India’s trade war with China begins
2023.01.30 10:43
India’s trade war with China begins
By Tiffany Smith
Budrigannews.com – According to two government officials and an industry source, India is considering a number of non-tariff measures and tariffs to reduce imports of non-essential consumer and electronic goods, including from China, as trade imbalances concern policymakers.
According to three sources who did not wish to be identified, as many as 18 important government departments, led by the federal trade ministry, met last week to finalize initial measures aimed at reducing imports from China, which account for nearly a third of India’s trade deficit.
Since 2020, when border tensions flared along a contested frontier, India has attempted to reduce its trade deficit with China, but the effort has been unsuccessful because China is a key and inexpensive supplier of goods such as active pharmaceutical ingredients, electrical equipment, and a number of chemicals.
India’s domestic demand continued to support Chinese imports in April-December 2022, while COVID lockdowns in China hampered imports from India. As a result, the trade gap with China widened by 28% over the same time period a year earlier.
One of the officials stated that the government is considering intensifying investigations to eliminate unfair practices on a “wide array” of imports from China and other countries, without specifying which goods or the unfair practices.
According to a source in the industry, products like printed circuit boards and a type of toughened glass imported from China have been the focus of anti-dumping investigations thus far this year.
The official stated that safeguards such as the imposition of anti-dumping duties would be necessary in the event that a trading partner was found to have engaged in unfair practices.
China’s embassy in New Delhi and India’s federal trade ministry did not immediately respond to requests for comment.
According to government data, India’s overall merchandise exports decreased by 12% in December compared to the previous year, while merchandise imports decreased by 3%, thereby widening the deficit by 13%.
The two government officials added that India would also intensify inspections of imported goods to ensure that they meet national quality standards.
The Indian government may identify the expanding trade deficit as a significant downside risk to the economy in its Economic Survey for the beginning of the new fiscal year on April 1.
In the budget on February 1, the government will likely also outline some of the steps it will take to address the problem.
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