TRADE IMBALANCE IN FIGURES

16.6%

Chinese share in India’s imports grew from 11.6 per cent in 2013-14 to 16.6 per cent in 2017-18. This came as a result of Chinese imports growing at a whopping 20 per cent in 2017-18, compared to 9 per cent growth four years ago. India’s exports grew by 9.8 per cent in 2017-18.

$50 bn

In a decade to 2017-18, India’s exports to China rose by $2.5 billion. In the same period, China’s imports to India rose by $50 billion. India registered a trade deficit of $157 billion in 2017-18.

5%

Chinese government gives an effective rebate of 17 per cent to its export companies. This, the committee says, results in Chinese goods being 5-6 per cent cheaper than their Indian counterparts, making it lucrative for Indian importers.

9%

On account of costlier energy, finance and logistics, Indian goods are costlier by about 9 per cent in the global market. Chinese industry gets loans at 6 per cent, compared to 11-14 per cent in India. Logistics costs are 1 per cent of the business in China, compared to 3 per cent in India.

294

Of the 803 licences provided by the Bureau of Indian Standards (BIS) to foreign manufacturers selling in India under the Foreign Manufacturer Certification Scheme (FMCS), 294 licenses for 55 products have been granted to Chinese manufacturers.

A similar scheme has also provided 9,274 registrations for information technology and electronics products. Of this, 5,857, or 64 per cent, registrations have been granted to Chinese manufacturers.

8%

Despite the fact that 75-80 per cent of Chinese steel products are covered under anti-dumping duty, their imports have increased 8 per cent in 2017-18.

INDUSTRY SPECIFIC Pharmaceuticals 1200%

In the life-saving drugs category, the dependence on Chinese imports is as much as 90 per cent. As much as 75% of the Active Pharmaceutical Ingredients (APIs) used in the formulations of essential drugs in the National List of Essential Medicines (NLEM) are sourced from China.China increased the prices of bulk drugs 11-fold, or 1200 per cent, in last two years.

Recommendations Revive India’s fermentation based API capability.

Solar 90%

Chinese solar imports form 90% of India’s market share directly or indirectly through their offshore companies across South East Asia. Further, its dumping prices in India are lower than that of the price at which they sell in Japan, Europe or the US.

Under the Special Incentive Package Scheme, no domestic manufacturer has got any capital subsidy till now.

Recommendations

Domestic industry must pursue innovation thatwill help in furtherreduction in price perunit. Anti-dumping dutymaybe levied in a differential mannerto facilitate level pegging for the domestic industry.

Textiles 35%

Chinese cheap imports have resulted in 35 per cent closure of power looms in Surat and Bhiwandi, the report notes.

It fires a salvo at the GST structure, stating that taxing synthetic fibres at 18 per cent, yarns at 12 per cent, and fabrics at 5 per cent has caused unintended benefit to China resulting in increased imports of fabric from there.

Recommendations

Need to lookatthe LDC arrangements wherein imports from LDCs are fullyexempt. Increase the customs dutyon garmentimports. Modernise the powerloom and handloom sector formass production with quality

Toys 85%

About 85-90 per cent of the toy market is commanded by Chinese products, the report says. It has affected 50 per cent of the domestic toy industry.

Low-priced Chinese toys are either mass-produced or are rejects from other countries and are diverted to the Indian sub-continent or Africa. Further, Chinese toys are highly toxic, it says.

Recommendations

Issue qualitycontrol order(QCO) for toys and ensure toxic and cheap qualityChinese toys do not enterthe country. Importoffinished toyproducts from China mustbe banned.

Bicycles 58%

Bicycle imports from China saw a rise of 58 per cent in volume and 47 per cent in value in April to October 2017 over the previous year.

Further, under-invoiced bicycles constitute 85% per cent of the total bicycle imports from China in 2017-18.

Apart from affecting bicycle manufacturers, it is gradually killing the unorganised industry of small bicycle parts manufacturers who provide employment to many skilled and unskilled workers.

Recommendation

Carry out detailed analysis of the customs data in order to unravel the modus operandi of the unscrupulous importers involved and curb the entry of under-valued Chinese bicycles into the country.