Indian checks on Chinese imports would backfire: business insiders
Published: Sep 22, 2022 10:41 PM
China India Photo:CFP

China India Photo:CFP

India's reported moves against Chinese imports would backfire, Chinese business insiders said on Thursday, responding to India's reported resumption of physical inspections of Chinese imports over the alleged suspicion of dumping. The inspections would cover a wide range of finished Chinese products, Indian media reports said.

The Indian government may resume physical inspections of Chinese imports because it suspects large-scale dumping of finished Chinese products that are being presented as raw materials and intermediates, the Hindustan Times reported on Thursday, citing unnamed people familiar with the matter.

An Indian business leader told the Global Times on condition of anonymity on Thursday that the report is about physical and origin inspections of goods from China, "but there has been no official announcement yet."

While it is still unclear if and how this new move would take place, the report sparked attention among business people, who said the checks would hurt corresponding industries in India, given their high dependence on Chinese imports.

"India will not benefit from boycotting Chinese products and setting obstacles to normal economic and trade cooperation and exchanges with China, since China is highly integrated into Indian manufacturing and supply chains," Harris Liu from the Chinese Chamber of Commerce in India told the Global Times on Thursday.

According to the Confederation of Indian Industry (CII), one-third of machinery and almost two-fifths of organic chemicals that India imports come from China. Automotive parts and fertilizers are other items where more than 25 percent of India's imports are from China, the CII said. 

India also sources about 65-70 percent of active pharmaceutical ingredients and close to 90 percent of certain mobile phone parts from China, indicating the advantages of Chinese products in the country's market and supply chain.

"India's structural dependence on China ranges from heavy machinery, communications and consumer electronics to auto parts, and it is difficult to find alternative products that will not greatly increase the cost," Liu said.

Liu noted that if India strengthens the inspection of Chinese products as reported, especially supply chain products, it will be detrimental to Indian manufacturing.

Some foreign media reports have been exaggerating the competition between China and India, but bilateral trade has been going well.

In the 2021-22 fiscal year, bilateral trade volume between China and India increased by 44 percent year-on-year to $125.66 billion, with India's imports from China coming to $97.5 billion, while exports to China reaching $28.1 billion, a trend that industry insiders said mirrored the clear dependence of the Indian economy on Chinese products. 

The report about the checks has not come out of the blue. In mid-2020, India stopped such checks amid pressure from Indian companies and traders who complained of delays arising from the customs department inspecting every Chinese shipment, the Hindustan Times reported.

An Indian business person told the Global Times on Thursday that given the high supply chain connectivity between China and India, if the inspection of Chinese products were strengthened, it would not have a substantial impact on Chinese goods.

During the COVID-19 outbreak, India began to restrict imports from China and increased customs clearance procedures, but the actual effect was not "too bad," the person added.