The Hindu Editorial: Published on 20th April 2025:
Why in News?
The article highlights growing concerns within India over the potential fallout from the U.S.-China trade war, triggered by President Donald Trump’s high tariffs and China’s retaliatory measures. As global markets shift, India fears becoming a dumping ground for excess exports — particularly farm produce and manufactured goods — from countries affected by the trade conflict.
What is the Concern About Dumping?
Due to restricted access to the U.S. market, countries like China, Indonesia, and Bangladesh may reroute their surplus production to India.
This includes sectors like:
Garments and Textiles (e.g., Bangladesh),
Electronic Equipment (e.g., Indonesia),
Steel and Manufacturing (e.g., China).
Dumping involves selling goods below market value, harming domestic producers.
China, in particular, is facing criticism at the WTO for overcapacity and state subsidies.
Why is U.S. Farm Produce a Concern?
China was the third-largest buyer of U.S. agricultural products.
With declining exports due to tariffs, the U.S. might divert soybean and corn exports to India.
This raises concerns about domestic farmers’ vulnerability to cheaper foreign produce.
Which Indian Sectors Are Most at Risk?
According to experts, the most affected sectors include:
- Steel and Aluminium
- Textiles
- Electronics
- Chemicals
- Consumer goods
- Rubber and Plastics
- These industries could be hit by:
- Price drops due to dumping,
- Unfair competition,
Loss of market share, especially for MSMEs (Micro, Small, and Medium Enterprises).
What Are the Existing Safeguards Against Dumping?
Anti-Dumping Duties: Applied when a product is sold in India at unfairly low prices.
Safeguard Duties: Imposed to control sudden surges in imports that hurt domestic industries.
For instance:
A 12% safeguard duty has been imposed for 200 days on some steel products.
Titanium dioxide (used in cosmetics) from China was recently penalized with anti-dumping duties.
Why Was a 12% Safeguard Duty Imposed on Steel?
U.S. and EU protections since 2018 led to steel diversion to markets like India.
Countries like China, Japan, South Korea produce far more steel than they consume.
The DGTR found that this surge was hurting Indian steelmakers, hence recommended provisional safeguard duties.
Are Small Industries More Vulnerable?
Yes. MSMEs (especially in textiles) lack the resources to:
Monitor imports,
File cases,
Fight legal battles.
Unlike large corporates, they often depend on the government’s intervention for protection.
Can Indian Companies Compete by Improving Quality?
Experts say no, because:
The pricing gap caused by dumping is too high (margins over 50%).
Improving competitiveness by 10–15% cannot match products being dumped at throwaway prices.
Only legal safeguards like anti-dumping and countervailing duties are effective.
Conclusion:
- India is watching global trade trends closely.
- Sectors vulnerable to dumping must be protected by proactive trade policies, including:
- Monitoring import patterns,
- Initiating quick safeguard duty processes,
- Supporting MSMEs.
- While trade diversion is a real threat, India’s existing regulatory tools (DGTR, tariffs) are being mobilized to cushion the impact.
