Delhi Rings Alarm Bells Of Dumping, Rerouting Chinese Goods

The Chinese small and medium enterprises (SME) have already started to feel the pinch. The trade war would naturally lead to over capacity of goods. That apart, the surge in export orders for Vietnam has also caused worry India’s policy markers.

Analysts said many of these exporters could be of Chinese origin. A large number of Chinese SME firms already operate in Vietnam and their investment is likely to go up.

In his recent visit to Hanoi, Chinese President Xi Jinping said Beijing is keen to increase investments in Vietnam, a report published by South China Morning Post said.

Dumping Concerns

“China is an export-driven economy. With the trade war, there could be an oversupply of goods, and naturally, it will be keen to find markets for its goods. India needs to be careful,” Ajay Sahai, Director-General, Federation of Indian Export Organisation (FIEO) said.

Sources said the exercise of rerouting goods through a third country could also increase. However, a government official assured that all necessary measures were being taken and that there was no cause for worry.

“There have been instances of dumping and rerouting of goods from other countries, especially China, and the government must take necessary steps to protect the domestic manufacturers,” Ashwani Mahajan, national co-convener of Swadeshi Jagaran Manch (SJM) told The Secretariat.

Mahajan said the government and its related departments need to take stock of goods being rerouted through a third country as well. “The authorities need to be watchful of goods manufactured by Chinese factories operating in third countries. We need to check rerouting of goods,” he said.

An official source said that additional safeguard duties are being considered in certain sectors such as steel and aluminium. Sources said that dumping of other items, including raw materials and other commodities, could rise. The focus for the authorities concerned needs to be expanded, they added.

In March, the Directorate General of Trade Remedies (DGTR) suggested an anti-dumping duty on roller chains and pretilachlor, a broad spectrum herbicide from China. That apart, the body recommended anti-dumping duties on imports of acetonitrile, a solvent required for industrial applications, sourced from Russia and Taiwan, besides China.

Last year, anti-dumping duties were imposed on a few Chinese goods, besides steel. These include glass mirror, cellophane transparent film, isopropyl alcohol, sulphur black, etc. The source said the customs department has been asked to up its ante.

The government has also asked domestic exporters not to reroute Chinese goods through India. Most countries especially the Southeast Asian economies are adopting caution as well to rule out rerouting of Chinese goods from their soil.     

US Tariff On China

While the US has pressed the pause button on reciprocal tariffs for all countries, China has not been spared. At the time this story was published, Washington had raised its import duty on China from an already high of 145 per cent to a whopping 245 per cent.

Meanwhile, Chinese Foreign Ministry spokesperson Lin Jian, in the regular press briefing, said the US is using tariff as a weapon to exert maximum pressure and seeking selfish gains, while putting its own interests over the public good of the international community.

“This is a typical move of unilateralism, protectionism and economic bullying, which severely hurts the interests of China, the EU and the rest of the world,” he said.