Non-Tariff Barriers In China Prompts India To Tighten Remedial Measures

New Delhi, Oct 23 (KNN) Relations between India and China remain far from their pre-2020 levels, despite tentative signs of easing.

India has reinforced its stance on maintaining non-tariff barriers to control the influx of Chinese goods, signalling that it will not compromise on protecting domestic industry. Government officials have stressed that this approach is unlikely to change soon.

India’s trade deficit with China continues to widen, highlighting structural issues in the bilateral trade relationship. While Chinese imports into India surpassed USD 100 billion in FY24, Indian exports to China have stagnated at around USD 16 billion.

External Affairs Minister S. Jaishankar recently criticized the asymmetry, stating that Indian goods face significant barriers in China, particularly in agricultural and pharmaceutical sectors.

A working paper by the Economic Advisory Council to the Prime Minister (EAC-PM) outlined the challenges posed by Chinese non-tariff barriers.

While China’s housing crisis and the “China-plus-one” strategy pursued by multinational corporations have prompted efforts to reduce dependence on China, government officials acknowledge that a complete decoupling is unrealistic.

India faces a complex trade-off between reducing Chinese imports and attracting Chinese investment to support its domestic manufacturing ambitions.

The government has signalled openness to joint ventures where Chinese companies can invest alongside Indian partners, provided they hold a minority stake.

Recent examples include SAIC Motors divesting its majority share in MG Motors to India’s JSW Group, and Shein’s re-entry into India through a partnership with Reliance Retail. Officials suggest that this controlled engagement could be expanded to non-sensitive sectors.

India has intensified anti-dumping measures against China, launching over 30 investigations in 2024 alone. Products targeted include industrial machinery, vacuum-insulated flasks, and stainless-steel tubes, as India seeks to counter what it describes as China’s predatory pricing strategies.

Quality control orders requiring Bureau of Indian Standards (BIS) certification have also been increased to block substandard imports.

While some sectors are opening to Chinese partnerships, restrictions remain tight in sensitive industries, especially telecommunications. India is also strengthening its presence in the Indian Ocean to limit China’s regional influence.

A Commerce Ministry official revealed that a free trade agreement (FTA) with the Maldives, driven more by geopolitical strategy than economic value, is in the works.

The road ahead for India-China relations is marked by strategic caution, as India balances economic needs with geopolitical imperatives.

While Chinese investment may find limited acceptance, India is poised to maintain a hard line on imports, prioritising self-reliance and the protection of domestic industries.

(KNN Bureau)