There is nothing to romanticize about Greece of 2010. Once the world's mightiest nation, the early 21st century Greece has put the whole European Union (EU), of which it is a member, to shame. If the EU and the International Monetary Fund (IMF) had put together a US$ 1-trillion financial rescue package for Greece, highest ever for any economically sick country, it is because the Mediterranean state is part of prestigious EU and, therefore, it can't be allowed to sink. Greece's problem is: it has long been living on borrowed capital, imported goods and high fiscal deficit.

Is there any lession for India, the public debt of which now stands at 78 per cent of its GDP, to learn from Greece's debt crisis? Ironically, like highly artistic ancient Grecian urn, the famous Indian terracotta is a vanishing pottery today, with the reddish-brown clay products being priced out by cheap Chinese synthetic substitutes, which are flooding the country. India too has been living on borrowed capital, both internal and external, and imports. The fiscal deficit too is high, though not alarming. The Chinese incursion into India's hitherto most vibrant small and cottage industry sector, a mainstay of the country's rural economy after agriculture, is real and posing a threat to the livelihood of tens of millions of poor artisans, craftsmen and weavers. Indirectly, it is also pushing up India's external debt burden as trade deficits with China are constantly soaring to increasingly uncomfortable levels. Uncontrolled imports from China in recent years have been a key reason of India's external trade deficit zooming up to US$ 120 billion in 2008-09. The country's trade deficit during the first nine months of 2009-10 was US$ 90 billion. The countries with which India has been traditionally running large trade deficits such as Saudi Arabia are petroleum crude suppliers to India. Imports from China are almost entirely manufactured goods, which compete with Indian goods and Indian labour.

With India's annual trade deficit with China having already soared to $ 25 billion, the highest with any of the country's trading partners, including Saudi Arabia, the made-in-China items - from terracotta substitutes to telecommunications equipment, toys to industrial towers, air-rifles to air-conditioners or from simple wallpaper to power plants - are becoming an increasing threat to the working class, the skilled or unskilled, and the economy as a whole. In high technology areas such as power and telecommunication, the Chinese incursion is also posing a national security threat. From nowhere only a few years ago, Chinese digital broadband equipment are now almost in total control of India's multi-billion dollar telecommunications service business. Thanks to the country's liberal import policies, Chinese Huawei and ZTE, the telecom companies, which are on the radars of India's security establishments under the home and defence ministries, are minting billions of dollars with the help of Indian service providers. India's increasing dependence on underpriced Chinese supplies are standing in the way of the growth and progress of its industrial sector at all levels and almost for all products - small or big, from Rs 2 each sewing needles to Rs. 2,000-crore turn-key power plant.

No country has penetrated into the Indian market so completely and deeply as China and that too also in such a short period since 1998. In rupee term, India had Rs. 92,676-crore trade deficit with China in 2008-09, well ahead of the same with Saudi Arabia, the country's major source of petroleum crude import, at Rs. 64,300 crore. The United States of America (USA), which has been displaced by China as India's No. 1 trading partner, in fact, gave India a trade surplus of Rs. 12,250 crore during the year. Germany ranked third in India's trade deficit at Rs. 19,500 crore for 2008-09. Among the country's top ten trading partners, India had surplus balance of trade (BoT) with four. Soaring imports and negative export growth are constantly raising India's foreign exchange liability on trade account. This being serviced from the Reserve Bank's foreign exchange kitty, built out of contribution from foreign direct investment (FDI), inflow from foreign institutional investors (FIIs), external commercial borrowings, remittances, NRI deposits and other borrowings. The annual trade deficit with China alone is more than the normal annual FDI inflow. In other words, China is eating away most, if not all, of India's FDI. Highly undervalued Yuan and systematic dumping of goods are giving China a big price advantage over products made in India. Indian products are simply priced out by their counterparts from China. China and its import agencies in India are making huge money. The loser is the Indian industry and Indian labour.

Surprisingly, no one seems to be losing sleep over the growing Chinese trade and economic aggression on Indian soil. There is a strong pro-China lobby in the government and a powerful section of India's wealthy business community, the biggest beneficiary of the trade with China. No wonder that US-educated Jairam Ramesh, India's environment minister, used his latest China trip to criticize the country's China policy towards job visa to Chinese employees and import of security-linked telecom equipment as 'alarmist' and 'paranoid.' Ramesh was, obviously, speaking the mind of the Indian business community dealing in Chinese products and raking in large profits. At least, Ramesh showed the guts to publicly expose his cover although he is not in a position to be of any direct help to China. But, what about those powerful policy makers in the United Progressive Alliance (UPA) government, who have been silently working for Chinese exporters even to the detriment of the country's defence and financial security? The Chinese telecom vendors such as Huawei have the capability of installing spyware and malware to secretly monitor voice and data traffic and disable networks. These companies are employing all kinds of tricks to establish their strangle hold over the Indian telecom equipment market. Export serves as the backbone to China's economic might. China's 'trade dependency' is now reckoned to be 70 per cent of it GDP, according to a World Bank report.

India's economic growth without a balanced trade and reasonably good surplus in balance of payment is of no real and lasting value to the nation. An export thrust of value-added goods and services combined with a reasonably restrictive import policy with regard to goods and services for which the country has adequate internal capability to deliver alone can ensure the country's long-term financial stability. India's energy import burden - of both crude oil and coal - is already a big concern and the pressure will increase in the coming years. So will its import dependence of fertilizer and certain food items such as edible oil and pulses. To pay for these heavy, high cost imports of essentials, India must build a strong export industry of manufactured goods and services and, simultaneously, cut down import of non-essentials. Instead of importing defence equipment and ships, India could become a global hub for manufacturing these items. It has the necessary infrastructure and trained workforce for the purpose. Only an industrially and financially strong India can squarely meet its other security concerns such as energy, food and territorial integrity. May be, soon it will be time for a modern poet to write an ode on environment-friendly artistic Indian terracotta that holds the potential to decorate the kitchens and drawing-rooms of the rich and the poor alike the world-over, including China. (IPA Service)