India needs to check the growing trade imbalance with China, experts have said. India must take measures to prevent the flooding of Chinese goods in the country, and one of the key tools under the ambit of World Trade Organisation (WTO) rules is using Anti Dumping Duty (ADD), they said.

According to the Confederation of Indian Industry (CII), which works to create and sustain an environment conducive to the growth of industry in India, the country’s trade imbalance with China stood at $51.86 billion, with a bilateral trade of $71.22 billion (Rs 4.76 lakh crore) in 2015-16. During this period, India’s exports to China came in at $9.68 billion while imports stood at $61.54 billion. “The growing trade imbalance with China is a kind of threat to India and this has to be checked. Growing imports of even goods available locally in India have posed a serious threat to small-scale industries and the government should act to harmonise the trade imbalance with China,” a senior CII office bearer said.

Criticising the growing demand for blanket ban on trade with China, the CII official said that the CII is against of any ban on trading. “By promoting Make in India, pushing medium and small scale industries, creating ease of doing business and taking other such steps, the country can reduce the growing trade imbalance with China,” the CII official said.

On the growing demand for banning trade with China, Raman Prasad, professor at the Institute of Chinese Studies (ICS) in Delhi, said “Securing the national interest is paramount for any sovereign country in the world and India is no exception to that. India can take a number of measures to prevent the flooding of Chinese goods in the country. One of the most important tools provided under the ambit of WTO rules is using Anti-Dumping Duty (ADD). The ADD will prevent the dumping intention of Chinese traders.”

Mohinder Singh, another professor at the ICS, said: “Blanket ban on Chinese trade will hurt the general environment and violate terms of international trade, but the country can use ADD and a goods-wise policy to prevent the dumping of Chinese goods. Other measures include bilateral talks with the Chinese authorities to increase Indian exports to China.” According to Professor Singh, the increasing trade deficit with China can primarily be attributed to the fact that Chinese exports to India rely mostly on manufactured items meeting the demand for fast-expanding sectors like telecom and power, while India’s exports to China are characterised by primary products, raw material and intermediate products.

“India is exploring all measures, including ADD, to bring down the trade imbalance with China, but the need is to evaluate trading at the micro level with China,” Singh told The Sunday Guardian. “So far, there have been 322 anti-dumping cases, of which 177 cases involve China. In order to boost exports and maintain the balance of trade with China, India has impressed upon the Chinese authorities to recognise the need for reduction in trade imbalance for long-term business prospects,” Singh added.


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