India fears Chinese goods invasion

Recently, an Indian manufacturer of Penicillin-G - Alembic Ltd, demanded an investigation into alleged dumping of Penicillin-G from China. According to the Hindu, the Vadodra based chemical company sought to argue that China being a non-market economy the normal value of the product is to be determined on the basis of prices in India after deducting the customs duty applicable for the period of investigation (PoI). The applicant stated that there is sufficient evidence that the normal value of the subject goods in China is significantly higher than its net export price, essentially indicating that “the subject goods are being dumped by the exporters” from China.

Alleviating woes the New York Times reported “As dozens of countries slip deeper into financial distress, a new threat may be gathering force within the American economy - the prospect that goods will pile up waiting for buyers and prices will fall, suffocating fresh investment and worsening joblessness for months or even years”.

There is a genuine concern about China flooding the Indian markets with goods it cannot sell in the West. The government may need to step in to check this,” an official told the Economic Times. The Commerce ministry is already looking into sectors of the industry that will be most affected by dumped Chinese goods, and intends to impose non-tariff import restrictions on such sectors. “There are a number of non-tariff measures, other than anti-dumping, that could be used to check imports. We will examine them and choose the appropriate ones,” the official added.

Another measure that could be imposed to deter dumping cheap Chinese goods in India could include the imposition of higher quality and safety standards for products. “If India increases its quality norms, it is bound to temporarily restrict imports,” an industry source told the Economic Times.

According to research from 2point6billion, sectors that are expected to be most affected include textiles, chemicals, steel products and light engineering goods.