New Delhi [India], April 16 : As trade tensions between the US and China escalate, the risk of China dumping electronics products in India has increased. Chinese companies are now looking to expand their presence in India by offering discounts to Indian buyers to make up for lost sales in the US.
A recent report by Crisil Ratings acknowledges the risk of China potentially dumping electronics products in India. This means selling goods at prices lower than their cost of production or below the market price in other countries.
"The top Chinese exports to the US, including electronics, machinery and textiles, are particularly vulnerable to dumping and their influx into the Indian market could impact domestic industries," said the report by Crisil Ratings
Commerce Secretary Sunil Barthwal too acknowledged the risk of dumping on Tuesday and said, "Rising U.S. costs may prompt exporters from countries like China, Vietnam, and Indonesia, all facing U.S. trade deficitsto divert goods to India, potentially triggering an import surge and Products at risk of being dumped in India".
But the government is prepared for it and has already established a committee for the purpose, he said, adding that It will be headed by commerce secretary and comprise officials from the Ministry of Commerce, Director General of Foreign Trade (DGFT), Central Board of Indirect Taxes and Customs (CBIC), and Department for Promotion of Industry and Internal Trade (DPIIT).
The committee will closely monitor any influx of agricultural products from the US and merchandise from China, it will also keep an eye if these goods are routed through third countries such as Vietnam, Indonesia and Nepal.
The idea behind dumping by China by giving discounts is to increase demand in India, where the market for electronics and consumer goods is growing rapidly, despite global economic challenges. The potential for aggressive dumping from China will erode the pricing power of domestic manufacturers in India, potentially leading to lower profitability for these companies.
The report says, Chinese exporters may diversify their export destinations, including India, as a way to avoid US tariffs, which could lead to a surge in imports.
This surge in imports may widen the trade deficit, which will have broader implications for the Indian economy. The report says that dumping could be significant in sectors like electronics, machinery, and textiles.
The report adds "However, the Indian government may impose anti-dumping duties to safeguard Indian exporters and mitigate any potential damage"
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