Amid the escalation of trade tensions between the United States and China, India has become at the heart of the indirect repercussions of this economic war. A report published by the British Broadcasting Corporation BBC revealed the growing anxiety in Indian industrial and commercial circles from an increasing Chinese commercial dumping that threatens a number of vital sectors in the country.
The spinning sector is the first affected
In the southern state of Tamil Nadu, the 64 -year -old spinning factory, the yarn factory, is suffering from a sharp slowdown in production, after requests fell by nearly 40% in just one month.
The reason is due to the flow of Chinese Facebook threads to the Indian ports at 15 rupees per kilogram (equivalent to $ 0.18), which led to a decrease in demand for the local product.
“We cannot compete with these prices. Our raw materials are the highest cost, and if this situation continues, then we remain in the market is threatened,” said Theronavakarsu.
The videos threads are an essential component in the manufacture of woven fabrics. As China represents the largest producer of this material globally, India mainly depends on local production with the import of limited quantities to cover the gaps.
According to Jadish Chandra, from the Jazzl Association in southern India, nearly 50 small factories in the areas of Palibalim, Caror, and Turbur are working with less than its productive capacity, and some are seriously considering reducing operations or total stopping, if the government does not move quickly to control the market.
Chinese reassurance
In the face of these accusations, the Chinese Ambassador to India, Shu Feheong, wrote an article in the newspaper “Indian Express” in which he said that his country does not practice dumping and does not seek to sabotage the economies of other countries, but rather wants to import more high -quality Indian products.
He said in his article: “We will not be involved in a destroyed competition or in dumping the market, and we will not hinder the growth of industries or economies in other countries.”
But Indian concerns are not limited to the textile sector, as anxiety extends to iron and steel, chemicals, rare minerals, and electronics, as China is the largest global source for most of these products.
American drawings
US President Donald Trump imposed customs duties of 145% on Chinese goods, prompting Chinese companies to search for alternative markets such as India to drain their surpluses.
Despite exceptions to some sectors (such as medicines, smartphones and semiconductor flakes), a large part of Chinese exports is looking for a new outlet in neighboring countries.
A Japanese Mediation House report indicates that China has already drowned global markets with cheap commodities before Trump’s arrival to power early this year, which means that the phenomenon is not new, but it has worsened recently.
International complaints
The year 2024 witnessed a record rise in the number of investigations against Chinese imports, as the World Trade Organization recorded about 200 complaints against Beijing, including 37 complaints filed by India alone.
This comes at a time when India’s imports from China increased by 25% last March, mainly driven by electronics, batteries and solar cells.
In an attempt to limit this flow, the Indian Ministry of Trade imposed 12% preventive fees on some steel imports, and investigations began to include multiple sectors, including industrial spinning, and established a special committee to follow up the movement of cheap Chinese imports.
The trade deficit between India and China amounted to 100 billion dollars, which reflects a growing gap in the commercial scale (Stradstock)
India is stuck in structural dependency
Despite the efforts of the government led by Prime Minister Narendra Modi to strengthen the local industry as part of the “Made in India” campaign, experts confirm that India is still highly dependent on Chinese imports, especially in intermediate commodities.
“We are not successful in deepening the industrial base. We encourage manufacturing, but we nourish imports at the same time.”
He added that New Delhi should take advantage of the improvement of diplomatic relations with Beijing to open a serious dialogue on Chinese commercial practices, similar to what Western countries such as the European Union, which recently demanded strict guarantees from China not to dump its markets.
The data of the Global Research Initiative for Trade (GTRI) indicates that Indian exports to China have declined below the levels of 2014, despite the weakness of the rupee, while the trade deficit reached 100 billion dollars, which was described by expert Ajay Srivastava as a “dangerous structural warning”.
“This is not just a commercial gap. This is a structural defect in the manufacturing system. The deficit cannot be blocked without the competitiveness gap,” Srivastava said in a post on communication platforms.
Akash Brakish, of the “Amana Capital” company, believes that the fear of Chinese dumping discourages Indian investors to expand the industry, which was confirmed by a study issued by the ICRA credit agency.
The report concludes by noting that China is trying to modify its image globally in light of the increasing international scrutiny, and is clearly seeking to expand its trade relations away from Washington, while India finds itself in a difficult equation: protecting its local industry from dumping, without disrupting its relationship with the largest source in Asia.
