Concerns Over Cheap Chinese Imports

Several countries, including India, are concerned that cheap Chinese imports could undermine local industries, particularly in light of increasing US-China trade tensions.

US Tariff Increases

• As of June 16, the US has increased tariffs on Chinese imports to 55%.
• This has raised concerns about China dumping surplus goods in other markets.

India's Use of Anti-Dumping Duties (ADDs)

• India is the world's largest user of ADDs, targeting not just China but other countries as well.
• From 1995 to 2023, India initiated over 1,100 investigations, more than the US or EU.
• In 2024 alone, India launched 47 trade remedy investigations, with 37 aimed at Chinese products.

Drawbacks of ADDs

• ADDs can increase costs for local industries that use taxed imports as raw materials.
• In March 2024, a 30% ADD on PCBs from China and Hong Kong raised production costs for IT hardware manufacturers by 1-4%.
• MSMEs are disproportionately hurt by ADDs due to regulatory compliance challenges.
• ADDs can conflict with national policy objectives, such as when solar glass ADDs increased solar PV module prices.
• Frequent imposition of ADDs creates uncertainty and disrupts business planning.

Policy Recommendations

• ADDs should be used carefully and backed by strong evidence.
• Implementation of an Economic Interest Test, similar to the UK's, could balance needs across sectors.
• Reforms to enhance local competitiveness are necessary, such as improved infrastructure and simpler regulations.
• India should focus on integrating into global supply chains, not retreating from them.