India’s anti-dumping measure: Tariff on Chinese optical fiber

The government is considering imposing remedial duty on the import of “single mode optical fibre” after an investigation by the Directorate General of Trade Remedies (DGTR) confirmed its dumping mainly from China.

India has found large-scale dumping of optical fiber from China, days after Beijing extended a protective tariff on the import of Indian-made fibre for five years, which could trigger an identical tariff measure by New Delhi against the Chinese product within the local market, two official’s conscious of development said.[1]

The government is considering imposing remedial duty on the import of “single mode optical fibre” after an investigation by the Directorate General of Trade Remedies (DGTR) confirmed its dumping mainly from China, the officials said, requesting anonymity. The DGTR may be a single-window agency tasked with providing a level-playing field to domestic industry against unfair trade practices by countries like China.

After an in-depth investigation, DGTR on Friday concluded that import of single mode optical fiber at below cost is threatening to cause “serious injury” to Indian manufacturers and recommended imposition of a tenth safeguard duty on its import from all countries except developing nations, barring China, the officials said. the govt had already raised basic customs (BCD) thereon by 5% in July 2019.

The finance ministry is predicted to require a final judgment on the matter soon, they said. Single mode optical fiber is employed in manufacturing optical fiber cables utilized in telecommunication operations like community access televisions (CATV).

“Effectively, the measure is against Chinese firms as combined import from all other developing countries is a smaller amount than 9%. China alone features a share of over 84% in its import,” one among the officials said.[2]

The DGTR’s recommendation came close on the heels of Chinese commerce ministry’s punitive tariff on an equivalent product imported from India for five years, effective from August 14.

According to officials, China is resorting to tariff barriers because its companies are affected by overcapacity, and also diverting its exports to the Indian market within the face of a worldwide boycott of the Chinese products. “Based on complaints by the domestic optic fibre industry, DGT

R had initiated the investigation on Chinese dumping on September 23 last year. It had issued a primary finding on November 6 last year, but its recommendations couldn’t be implemented at that point,” the primary official said.

The second official said India was very cautious about Chinese unfair trade practices, especially after June 15. Sino-Indian tensions have shot up after a violent brawl between Chinese and Indian soldiers on June 15 along the road of Actual Control within the Galwan Valley in eastern Ladakh during which 20 Indian army personnel and an unspecified number of Chinese were killed.

“Given the domestic economic scenario, the finance ministry is predicted to simply accept this,” Divakar Vijayasarathy, founder and managing partner at consulting company DVS Advisors LLP, said. The move can’t be linked to China alone because the government has been indicating its intentions of protecting domestic industry.

“In the budget, customs were increased for quite 10 products. Since China may be a major supplier for India with an enormous trade surplus, any action on imports across the board would impact China. Atmanirbhar Bharat {Self-Reliant India} itself is to limit the influence of China on Indian markets and with relationships soaring, indirect economic sanctions will help both in hurting China and giving a lift to the fortunes of the domestic industry,” he said.

Dumping is an unfair trade practice that entails the export of a product at a price less than its value and is countered by punitive actions, which are a suitable measure under multilateral trade agreements, the officials said. Remedial actions include imposition of protective tariff (against underpriced imports), safeguard measures (imposition of a requirement, a quota, or both against an unexpected import surge) and duty (against export subsidies) to guard domestic units.

India has taken a troublesome position against unfair Chinese trade practices because it is committed to protecting domestic industry under the government’s Make in India campaign, the officials said.

India-China bilateral trade is heavily tilted in favour of China. consistent with trade figures released by the overall Administration of Customs of China (GACC) in mid-January 2020, India’s deficit with China was $56.77 billion in 2019; bilateral trade amounted to about $92.68 billion last year, a 1.6% annual increase.



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