Five Indian companies with big China exposure

While the government’s initiatives such as ‘Make in India’ and ‘Aatmanirbhar Bharat’ have helped reduce this dependency to some extent, one cannot ignore that almost all sectors yet rely on China directly or indirectly.

Here are 5 Indian companies with a huge exposure to China.

#1 Tata Motors

Tata Motors is an Indian multinational automotive manufacturing company that produces passenger cars, trucks, buses, sports cars, and military vehicles.

The company derives more than 80% of its revenue from its subsidiary Jaguar Land Rover (JLR) which counts China as one of its key markets.

In the March 2021 quarter, Tata Motors swung to profit as a recovery in Chinese demand lifted sales of the automaker’s luxury sports cars and SUVs.

Sales of the company more than doubled in China as the region was least impacted by Covid-19. The numbers were particularly encouraging with sales growing on both a year on year and quarter on quarter basis.

It has also partnered with a Chinese company called Chery Automobiles for the manufacturing of JLR cars.

#2 VIP Industries

VIP Industries is India’s largest manufacturer of luggage and travel accessories. The company is dependent on China for around 50% of its manufacturing.

The soft luggage segment, which accounts for a major part of VIP’s revenue, is sourced predominantly from China.

This exposes the company to geographical concentration risk and forex risk.

To reduce the dependence on Chinese imports, VIP Industries aims to reduce the supplier exposure from China to about 25% from 88% mainly through backward integration and by rationalizing other supplier options.

Given the lower labour costs in Bangladesh, it’s ramping up its operations in Bangladesh which should help reduce its direct imports from China and improve its profitability.

#3 Voltas

Voltas is an Indian multinational home appliances company specialising in air conditioning and cooling technology. The company was incorporated in 1954 as a collaboration between Tata Sons and Volkart Brothers.

Among white goods manufacturers, Voltas has the highest dependency on China for its compressors and controllers.

The company plans to consider a joint venture with Chinese players for the manufacture of these components as they are expected to be more cost-competitive.

Voltas also relies on China for inner door units but the dependence on imports has come down from 93-94% three to four years ago to 70%.

With the company actively investing in its own inner-door moulds every year, this would further reduce to 50% over the next three to four years.

#4 Caplin Point Laboratories

Caplin Point Laboratories is a fast-growing pharmaceutical company that develops a wide range of generic formulations and branded products. It caters predominantly to the emerging markets of Latin America and Africa.

The company has a branch in China to source its raw materials and finished goods for import and export.

It has also entered into a joint venture (JV) with Hainan Jointown Caplin Point Pharmaceuticals which is an US$11 bn publicly traded distribution company in the Hainan Province of China.

The JV will focus on the trading and manufacturing of various pharmaceutical products between China, India, and South America, for sustainable growth.

Caplin holds a 39% stake in the company. It has been agreed between both parties that the entire business arising out of this entity will be routed through Caplin and/or its subsidiary.

#5 Kingfa Science & Technology

Kingfa Science & Technology is engaged in the business of manufacturing and supplier of high quality reinforced polypropylene compounds, thermoplastics elastomers and fibre reinforced composites.

The company is owned by the hugely powerful Chinese company, Kingfa China, which is one of world’s largest plastic compounders.

Kingfa China holds a 75% stake in the Kingfa Science & Technology. The company’s management is also Chinese.

Kingfa Science & Tech is likely to be a key beneficiary of the trade war with China as it would mean more business for the Indian firm since a lot of rerouting will happen. The parent firm is very bullish on India.

As you can see from the above list, India’s dependency on China manifests in different ways.

Despite all attempts by the Government of India to reduce the country’s economic dependency on China, India’s bilateral trade with China came in higher by 62.7% year on year (YoY) at US$ 57.5 bn in the first half of 2021.

This is the highest in recent years amid the Ladakh impasse and the Covid-19 pandemic, according to data released by China’s Customs and indicates that decoupling may not be an easy option.

Preventing an over-reliance on Chinese supply chains and China’s entry into strategic domestic sectors will help alleviate heightened concerns to a certain extent.

But to tackle this in the long term, Indian policymakers will have to take a more strategic view of their economic engagement with China, putting aside the somewhat tactical approach of the last few decades.

For India’s economic diplomacy to be successful in meeting its objectives with China, it will have to be calibrated at multiple levels, bilateral being only one of them. It will have to include regional and multilateral measures as well.

(This article is syndicated from

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