The Indian government has ramped up efforts to counter unfair trade practices by levying heavy anti-dumping duties on goods originating from China that are exported at excessively low prices to harm domestic producers. Data shows over one-third of such duties imposed in the last three fiscal years have targeted products manufactured by either a single Indian company or just two producers.
According to investigations, between 2019-2024 imports from China grew substantially from $70 billion to $101 billion. However, exports to China from India saw no corresponding rise, remaining steady at about $16 billion each year. In light of this lopsided trade, authorities have sworn to protect local industries from unfair competition through stringent tariffs.
Between 2020-2023, the trade ministry recommended duties on 92 investigated cases of alleged dumping. Around 33% of these covered goods made by sole or two domestic firms, primarily in the chemicals sector. Subsequently, penalties were levied in 46 instancesaccepted by the finance department. Of these 37% exclusively impacted chemical products from sole suppliers.
The new duties have successfully shielded manufacturers like Sudarshan Chemicals and Gujarat Fluorochemicals. However, considerations of downstream users who rely on cheap imports as raw materials have also guided the finance ministry's decision making. Balancing these perspectives in each situation requires careful examination of evidence.
Over 60% of the recent duties targeted China exclusively, with another 26% applying to China and at least one other country. Significantly, the acceptance rate of recommended penalties by the trade department jumped to 86% last fiscal versus 42% in prior years. This changing stance displays growing resolve to employ tariff mechanisms as remedies for unfair exchange practices as permitted under global trade rules.
While protecting vital industries, some argue sole producers can exploit the system. However, others reason supporting a domestic monopoly may be preferable to relying on foreign control. As either path involves trade-offs, designating appropriate policy in each case remains a delicate exercise.
As India-China economic interdependence grows, ensuring a level playing field becomes increasingly important. Continued monitoring and corrective intervention can help boost India's self-sufficiency and technological progress, lowering excessive reliance on any single external partner over time.
