India Illustration: Chen Xia/Global Times

India's latest anti-dumping investigations raise a question for Indian manufacturing: can restricting imports really make it more competitive? The answer may well be no.

Indian news agency ANI reported that India's Directorate General of Trade Remedies (DGTR) has launched five fresh anti-dumping investigations into imports from China, following complaints from Indian manufacturers. Some of the investigations cover imports from the EU, Japan and other economies too.

One reason these investigations deserve attention is the type of products involved. According to ANI, the probes cover persulphates, clavulanic acid and its amine salt, certain counterbalance forklifts, internally grooved copper tubes and pipes, and caprolactam. 

The materials are not simply finished goods competing for space on Indian retail shelves. Many are industrial inputs that Indian enterprises rely on to make other goods. Put simply, they are among the building blocks that keep Indian factories running.

The investigations come as India looks to upgrade its manufacturing sector to drive the next phase of growth. India wants to build up its manufacturing base, and it is much like building a taller structure: it needs more building blocks, including investment and competitively priced imported inputs. What matters is not simply where each block comes from, but whether Indian businesses can get the right inputs at the right cost and put them together efficiently. A competitive manufacturing sector is not built by making every block at home, but by putting the right blocks together at the right cost.

According to ANI, if the DGTR recommends the imposition of anti-dumping or countervailing duties, the Finance Ministry will take the final decision.

This raises a serious concern for Indian manufacturing. An anti-dumping investigation does not necessarily mean that the building blocks of Indian manufacturing will become more expensive. But it does add uncertainty for Indian enterprises and businesses that rely on imports. For a manufacturing sector seeking to expand, that uncertainty is not helpful.

The logic is simple: higher costs for manufacturers' inputs could eventually mean higher costs for products made in India, making them less competitive in the international market. That would run against the goal of building a more competitive manufacturing sector there.

This issue also needs to be viewed in the context of how manufacturing is evolving globally. As technology advances, production is becoming more complex and the division of work across economies more specialized. 

It is increasingly difficult for any economy to develop every part of a value chain on its own. A more practical approach is to build on areas of comparative strength while using imports where they can support domestic manufacturing. Imports, in this sense, are not a substitute for domestic production; they can also help make it more competitive.

Imports and manufacturing development can support each other, and China itself offers an example. China has a complete modern industrial system of its own, covering all industrial categories in the UN industrial classification, yet it still imports large amounts of goods. In 2023, intermediate goods accounted for 79.4 percent of China's total imports, supporting domestic production and meeting the needs of its manufacturing sector.

One positive sign is that the role of intermediate goods in supporting Indian manufacturing sector is increasingly recognized. India imports large amounts of raw materials, intermediate goods and capital equipment from China. Some voices in India have pointed out that these inputs are used to produce finished goods, feeding into the country's manufacturing and accelerating its exports.

As India seeks to expand manufacturing, openness and access to imports are becoming more important. Greater openness to imports from countries such as China does not weaken Indian manufacturing. It can instead help India integrate more deeply into global supply chains.


The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn