Tariffs, trade barriers: How India plans to protect domestic biz from China

Bilateral trade between China and India was worth $88 billion in the fiscal year ending March 2019, with a trade deficit of $53.5 billion in China’s favour, the widest India has with any country

India plans to impose higher trade barriers and raise import duties on around 300 products from China and elsewhere, two government officials said, as part of an effort to protect domestic businesses. The plan has been under review since at least April, according to a government document seen by Reuters, and is in line with Prime Minister Narendra Modi’s recently announced self-reliance campaign to promote local products. The new duty structures are likely to be gradually outlined over the next three months, said the sources, who asked not to be named as the plan is still being finalised. India’s finance ministry and trade ministry, which is involved in the discussions, did not respond to requests for comment.

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The government is considering raising import duties on 160-200 products and imposing non-tariff barriers – such as licensing requirements or stricter quality checks – on another 100, according to the officials. The decision will target imports worth $8-10 billion with the aim of deterring non-essential lower quality imports which render Indian products uncompetitive, said the first official, who has direct knowledge of the plans.

“We are not targeting any country, but this is one of the ways to reduce a trade deficit that is lopsided with countries like China,” the second official said. Bilateral trade between China and India was worth $88 billion in the fiscal year ending March 2019, with a trade deficit of $53.5 billion in China’s favour, the widest India has with any country.