The Indian Government Recently Plans To Implement Tariff Or Non-Tariff Trade Measures

Discuss applicable product list

In order to implement the "made in India" and "self-sufficiency" policies, the Indian government has recently discussed the implementation of tariff or non-tariff trade barriers on imported products, so as to reduce the import from foreign countries. The measures include raising tariff, implementing import licensing system, expanding border inspection and formulating compulsory product inspection regulations.

In order to discuss the product list, the Ministry of Commerce and industry of India, through the public association, has consulted about 1, 173 items (including petrochemicals, textiles, electronics, toys and other products that are highly dependent on China's imports), the list of products will be reduced to 200 to 300 items, and will continue to communicate and coordinate with relevant ministries and commissions such as the Ministry of finance, the Ministry of petroleum, the Ministry of textile, the Ministry of electronic information technology, the Ministry of telecommunications, the Ministry of steel and the Ministry of consumer affairs. After the draft is approved by the Indian cabinet, it will be announced and implemented.

Possible product range

The range of products that the Indian government intends to achieve include:

Prevent China's low-cost and low-quality products from entering the Indian market: the market share of many products imported from China (such as textiles, toys, chemicals, steel products, etc.) with an import value of less than 100 million US dollars has reached 90%; some products are classified as "non essential IM" On February 1, 109, India announced a tariff increase in its 2020-21 budget.

Promoting import substitution and manufacturing in India: products purchased from China with high import value, such as telecommunication equipment and personal computers, solar panels and equipment, semiconductors, electronic components, lithium batteries, compressors used in air conditioners and refrigerators, etc., accounted for 49.7% of India's total imports from China. In addition, the import value of products ranging from US $100 million to US $500 million, including organic chemistry, machine parts, electrical equipment, locomotive components, etc., China's average market share is more than 50%.

To sum up, it is expected that the Indian government may continue the trade policy of the 2020-21 budget and increase the tariff of the above consumer electronic products (mainly in the capacity of India to supply). It is estimated that the effect of tariff and non-tariff trade measures taken by the Indian government may be limited to trade substitution effect, and there is no trade creation effect. For example, solar panel and equipment manufacturers in China, affected by anti-dumping and countervailing measures in Europe and the United States, may prompt Chinese manufacturers to transfer to ASEAN countries for production and use the FTA signed by ASEAN and India for preferential export India.

Preliminary assessment of possible impact on Chinese manufacturers

China's export tariff on steel machinery and other products in India accounted for 32% of China's total export tariff, among which, India's export of non plastic machinery and machinery accounted for 32% of China's exports.

On the other hand, if the raw material supply from Japan and the East Korea is required to adjust the tariff on raw material supply from Japan or South Korea, such as the adjustment of raw material supply from India or other countries, it may cause the adjustment of raw material supply cost by the manufacturers in India.