India plans to impose higher trade barriers and raise import duties on about 300 products from China and elsewhere, two government officials said, as part of an effort to protect domestic businesses. According to a government document seen by Reuters, the plan has been under review since at least April, and is in line with the recently announced self-reliance campaign by Prime Minister Narendra Modi to promote local products. Sources said the new duty structure is likely to be outlined gradually over the next three months.
The Ministry of Finance and the Ministry of Trade, which are involved in the discussions, did not respond to requests for comment. According to officials, the government is considering increasing import duties on 180-200 products and imposing non-tariff barriers – such as licensing requirements or strict quality checks – at 100.
The decision will target $ 8-10 billion in imports aimed at curbing non-essential low-quality imports, rendering Indian products uncompetitive, said the first official, who has direct knowledge of the plans.
Another official said, “We are not targeting any country, but trade with countries like China is one of the ways to reduce the deficit.”
Bilateral trade between China and India stood at $ 88 billion in the financial year ending in March 2019, with a trade deficit of $ 53.5 billion in favor of China with either country.
Between April 2019 and February 2020, the latest data available, India’s trade deficit with China was $ 46.8 billion.
A separate industry source familiar with the matter said that engineering goods, electronics and some medical devices were among the items considered under the scheme. A third government source stated that non-tariff barriers, such as more stringent quality control certification, may apply to imported products such as air conditioners.
PM Modi has vowed to promote and protect local manufacturing since coming to power in 2014. He has promoted the “Make in India” program in recent years, and last month announced a “Atmanambha Bharat”, or a self-sufficient India, campaign.
India already raised taxes on imports of items such as electronic goods, toys and furniture in February, criticizing it was a protectionist move against foreign businesses. For example, Sweden’s IKEA stated that at the time it was disappointed by the high tariffs.
The government document showed that feedback from various Indian ministries was sought to reach the list of about 300 products, which Reuters has not seen.
The document states that India has increased duties since 2014 on more than 3,600 tariff lines covering products from sectors such as textiles and electronics.
A fourth government official said, “We are emphasizing on the policy of strengthening Indian manufacturing keeping in mind our strengths and weaknesses.” ”