India recorded a trade deficit of $99.2 billion with China in the 2024/25 fiscal year that ended in March. It was driven by a surge in imports of electronics and consumer durables. India’s exports to China are now lower than in 2013/14, despite a significantly stronger rupee back then.
However, India’s Atmanirbhar Bharat dream has no space for Chinese dependency, and definitely not Chinese dumping.
Take the example of Penicillin G sold by Indian industry at $22 per billion units in the early 2000s. China entered the market offering the same at 6$ per billion units, leading to the shutdown of domestic producers such as SPIC in Chennai.
To counter such large-scale dumping by China, India imposed anti-dumping duties (ADD) with the goal of helping Indian industry. A report by the Centre for Digital Economy Policy Research (C-DEP) has highlighted the impact of these trade remedies on India’s domestic industry.
These changes have driven an investment of over ₹1 lakh crore and created 6.7 lakh direct and indirect jobs in the manufacture of tyres, alloy wheels, caustic soda, ceramic tiles, compact fluorescent lamps and methylene chloride, to name a few.
In most of these industries, the highest imports were noted to be from China, and hence, the highest ADD was imposed on Chinese products. The report states that India has reduced its dependency on China and other nations in these sectors from 95% to below 5%.
Along with local manufacturing, India has managed to scale up its ceramic tile exports by 31% in the first half of 2023, reaching 272 million sqm, an impressive achievement that narrowed the gap with China, the world’s largest tile exporter.
In alloy wheels, the number of producers increased from four in 2013 to nine in 2021, after the implementation of ADD. It also led to a surge in domestic capacity from 3.8 million wheels to 16.5 million wheels, dropping imports from 95% to just 10%.
These growth metrics have safeguarded domestic manufacturers from predatory pricing by Chinese competitors. Incentivising capital investments in advanced machinery, leading to higher production efficiencies, has promoted MSME participation and allowed smaller players to scale and compete globally.
This growth story demonstrates how trade remedies, combined with innovation and entrepreneurship, can transform India’s economy and also silently counter China’s growing economic aggression on a global stage.
