China has for long dumped sub-par products in other nations thus raising its exports and destroying industries in those nations. India has also been a victim of this for a long time which has led to an expanding trade deficit. But the Narendra Modi government is working to reduce the trade deficit by doing two things – imposing duties on imported products and encouraging production in India through ‘Make in India’ – both of which will take some time to show results.
Now the government has imposed anti-dumping duty on 98 products being imported from China. Some of the products on which the duty was imposed include flax fabrics, vitamin C, and certain fibres and chemicals.
During April-October 2017, trade deficit with China stood at $36.73 billion. “Increasing trade deficit with China can be attributed primarily to the fact that Chinese exports to India rely strongly on manufactured items to meet the demand of fast expanding sectors like telecom and power,”Minister of State for Commerce and Industry C R Chaudhary said.
Countries initiate anti-dumping probes to determine if the domestic industry has been hurt by a surge in below-cost imports.Antidumping measures are taken to ensure fair trade and provide a level-playing field to the domestic industry.
One Indian industry that was under severe pressure was our iron and steel industry. InMarch 2016, India’s iron and steel imports were about three times their exports and local steelmakers were pleading with the government for protection. One year on and the industry achieved the unimaginable – India’s iron and steel exports during March 2017 were more than double their imports.
Credit for this was given primarily to the Modi government’s decision to protect the domestic industry by imposing a minimum import price (MIP), anti-dumping duty, etc. on steel imports.
Such moves will surely benefit domestic industries. Exports will rise and many more jobs will be created in the country. But this is a slow process because you can’t simply ban Chinese products in the snap of fingers. We need domestic industries that have the capability of filling in the vacuum that would be created by banning import.