacturers over the border.

Take a walk through an Indian market and the scale of the issue becomes clear. Fake Chinese cellphones are clearly visible in the sprawling black markets of Mumbai, the country's biggest commercial center. Legions of vendors spend their days selling counterfeit Samsung Electronics and Taiwan's HTC phones. Cheaper look-alikes can also be bought with little fuss. Hordes of eager shoppers bustle through the warren of cramped shops, haggling over prices.

That's at a local level. At the international level, it all adds up to an overwhelming trade balance in favor of China over India. Where have we heard this story before?

Indian companies typically import nonbrand products from China and sell them in India at extremely low prices, a senior executive at a Japanese appliance maker said. India's smartphone market is a microcosm of what is going on at a macro level. The country runs a chronic and growing trade deficit with China.

In the fiscal year through March 2013, India exported some $13.5 billion worth of goods to China and imported $52.2 billion's worth. The government in New Delhi wants to narrow the trade gap. Consumers in India benefit from the bargains, but the trade imbalance is a source of economic tension between the countries.

It's funny how the Chinese are now aping Koreans when the latter were famous for making fake European leather goods for the longest time. Meanwhile, Chinese firms don't particularly care who they are copying as long as they are able to sell their fakes. If imitation is the sincerest form of flattery, then South Korea has gone a long way. At any rate, the PRC-India trade imbalance isn't exactly improving as a result.