China ‘has scope to hit back’ at any Indian economic sanctions

Beijing has so far showed no signs of responding to calls in India for boycotts of Chinese goods but it has some room for retaliation if needed, economist says

‘Indian businesses and consumers likely to be main parties harmed’ by punishment of China

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Protesters take part in an anti-China demonstration at a commercial area in Ahmedabad on Wednesday. Photo: AFP

Published: 8:30pm, 29 Jun 2020Updated: 10:58pm, 29 Jun 2020

China could hit back at India over economic sanctions if the two countries’ deadly border row spills over into trade and investment, observers said.

Calls for boycotts of Chinese goods have grown in India in the last two weeks since at least 20 Indian soldiers were killed in a border skirmish in the Himalayas with Chinese troops.

At a ceremony on Sunday in honour of the soldiers, Indian Prime Minister Narendra Modi encouraged Indians to buy more goods from domestic producers.

“A self-reliant India would be a tribute to our martyrs in the truest, deepest sense,” Modi said.

Last week, India ordered vendors on a government run e-commerce platform to label the country of origin of products, and include a filter to show “made in India” products.

And on Monday, India’s Economic Times reported that the government was considering investigating Chinese shell companies based in Southeast Asia that may be shipping goods on to India.