Munish Gupta
WITH a trade deficit of $85 billion in 2023-24, New Delhi signalled its intent to safeguarding domestic manufacturers from predatory pricing by Chinese exporters, by slapping anti-dumping duties on five products from that country.
The Directorate General of Trade Remedies (DGTR) has recommended these duties on soft ferrite cores, vacuum insulated flasks of certain thickness, aluminium foil, trichloro isocyanuric acid and poly vinyl chloride (PVC) paste resin. These products were reportedly being exported from China (being dumped in India) at below normal or artificially low prices.
The Government action is second within this month. Earlier, the DGTR had recommended a 12 per cent provisional safeguard duty for 200 days on certain steel products to protect domestic players from a surge in imports. As of now, India has imposed antidumping duties on 99 Chinese products, including chemicals, petrochemicals, fibres, yarn, machinery items, pharmaceuticals, rubber and steel items, to protect its domestic industries from unfair trade practices.
This marks yet another chapter in India’s long-running trade friction with China. The two countries – both members of the World Trade Organisation – share a complex economic relationship.
While China is India’s second-largest trading partner, a significant trade deficit has emerged in recent years, reaching $85 billion in 2023-24. While such measures risk inflating costs for domestic consumers, these are permissible under the WTO framework. Article 6 of the General Agreement on Tariffs and Trade allows countries to counteract dumping to ensure fair competition. Thus, India is well within its rights to take corrective measures.
A temporary fix
However, anti-dumping duties are only a temporary fix. Chinese exporters often find ways to circumvent such restrictions by rerouting shipments through third countries. Indian industries must use this protective window to boost their competitiveness rather than rely indefinitely on trade barriers.
The Government has adopted a more sustainable approach to address the imbalance in India-China trade by undertaking deeper reforms. These include enhanced domestic production capacities, technology upgradation and a focused strategy to reduce dependence on Chinese imports. China remains India’s secondlargest trading partner, but tensions over market access and trade imbalances have persisted despite efforts at broader economic engagement.
Complex relationship
The latest round of duties is expected to add to an already complex trade relationship. As the trade imbalance continues to widen, policymakers are trying to balance the protectionist measures with long-term industrial self-sufficiency. To achieve a level of equilibrium in bilateral trade, India has set a target of nearly doubling its national efforts towards achieving at least near-parity in comprehensive national strengths in the shortest possible timeframe. The anti-dumping measures against China have also been prompted by an apprehension that Beining might turn to South Asia to dump its surplus production after Trump’s latest tariff war against it.
