Home>News Center>Bizchina>Review & Analysis

Tariffs remain major concern for China
(China Daily)
Updated: 2004-06-25 10:26

Editor's note: The Ministry of Commerce recently issued a foreign market access report, which summed up Chinese companies' trade and investment environments with its 19 major trading partners in 2003 and shows the ministry's concern about barriers in some foreign markets.

Following are excerpts about India:

India was China's largest trading partner in South Asia. According to China Customs, the bilateral trade volume between China and India in 2003 reached US$7.59 billion, up by 53.6 per cent, among which China's exports to India were US$3.34 billion, up by 25.2 per cent, while China's imports from India were US$4.25 billion, up by 87 per cent. China had a deficit of US$910 million.

Tariffs administrative measures

High tariffs are imposed on certain import products. Though peak tariffs for the fiscal year of 2003-04 were lowered from 30 per cent to 25 per cent, the downturn adjustment did not cover most agricultural produce. Instead, the tariffs for agricultural produce were raised. For example, the tariff on imports of garlic was raised from 30 per cent to 100 per cent at the same time as quantitative restriction was eliminated in January, 2003.

High import tariffs, particularly on household electric appliances, motorcycles and components and garlic impeded the entrance of relevant Chinese products into the Indian market.

Tariff quota administration is applied to the imports of certain products. The Directorate-General for Foreign Trade (DGFT) is responsible for the allocation of quotas and procedures are very complicated.

Before importation,Indian importers should submit import applications to DGFT headquarters in Delhi, and the Import and Export Promotion Committee of the DGFT will then decide the amount approved to import. There are strict qualification requirements on granting quotas and severe time limits on transactions. In addition, quotas are only allocated to large State-owned companies. Thus, many of the quotas are wasted.

Barriers in customs procedures

There are no clear provisions in Indian laws and regulations on withdrawal of imported cargo. In practice, the Indian customs authorities usually require the exporter who applies for withdrawal to present a no-objection certificate/letter signed by the intended importer. However, importers concerned are usually reluctant to sign a certificate/letter of this kind, and as a result, exporters concerned cannot collect their cargo in the normal way. Chinese enterprises suffer great losses.

Technical barriers

The detailed rules of the Law on Drug and Cosmetics stipulates that foreign drugs may not enter the Indian market unless they have obtained an Indian registration certificate since April of last year, and the registration certificate has to be renewed every three years. The Indian Ministry of Health charges manufacturers US$1,500 for each of the drugs' registration and US$1,000 for the registration of each drug. Foreign drug manufacturers shall pay the Indian Drug Bureau US$5,000 for filed inspection. In addition, fees shall be paid when obtaining each import license and for the testing of each drug.

However, some Chinese pharmaceutical companies, who have handed in all the required documents and paid the relevant registration fees, have failed to receive registration certificates issued by the relevant Indian authorities within the stipulated time. Some Chinese companies have failed to receive import licenses after completing registration.

This sort of situation increases the business risk of Chinese exporters, and the practice restricts Chinese exports to India. The Chinese side is concerned about the transparency of the implementation of registration requirement.

Trade remedies

By the end of 2003, India had initiated 71 anti-dumping investigations, one safeguard investigation and one product-specific safeguard investigation against Chinese products. India has become one of the developing countries initiating most trade remedy investigations against Chinese products. In 2002, India initiated 16 anti-dumping investigations on Chinese products involving an export volume of US$64 million. In 2003, India initiated six anti-dumping investigations involving an export volume of US$28.3 million.

India refuses to recognize China as a market economy in its anti-dumping investigations.

The Anti-dumping Law, amended in 2001 and 2002, provides standards on how to take a country as non-market economy and how to grant individual companies market economy treatment in these economies. However, in the absence of procedure provisions for companies to apply for individual market economy status and without any questionnaires on market economy delivered by the investigation authority, Chinese companies can find no way to present a case for their market economy status in anti-dumping investigations.

After several negotiations initiated by the Chinese side, the relevant Indian authority formally required Chinese responding companies to reply to 15 to 20 questions since January last year. In 2003, the Indian inspectors conducted market economy inspections in seven newly initiated and two review cases. The Chinese side is still waiting for India's decision on whether to grant individual market economy status.

  Story Tools  
  Related Stories  
China begins cutting average tariff rate to 10.4%
Vice-premier urges closer China-US trade co-op
Chinese furniture makers protest US duties
China likely to maintain import, export balance this year
4 points proposed to address distortions in trade