India Tightens Trade Measures Against China
Amid growing concerns over trade imbalances and unfair pricing, India has imposed anti-dumping duties on several Chinese products, including vacuum flasks, aluminium foil, and essential industrial components. This move follows similar actions by other countries, such as the United States, which recently levied a hefty 45% tariff on Chinese aluminium exports.
The decision, based on investigations by the Directorate General of Trade Remedies (DGTR), highlights India’s efforts to protect domestic industries from an influx of cheap imports. With a trade deficit of $85 billion between India and China in the 2023-24 financial year, New Delhi has consistently sought to address market distortions through regulatory measures.
The Scope of India’s Anti-Dumping Measures
India’s Central Board of Indirect Taxes and Customs has announced anti-dumping duties on four key Chinese imports:
- Soft Ferrite Cores: Used in electric vehicles, chargers, and telecom devices, these will now be subject to an anti-dumping duty of up to 35% of their CIF (cost, insurance, and freight) value.
- Vacuum Insulated Flasks: Will attract a flat duty of $1,732 per tonne.
- Aluminium Foil: Duties ranging from $619 to $873 per tonne will be applied provisionally for six months.
- Trichloro Isocyanuric Acid: A key chemical used in water treatment, imports from China and Japan will face duties ranging from $276 to $986 per tonne.
These duties are expected to remain in place for five years, except for aluminium foil, which will be reviewed after six months. The DGTR’s findings indicate that these goods were being dumped into the Indian market at prices below fair value, harming local manufacturers.
The Justification for Anti-Dumping Duties
Under World Trade Organization (WTO) rules, member countries can impose anti-dumping duties if investigations confirm that imports are causing injury to domestic industries. The DGTR’s inquiry found that multiple Chinese companies were exporting aluminium foils to India at prices significantly below market rates. Among the firms identified were:
- Henan Mingtai Technology Development Co. Ltd.
- Henan Mingsheng New Material Technology Co. Ltd.
- Sunho New Materials Technology Co. Ltd.
- Shanghai Sunho Aluminium Foil Co. Ltd.
- Jiangsu Dingsheng New Materials Joint-Stock Co. Ltd.
- Inner Mongolia Lian Shen New Energy Co. Ltd.
- Hangzhou Five Star Aluminium Co. Ltd.
Rising Trade Imbalances and Market Concerns
India’s aluminium foil imports from China have been rising steadily. Trade data shows that in the first eleven months of 2024 alone, India imported 140,234 tonnes of aluminium foil from China—a 15.64% year-on-year increase from 121,272 tonnes in the previous year. The upward trend follows a 20.74% growth rate in the prior year, reflecting an ongoing surge in Chinese exports to India.
The fear among domestic producers is that, after the U.S. imposed tariffs on Chinese aluminium, even more Chinese products may flood the Indian market, further threatening local businesses. The latest duties are seen as a necessary step to curb this risk and protect domestic manufacturing.
Impact on India-China Trade Relations
While China remains India’s second-largest trading partner, tensions over market access have continued to strain economic relations. New Delhi has repeatedly raised concerns over the structure of trade, arguing that it disproportionately benefits China.
Despite being members of the WTO, both countries have engaged in repeated trade disputes, with India frequently resorting to anti-dumping measures to counteract what it sees as unfair trade practices. The latest duties are likely to add to an already complex and contentious economic relationship.
A Step Toward Fair Trade Practices
India’s decision to impose anti-dumping duties on Chinese products is a significant move to protect its domestic industries from unfair competition. While these measures may lead to short-term diplomatic frictions, they align with India’s broader strategy of reducing dependence on Chinese imports and supporting local manufacturing.
As trade tensions persist, the long-term effectiveness of these duties in balancing the India-China trade deficit remains to be seen. However, one thing is clear—New Delhi is committed to ensuring fair trade practices and safeguarding its economic interests.
(With inputs from agencies)
