Ziraat Times Team Report
Srinagar: As India is considering to impose higher trade barriers and raise import duties on around 300 products from China and elsewhere as part of an effort to protect domestic businesses, economic observers in J&K are asking this question: could it mean any benefit for J&K businesses?
According to Reuters, the plan to impose higher trade barriers has been under review since at least April, and is in line with Prime Minister Narendra Modi’s recently announced self-reliance campaign to promote local products.
The new duty structures are likely to be gradually outlined over the next three months, sources told Reuters. Engineering goods, electronics and some medical equipment were among items being considered under the plan. Non-tariff barriers, such as more stringent quality control certification, could apply to imported products such as air conditioners.
The government is considering raising import duties on 160-200 products and imposing non-tariff barriers – such as licensing requirements or stricter quality checks – on another 100, according to the officials.
Out of the larger target list, two particular imports are of immediate interest to Jammu & Kashmir: agro chemicals and apples.
Last month India announced that it was considering banning 27 pesticides in India, most of the chemical raw materials for which come from China. Agro industry stakeholders in the country have already expressed surprise and dismay over the proposal, suggesting the ban could imperil the agro chemicals industry and the country’s agriculture production itself.
Key players in J&K’s agriculture sector have been nervously watching the next steps on this proposal. On the contrary, conservationists and environmentalists have welcomed the move, observing that large-scale use of agro chemicals were wrecking havoc with J&K’s food chain and banning these agro chemicals was a ‘good move’.
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Highly placed sources told Ziraat Times that the initial plan of including some chemicals used in the multi-billion agro chemical industry in India might not be part of the final tariff hike and trade barriers. That would mean that the key agro chemicals required for sustaining Kashmir’s fruit industry might not vanish overnight.
Pertinently, China has been pushing for greater market access for Chinese apples in Indian markets, however, with India’s decision not to join RCEP trade coalition of the Asia-Pacific region, Kashmir apples are unlikely to face competition from Chinese apples in foreseeable future.
How big is India-China trade?
Bilateral trade between China and India was worth $88 billion in the fiscal year ending March 2019, with a trade deficit of $53.5 billion in China’s favour, the widest India has with any country.
Between April 2019 and February 2020, the latest data available, India’s trade deficit with China was $46.8 billion.
India already raised taxes on imports of goods such as electronic items, toys and furniture in February, drawing criticism that it was a protectionist move against foreign businesses. Sweden’s IKEA, for example, said at the time it was disappointed with the higher tariffs.
With inputs from Reuters