The Indian government is planning to increase customs duty on a host of imports from China including capital goods in view of rising tensions at the Sino-India border in which several soldiers of both sides have been killed during the past week, SteelOrbis has learned from sources.
About 14 percent of all Indian imports are from China and in the April 2019-February 2020 period India’s imports from China were estimated at $62 billion, while exports to China in that period totaled $15.5 billion.
Apart from increasing tariff barriers, the Indian government is also expected to raise quality standard requirements to check imports from China, government sources said.
Officially, the Indian government insists that the move to check imports from China is aimed at boosting the official “Make in India” policy, but the move comes close on the heels of clashes between the armed forces of the two countries along the Himalayan border of the two neighbors.
Most industry officials in the private sector are reluctant to comment on record in view of the highly sensitive situation between the two countries and the ongoing military engagements between the two nuclear-powered nations. However, unofficially, several industry leaders including from private steel companies acknowledged that higher duties on imports of capital goods from China would hit Indian companies including steel mills in sourcing plant and machinery including replacement capital goods at competitive prices.
In the March 2019-February 2020 period, capital goods imported from China were valued at $12.78 billion.
According to an official at a private steel mill, domestic steel producers can source their requirements of capital goods from Europe, but this would entail higher costs and these would have to be passed on to consumers of finished products. However, in the short term, steel mills would still risk facing a shortage of refractory materials, as it would be a challenge to find alternative sources for refractory materials at competitive prices, the official said.
India’s Ministry of Commerce has also decided to fast-track its response to complaints of dumping of imports from China from 30 days at present to about 10 days, government sources said.