China is the main target of India’s anti-dumping actions with 55 of the total 62 anti-dumping and anti-subsidy investigations over the last two years involving imports from the neighbouring country. But the Indian industry, especially producers of steel and solar cells, are pressing for more protection with the likelihood of Chinese dumping incidents multiplying as the US tariff hikes on a range of Chinese items kick off from Friday.
The US decision to raise import duties on Chinese steel and aluminium, solar cells, EVs and batteries, as a response to the country’s “unfair trade practices” could result in China diverting at least some of these goods to India.
Market defence
“With rising imports from China, the government has been vigilant in safeguarding domestic industry, especially sectors such as steel, chemicals, plastics, and solar PV cells and modules against dumping. Most of the trade remedies implemented over the last few years have been targeted against China. There is a need to be more watchful with the US tariff hikes against China kicking in,” a source tracking the matter told businessline.
India’s imports of goods from China were a whopping $101.73 billion in FY24 with electric machinery, nuclear reactors and mechanical machinery, steel, chemicals, plastics and medical and surgical instruments topping the charts.
India’s exports to China in FY24 were at $16.64 billion resulting in a trade deficit of $85 billion which was about a third of the country’s total trade deficit of $241 billion in the past fiscal.
Dumping concerns
“Increased trade remedial tariffs on Chinese steel by the US is further going to impact the steel industry adversely, making it amongst the easiest destinations to dump excessive steel by China, which is heavily subsidised by the Government there,” Alok Sahay, Secretary Generally, Indian Steel Association (ISA) said.
Already, the Indian steel-makers have written to the Finance Ministry, urging more duties on imports, the thrust of the request is towards China.
Chinese steel prices are down 17 per cent YoY to $462 per tonne in September, YoY. In the year-ago period, it stood at $556 per tonne.
“Last year there was a 91 per cent increase of imports from China and this year the trend is continuing,” Sahay said, adding that the intensity of exports to countries having FTA with India, like ASEAN, Korea and Japan have increased.
Both the US and the EU are cutting imports of electric vehicles from China, according to a brief by the Global Trade and Research Initiative (GTRI) on the US tariff action against China published earlier this year.
“The increase of tariff on EVs, batteries and many other new technology items by the US may push China to dump these products in other markets including India. It’s a moment for India’s Directorate General of Trade Remedies to remain vigilant,” GTRI said.
India’s fledgling solar PV cell and module manufacturers, too, have been facing a lot of heat from China which accounted for 94 per cent of India’s cumulative solar PV cell imports and 93 per cent of solar PV module shipments in FY23.
The share of cells and modules fell to 56 per cent and 66 per cent, respectively, in FY24 but the import value of PV cells and modules from China surged to a record $6.21 billion during the fiscal.