How Bright Lights Of Diwali Hide A Dark Trade Truth Between India And China

Diwali 2025: Each Diwali, streets and homes across India come alive with LED string lights and ‘ladis’, tiny, blinking symbols of festivity. But behind these colourful strands lies a more sobering story: a significant gap in India’s manufacturing ecosystem. This gap undermines the spirit of ‘Make in India’ and ‘Buy Swadeshi’ campaigns, not through complex economic theory, but through something as everyday as decorative lights and connectors.

The story begins at a large electrical and hardware store in South Delhi, although it could just as easily be in any Indian city. Like many, I visit this store annually to replace a few faulty string lights. The replacements, as always, were Chinese, thin wires, not unlike the infamous Chinese manjha threads.

Interestingly, the quality of these Chinese lights has steadily improved. A 10-meter Chinese light strip costs between ₹95 and ₹110. This year, however, I was offered Indian-made alternatives. Better quality, I was assured, but priced at Rs 220 each, double the cost.

The salesperson delivered a convincing pitch — “These will last for years.” That sealed the deal. I needed three replacements, but ended up buying five Indian string lights and a connector. That’s where things started to unravel.

The connectors, which are supposed to be universal, weren’t compatible. The Indian-made string lights had thicker two-pin plugs that didn’t fit into the smaller Chinese-made connector sockets. When I called the store, the response was casual, “There’s no ready-made connector for these Indian lights,” they said. “But come over, we’ll show you a jugaad,” followed by a chuckle.

So despite paying a premium for Indian lights, I was now expected to resort to makeshift solutions because no one, neither the manufacturer nor the retailer, had considered the complete customer experience.

Back at the store, I bought wires, sockets, and plugs. With the help of YouTube tutorials, I built my own ladi connector. It works well and should last years, but the effort costs more, both in time and money, than a ready-made Chinese connector, which retails at around ₹100.

Why didn’t the Indian manufacturer anticipate this need? Why not produce or source connectors suited to their own lights? Why didn’t someone spot the opportunity to fill this gap?

Diwali: Lighting Up China’s Economy

The scale of this market is vast; millions of lights and connectors are sold every year during Diwali. Yet most of the profits head straight to China. There is no Indian source that tracks Diwali-related imports from China, but a 2022 Global Times report offers insight. It stated that in the first half of that year, “China exported $710 million-worth of LED light-related products to India, a year-on-year increase of 27%.”

This is just a fraction of a larger economic picture. India’s trade deficit with China hit $99 billion in the 2025 financial year. And the festive lights we buy contribute to this imbalance.

Despite repeated political appeals to reject Chinese products in favour of Indian ones, the reality remains unchanged. China has built a mature industrial chain; LEDs and connectors are made together, ensuring a seamless consumer experience. In contrast, India still leaves customers to cobble together fixes.

As the Global Times observed in 2022, despite India’s “relentless” push to decouple from China, “there has been little progress.” The continued rise in demand for Chinese goods proves the point.

Even Chinese analysts are confident India won’t catch up soon. Liu Zongyi of the Shanghai Institutes for International Studies told Global Times, “Although India has been vigorously developing its manufacturing industry over recent years, it has not formed the advantages of a full industrial chain, mainly due to the relatively low quality of labour, the lack of support policies covering land and taxation, in addition to less developed infrastructure.”

Why Indian Manufacturing Still Stumbles

The biggest hurdle is cost. Indian consumers are price-sensitive, and Chinese products continue to outmatch local ones on affordability. While Indian string lights cost more than Rs 200, Chinese versions are available for around Rs 100.

A trip to Old Delhi’s Bhagirath Palace, one of the largest wholesale electrical markets in the country, reveals the extent of Chinese dominance. According to China Daily, Anup Yadav of the Bhagirath Palace Market Association said in 2023, “Several Indian manufacturers have converted their festive lights warehouses to store imported Chinese decorative lights or LED lights because of the dearth of demand for Indian-made lights.”

Clearly, calls to buy Swadeshi ring hollow without competitive Indian alternatives. For Indian products to truly replace imports, they must not only match but exceed them, in both quality and price.

But for that to happen, sweeping reforms are required. The backbone of Indian manufacturing, the Micro, Small, and Medium Enterprises (MSMEs), is struggling under red tape, restrictive policies, and limited access to capital. While a few large conglomerates thrive, the wider manufacturing ecosystem is faltering.

India urgently needs comprehensive land, labour, and capital reforms. Cosmetic changes won’t suffice. And with the demographic dividend slowly shifting towards a potential demographic burden, time is running out.

A Lightbulb Moment For Indian Industry?

The humble Diwali light and the missing connector tell a bigger story. It’s about how even promising Indian products fall short because the broader ecosystem doesn’t support them. Millions of Indians would prefer to see Indian products lighting up their homes during the festival of lights, but that can only happen when our industries are equipped to deliver complete, competitive solutions.

Until then, Diwali may continue to brighten Chinese balance sheets more than Indian homes.