India's existing "institutional mechanisms" are sufficient to tackle any potential dumping of goods from China following United States' (US) decision to increase tariffs on key imports, including semiconductors, a senior Indian government official said.
"India has institutional mechanisms in place to keep a check on that. But we would not like to speculate on it before it happens," the official said.
China remained India's top import-source nation in FY24, accounting for 15.1 percent of total inbound shipments during the previous fiscal followed by Russia that was a distant second, as per provisional data from commerce ministry.
Private think-tank Global Trade Research Initiative (GTRI) in a brief on May 14 warned that India may become a dumping ground for Chinese products such as Electric Vehicles (EVs) and batteries, with intensifying attempts by the US to lower reliance on Beijing by raising tariffs on these goods.
The think-tank also highlighted the need for India to come up with a China strategy given stagnant exports and rising imports from Beijing. This comes at a time the US and the European Union (EU) have been taking steps to lower reliance on Chinese goods.
The official cited above said that the US wants to lower dependence on China particularly on battery making. "Everyone has seen post-Covid that it is not a good idea to keep all your eggs in the same basket. And all nations including US wants to build their own capacity to facilitate energy transition."
India, just like any other country, will not depend on one nation alone for imports, especially when mobility is concerned, the official added.
The US on May 14 levied steep tariff hikes on various goods, including EV batteries, computer chips and medical products escalating the trade war between America and Beijing.
While the US will quadruple EV duties to over 100 percent in 2024, it will double tariffs on semiconductors to 50 percent by 2025, the White House said. The US government cited "unacceptable risks" to its domestic economic security posed by what it termed as unfair Chinese practices of flooding global markets with cheap goods.
"India's policy is sound on this issue and there is no need to worry. Our policy is that India builds sufficient capabilities for production of EVs and the entire EV ecosystems," the official said.
New Delhi has been doing its bit to attract investments in EVs. Back in March, the government unveiled a new policy for the sector slashing import taxes to 15 percent from 100 percent on some models if a manufacturer commits at least $500 million and sets up a factory too.
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