Amid the Doklam standoff between Indian and Chinese troops on the India-Bhutan-China trijunction, India Wednesday extended by five years the anti-dumping duty on import of chemical compound polytetraflouroethylene (PTFE) from China.
The compound is used as a non-stick coating for pans and other cookware. The revenue department has issued a notification imposing $2,637 per tonne as anti-dumping duty on imports of PTFE from China. The duty was first imposed for five years in August 2011 and was extended by one year last August.
The Chinese state media has been dishing out partisan information, far off reality against India. Of late, its tone and tenor has been tantamount to arm-twisting, in a way that is unbecoming of any media house that claims to possess a semblance of neutrality and fair play.
With the Chinese troops launching military misadventures against India one after the other, the government has done well by extending the anti-dumping duty on import of PTFE. This comes on top of the commerce ministry levying anti-dumping duty on 93 Chinese items.
The decision, on expected lines, has rattled the Chinese media. India imposes anti-dumping duty to safeguard its domestic industry from onslaught of cheap foreign goods. These products belong to a broad group of chemicals and petrochemicals, steel and other metal products, fibres and yarn, machinery, rubber or plastic products, electric and electronic items and consumer goods, among other things.
The India-China bilateral trade favours the communist country. Our imports from China in 2016-17 marginally dipped to $61.28 billion dollars compared with $61.7 billion the previous year. On the contrary, Indian exports fell by 12.3 per cent year-on-year to $11.75 billion.
Commerce ministry data show that the trade deficit with China last year mounted to more than $52 billion, resulting in bilateral trade deficit of $47 billion. India’s exports to China include iron ore, cotton yarn, petroleum products, copper and chemicals, while imports include telecom instruments, electronic components, computer hardware, industrial machinery and chemicals.
The trade balance is also qualitatively skewed. Chinese exports to India are dominated by value-added goods, machinery and parts. On the contrary, India’s exports to China are primarily raw materials such as ores, cotton and minerals. Therefore, if a freeze is declared in bilateral trade, India will be affected less compared with the impact on the Chinese markets.
China has routinely boycotted foreign goods when its interests have been affected. It has rather used such boycott as a weapon to settle political scores with other countries. However, it has not faced any ban of its goods in foreign countries. As South Korea deployed the THAAD missile defence system of the United States on its soil, China immediately imposed a ban on Korean imports.
China has historically had frosty ties with Japan. In 2012, Japanese firms such as Nissan and Honda faced the wrath as the two nations fought over Senkaku islands. Recently, China ordered boycott of a Japanese hotel chain after it placed in rooms a book denying the Nanjing massacre.
The US and Europe are taking measures to protect themselves against dumping by China. India has instead offered them a direct train to the Indian market. Aggressive pricing on the back of state subsidies, a protectionist outlook, and cheap finance have allowed Chinese companies to become the export house of the world.
More than 80 per cent of India’s solar component supplies have been hijacked by the Chinese. Flooding of Indian markets by cheap Chinese goods has wiped out our small and medium industries making toys, plastic buckets, and idols of Indian gods among other things.
The call to boycott Chinese goods has grown shriller across the country. But dominance of Chinese goods is a reality deep within India, in middle class homes and markets, in economy and in trade. Chinese companies today dominate the telecom sector in India. They control 51 per cent of India’s $8 billion plus smartphone market with brands such as Xiaomi, Oppo, Vivo and OnePlus. The same is the case with telecom equipment sector.
India has now decided to subject electronic goods imported from China to intense scrutiny to preclude their being a security threat. China has always protected its own turf by pushing companies such as Apple to set up data servers locally to cater to Chinese security concerns. The unusual geopolitical situation on the borders warrants unusual protection measures to ensure that India does not become a dumpyard for other countries.
