India's latest duties on Chinese products to hurt Indian consumers

India's imposition of additional import tariffs on three Chinese products — wheel loaders, gypsum tiles, and industrial laser machinery — will hurt domestic users of those items as they will now face higher prices, though the duties could provide some comfort for Indian manufacturers, experts said.

According to an official notification, a government agency has determined that the Chinese products have been exported to India at below normal value, with the "dumping" causing material injury to the domestic industry.

Following the investigation, antidumping duties, ranging from 18.84 percent to 82.71 percent, are being imposed and will remain in force for five years, the government said. The notification was issued late last month.

The imposition of anti-dumping duties follows the recommendations of the Directorate General of Trade Remedies, or DGTR, an investigation arm of India's commerce ministry.

According to a separate notification from the Central Board of Indirect Taxes and Customs, an entity under the federal finance ministry, duties have been imposed on gypsum board/tiles with lamination at least on one side.

Such duties have also been imposed on industrial laser machines, in fully assembled, semi-knocked down (SKD) or completely knocked down form, used for cutting, marking, or welding operations; and wheel loaders imported in the form of completely built unit (CBU) or SKD.

The anti-dumping duties imposed under these notifications will be levied for five years unless revoked, superseded or amended, according to the notifications.

Sebastian Morris, a former professor at the Indian Institute of Management in Ahmedabad, said the extra tariffs on Chinese products spell good news for domestic manufacturers as they had been pushing for it.

However, Indian users will be hurt as they can no longer buy the products cheaply, he said.

Morris pointed out that China is able to export the products at cheap rates due to the competitiveness of its industries, which other countries cannot match.

The best way to support the Indian industry is to reduce the power tariffs, improve the infrastructure and lower the interest rates, he said, adding that anti-dumping duties will not be sustainable in the long run.

China may approach the World Trade Organization (WTO) to challenge the Indian government's decision, Morris added.

India's moves come at a time when its imports from China have increased only marginally and its trade deficit vis-a-vis China has declined, said Biswajit Dhar, former professor at the Centre for Economic Studies and Planning at Jawaharlal Nehru University in New Delhi.

Protecting the domestic industry, therefore, stands out as the government's overwhelming motive for imposing antidumping duties, he said.

China has a huge advantage and no other country can compete with its manufacturers because of their huge economies of scale, Dhar noted.

Countries initiate anti-dumping probes to determine if the domestic industry has been hurt by a surge in below-cost imports. As a counter-measure, they impose duties under the multilateral WTO regime.

India and China are both members of the Geneva-based WTO.

In September last year, India's finance ministry issued a notification that an "anti-dumping" duty of $613 per ton is being levied on flat-base steel wheels imported from China.

The decision was taken after Indian steel producers and sellers sought government intervention, complaining that Chinese stainless steel products have grabbed a significant portion of India's domestic steel market by selling at lower prices than domestically-made products.

For the 11 months to November 2023, India's trade deficit with China stood at $90.27 billion — $2.16 billion lower than what was recorded for the same period in the previous year, according to data from China's General Administration of Customs.

The writer is a freelance journalist for China Daily.