India follows US example of trade protectionism against China

By Zhang Hongpei Source:Global Times Published: 2018/7/31 21:28:40

Deficit increases due to lack of competitiveness: experts

Customers from India choose products at a wholesale market in Yiwu, East China's Zhejiang Province. File photo: VCG

China and India should work together to strengthen trade relations and industrial cooperation amid the rising threat of protectionism as there is still plenty of room for negotiation, and it is unwise for India to close its door to Chinese products, said industry analysts.

Their comments came after Indian media reports said that the Indian Parliamentary Standing Committee on Commerce "has made a strong case for taking aggressive and pro-active steps, following the example set by the US and the EU" in tackling the bulk import of Chinese items.

"At a time when there is an urgent need to stimulate our manufacturing sector to at least 25 percent of the country's GDP, Chinese imports have thrown a spanner in the wheel of India's economic progress per se and industrial manufacturing in particular," the Indian committee said in a Thursday report, according to New Delhi Television.

As India is trying to bolster its own manufacturing sector, it wants to rely less on goods from China, especially light industrial products like textiles, toys and household items such as lamps, which are labor-intensive and can generate many jobs.

A representative of Shifeng Decorative Lighting Co based in Yiwu in East China's Zhejiang Province, who only gave his surname as Ying, told the Global Times Tuesday that orders from India had declined 50 percent year-on-year since the start of this year.

"Orders for this November's Diwali Festival, a traditional Indian festival, also declined by half compared with last year," according to the company representative.

"Now all imported light-emitting diode lamps have to be approved by the Bureau of Indian Standards, effective since the start of this year. The certification and test norms are actually targeted at Chinese lamp manufacturers to discourage imports and promote local manufacturing," Ying explained.

Protectionist sentiment in India reflects the country's concern over the possibility that China may increase exports to it amid China-US trade friction, said Zhao Gancheng, director of the Shanghai Institute for International Studies' Center for Asia-Pacific Studies.

"But China definitely will not treat India as an alternative export destination since India can't accept the same import volume," Zhao told the Global Times Tuesday.

"India has 'racked its brains' in recent years to develop obstacles for the entry of Chinese goods to protect its own manufacturing industry," Zhao noted, adding that the ongoing international situation had stimulated such sentiment.

India's widening trade deficit with China has intensified such concerns.

According to India's trade figures, the deficit reached $52 billion in 2017, up 8.55 percent year-on-year, according to a report from Times of India in March.

"The deficit is mainly due to the lack of a competitiveness of Indian products in comparison with China's goods, instead of China's 'lack of market openness' as the Indian side complains," Zhao said.

"Both developing countries and BRICS members, China and India have common grounds and interests for future development," he stressed.

China has agreed to purchase rice from 14 of the 19 registered Indian rice exporters, while the other five have been asked to improve their storage and isolation facilities so they can apply again, Indian news website Business Standard reported on July 24.

Zhao conceded the advantage of Indian manufacturing in terms of cheap labor and the number of products, despite weak technology and backward infrastructure.

Neverthelss, he noted that: "Within the foreseeable future, Indian manufacturing cannot overtake that of China."

A logistics industry insider surnamed Liu, who has done Indian business for years, told the Global Times on Tuesday that most of the products sent from China to India are consumer goods, which won't boost the local economy.

"There is still plenty of room for negotiation on investment as well as cooperation along the industrial chain.For example, bringing some Chinese industrial bases to India to create job opportunities, along with advanced equipment and technology," according to Liu.

Newspaper headline: India follows US example of trade protectionism


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