India fights Chinese “dumping” when Trump’s tension increases

The pace at the 64-year spinning plant Thirunavkarsu in Tamil Nadu South India has slowed down.

Viscous yarn – a popular material that fits into the woven clothing – it produces, now sitting in the repository, because orders at local factories decreased by almost 40%last month.

All because Chinese import of material became cheaper on Rs 15 ($ 0.18; 0.13 pounds) per kilogram and flooded by Indian ports.

When Donald Trump imported tariffs up to 145% of Chinese goods in the US, manufacturers in China started looking for alternative markets.

India’s textile creators say they carry the main severity of trade tensions as Chinese manufacturers drop yarn in key production centers.

While China is the leading producer Viscose Yarn, India does the most From the viscose yarn, which the country needs at the local level, only with the import does the gaps in supplies.

Mill owners such as Thirunavkarsu are afraid that their yarn will not survive the pressure of such competition.

“We can’t compare these rates. Our raw material is not cheap,” he says.

Jagadesh Chandran, from the South India spinner association, told the BBC nearly 50 small piercing mills in the textile nodes of polypals, Carur and Tirupur in southern India “slowing down production”. Many say they will be forced to scale if the problem is not solved.

China’s Ambassador to India SU Fijun has sent assurances to India that his country would not drop products and actually wants to buy better Indian products for Chinese consumers.

“We will not participate in a market dumping or a cut competition, and we will not violate the branches of other countries and economic development,” he wrote in the opinion for the Indian express newspaper.

But the anxiety about dumping is spread in the sectors of India, since in China, the largest economy in Asia, is the largest exporter of virtually all industrial goods: from textiles and metals, to chemicals and rare minerals.

While pharmaceuticals – and later phones, laptops and semiconductor chips – were released from steep tariffs, large pieces of Chinese exports still fall into 145% Trump’s tariff wall. It is these goods that are expected to pursue other markets such as India.

According to the Japanese broker, whose studies have previously shown that China flooded the world markets with cheap goods before Donald Trump entered the Japanese Nomura brokerage house.

In 2024, investigations against unjust Chinese imports increased to record high levels. The World Trade Organization (WTO) data shows that almost 200 complaints about China – including 37 from India were filed with the forum.

In particular, India, with great dependence on Chinese raw materials and intermediate goods, can be hit hard. Its trade deficit with China is the difference between what it imports and exports – has already increased to $ 100 billion ($ 75 billion). And imports jumped by 25%in March, caused by electronics, batteries and solar elements.

In response, the Ministry of Commerce in India was set up by the Committee for Tracking the Education of Cheap Chinese goods, with the help of its quasi plant with a probe in imports in various sectors, including viscose yarn.

Recently, India also has imposed a 12% tax on some steel imports, locally known as protection protection to help stop the increase in cheap supplies mainly from China, which pushed some Indian mills to scale.

Despite such protection . And the high -profile marketing campaign of the Prime Minister Narendra Modi to enhance production at the local level – India was difficult to reduce its dependence on China, and imports increased, even when Border tensions between two neighbors reached the maximum after 2020.

All because the government had only a “limited success” with its plans to turn India into a world factory through things such as subsidies -related production, says Biswaj Dhar, a trading expert. And India continues to depend heavily on China for intermediate goods that are part of the production finished products.

While Western multinational Companies like Apple are increasingly looking for India To diversify its assembly lines from China, India is still dependent on the Chinese components to make these phones. As a result, imports in sectors such as Electronics increased significantly, pushing the trade deficit.

An increase in India’s deficiency is an “disturbing story”, – says Aji Srivstost, founder of Global Thrame Research Initiative (GTRI), especially since its export to China has fallen to the level below 2014, despite the weak currency, which ideally should help exporters.

“It is not just an imbalance of trade. It is a structural warning. Our industry growth, including through PLI (production associated), causes imports, rather than forming internal depth,” Srivstost wrote in a social media report. In other words, subsidies do not help India more export.

“We cannot overcome this deficit without overcoming the gap in competitiveness.”

To do this, India must quickly come together, given the possibilities of trading tensions with China. But also because countries with great imports from China are usually observed by a sharp slowdown in production, Nomura reports.

Akash Prakash with Amansa Capital agrees. The main reason that Indian private companies had not been invested enough was that they were afraid that it was “littered with China,” he wrote in the column in the Business Standard newspaper. A recent ICRA rating study also confirms this opinion.

With fears, when Chinese dumping is becoming more common and similar to the European Union seeking solid guarantees in Beijing that its markets will not be flooded, pressure on China – which is currently seeking new trading partners outside the United States.

China wants to completely change the story, says Mr. Dhar, “he is trying to come clean among heavily control.”

Despite the assurances in Beijing, Delhi should use Thawing relationships With his major neighbor to start the right dialogue on her firmly dumping position, says Mr. Dhar.

“This is a problem that India should flag, like most Western countries.”

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