India's textile sector is feeling the strain of escalating trade tensions, with concerns over Chinese "dumping" of viscose yarn. This has led to a significant drop in orders, pushing local manufacturers to the brink, even as authorities grapple with the implications for the broader economy.
India Alarmed Over Chinese Trade Practices Amid Rising Tensions with the US
India Alarmed Over Chinese Trade Practices Amid Rising Tensions with the US
As trade disputes mount between the US and China, India faces challenges from increased Chinese imports disrupting local industries.
India’s textile industry is witnessing a dramatic slowdown, particularly for viscose yarn production in Tamil Nadu, where demand has plummeted by nearly 40% due to an influx of cheaper imports from China. The arrival of this cheaper yarn—reduced by 15 rupees ($0.18) per kilogram—coincides with US tariffs of up to 145% on Chinese goods, prompting manufacturers in China to seek alternative markets, such as India.
Thirunavkarsu, who runs a spinning mill in Tamil Nadu, expresses the dire situation many mill owners face; they cannot compete with the reduced prices of Chinese imports. Industry leaders are echoing concerns, noting that nearly 50 small mills are slowing production or risking further cuts if the trend continues.
Recent comments from China's Ambassador to India, Xu Feihong, sought to assure Indian stakeholders that China does not support market dumping and aims to increase imports of high-quality goods from India. However, the anxiety over Chinese dumping is pervasive across various sectors in India, as China remains the largest global exporter of industrial goods.
These challenges are compounded by recent reports showing that India's trade deficit with China has surged to $100 billion, fueled largely by electronics, batteries, and solar cells. The Indian government has responded by forming a committee to monitor cheap Chinese imports and has enacted a 12% safeguard duty on select steel imports to protect local industries.
Despite these efforts, experts warn that India's dependency on Chinese raw materials and intermediate goods is still firmly in place. Furthermore, the country’s trade strategy has struggled to effectively bolster local manufacturing, resulting in a persistent rise in imports even amid geopolitical tensions between India and China.
Industry experts emphasize the urgent need for India to address its competitiveness gap if it wishes to capitalize on shifts in global trade dynamics, particularly as the US-China tensions have opened new opportunities. Nonetheless, the overwhelming presence of inexpensive Chinese goods threatens to stifle the growth of emerging economies like India.
Calls for India to escalate its dialogue with China regarding dumping practices resonate throughout the industry, reflecting a widespread desire for a clearer trade framework to protect domestic markets amid uncertain global conditions.
Thirunavkarsu, who runs a spinning mill in Tamil Nadu, expresses the dire situation many mill owners face; they cannot compete with the reduced prices of Chinese imports. Industry leaders are echoing concerns, noting that nearly 50 small mills are slowing production or risking further cuts if the trend continues.
Recent comments from China's Ambassador to India, Xu Feihong, sought to assure Indian stakeholders that China does not support market dumping and aims to increase imports of high-quality goods from India. However, the anxiety over Chinese dumping is pervasive across various sectors in India, as China remains the largest global exporter of industrial goods.
These challenges are compounded by recent reports showing that India's trade deficit with China has surged to $100 billion, fueled largely by electronics, batteries, and solar cells. The Indian government has responded by forming a committee to monitor cheap Chinese imports and has enacted a 12% safeguard duty on select steel imports to protect local industries.
Despite these efforts, experts warn that India's dependency on Chinese raw materials and intermediate goods is still firmly in place. Furthermore, the country’s trade strategy has struggled to effectively bolster local manufacturing, resulting in a persistent rise in imports even amid geopolitical tensions between India and China.
Industry experts emphasize the urgent need for India to address its competitiveness gap if it wishes to capitalize on shifts in global trade dynamics, particularly as the US-China tensions have opened new opportunities. Nonetheless, the overwhelming presence of inexpensive Chinese goods threatens to stifle the growth of emerging economies like India.
Calls for India to escalate its dialogue with China regarding dumping practices resonate throughout the industry, reflecting a widespread desire for a clearer trade framework to protect domestic markets amid uncertain global conditions.
