India plans measures to curb Chinese imports as trade gap concerns mount -sources


New Delhi (Reuters) – India is considering a number of tariffs and non-tariff steps to cut imports of non-essential consumer and electronic goods, including from China, as trade imbalances concern policymakers, two government officials and an industry source said.

As many as 18 key government ministries, led by the federal trade ministry, met last week to firm up steps first aimed at cutting imports from China, which accounts for nearly a third of India’s trade deficit, said the three sources who declined to be named.

India has been trying to reduce its trade deficit with China since 2020, when border tensions flared along a contested frontier, but with little success as the country is a key and cheap supplier of goods including active pharmaceutical ingredients, electrical equipment and several chemicals.

The trade gap with China widened 28% in April-December 2022 from the same period a year earlier, as India’s domestic demand continued to support Chinese imports while COVID lockdowns in China crimped imports from India.

The government is considering ramping up investigations to weed out unfair practices on a “wide array” of imports, from China and elsewhere, one of the officials said, without specifying which goods or what the unfair practices were.

The industry source said that so far this year anti-dumping investigations have focussed on products such as printed circuit boards and a type of toughened glass imported from China.

If a trading partner were found to have engaged in unfair practices, it would be necessary to introduce safeguards such as the imposition of anti-dumping duties, the official said.

India’s federal trade ministry and China’s embassy in New Delhi did not immediately respond to requests for a comment. China’s commerce ministry also had no immediate comment.

India’s overall merchandise exports fell 12% in December from a year earlier, while merchandise imports dropped 3%, widening the deficit by 13%, government data showed.

The officials said India would also intensify checks on imported goods to make sure they adhere to national quality standards, the two government officials added.

Reuters reported last week that the government could highlight the rising trade deficit as a major downside risk to the Indian economy in its Economic Survey going in to the new fiscal year from April 1, Reuters reported last week.

The government is also likely to detail some of the steps to tackle the issue in the Feb. 1 budget.

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