India raised basic customs duty on dozens of products imported from China, in order to curtail cheap imports from China. This process would be followed up with non-tariff measures, such as standard specifications for hundreds of items, in the medium term, as per the sources. However, this move is not China-specific, it will also apply to the imports of the specified items made from any other country.
The government made a list of 1,173 items. These items range from auto parts, compressors for AC and refrigerators to select steel and aluminum products and electrical machinery — to zero in on products/ sub-products on which the import duties can be hiked. Listed items are imported from China and can be swapped with local production, one of the sources said.
Imports of these listed 1,173 items from China cost for $11.98 billion in the financial year 2019, making up for just 2.3 per cent of India’s total imports in 2019 but alone 17 per cent of New Delhi’s imports from Beijing, China.
Customs Duty – The idea behind this step is not just to punish China for its latest border dispute with India but also to boost local production and replace imports, as Prime Minister Narendra Modi’s push for Aatmanirbhar Bharat. Meanwhile, this hike in the duty will hurt China the most as it is the biggest supplier of cheap products to India.
However, according to some analysts,Chinese imports such duty hikes that target mostly small products will hardly yield anything. Beijing can anytime raise the subsidies on these items, which can blunt the Indian tariff hike.
Replying to it an official source argued that “every great journey starts with a single step” and Beijing must know that “its action carries a cost”. Not taking any step will only encourage China.