06-05-2025
China has mastered the art of dumping. India must take a cue from US to fight back
So far, no other country, including India, has raised tariffs on China. But most have been increasingly wary of dumping done by China, which has harmed their domestic industries.
In a Truth Social post, Trump said he was raising the tariff on China because of 'the lack of respect' it had shown to the world's markets. 'At some point, hopefully, in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,' his post read.
Though President Donald Trump paused his 'reciprocal tariffs' on 75 countries on 9 April 2025, less than a week after announcing them, China was the only exception. He imposed a 125 per cent tariff as an answer to Beijing's retaliation to his moves. The White House later clarified the total rate for China was actually 145 per cent, including a 20 per cent fentanyl-related tariff.
Dumping, in trade terms, means selling goods at low prices. It is said to happen when a country or company exports a product at a lower price in a foreign market than it charges at home. Dumping is considered to be an abuse of international trade.
With the US effectively shutting its doors, the fear is that a cornered China will dump even more aggressively and flood other markets. India, in particular, must brace for impact.
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India's pushback to China's dumping
China has mastered the art of dumping as a weapon in international trade, aimed at killing the domestic industry of importing countries. Once any country becomes dependent on Chinese materials, exploitation starts.
The case of active pharmaceutical ingredients (APIs) is a living example of Chinese dumping and exploitation.
After 2004, several APIs, including penicillin G and folic acid, were dumped in Indian markets at ridiculously low prices. Once Indian production was severely diminished because of this, the game of exploitation began. China started selling the same materials at four to 15 times higher prices. In doing so, it not only harmed India's API industry but also endangered the health security of the country.
India has since responded by promoting domestic manufacturing through the Atmanirbhar Bharat Abhiyan and by imposing anti-dumping duties on some APIs.
More recently, in March 2025, India imposed anti-dumping duties on five Chinese items—soft ferrite cores, a category of vacuum-insulated flasks, aluminium foil, trichloro isocyanuric acid, and poly vinyl chloride paste resin—to protect domestic industries from dumping. The duties range from $89 to $1,732 per tonne and are for five years for most of these; a six-month temporary duty was imposed on aluminium foil.
Earlier, in 2024 alone, 79 per cent of the anti-dumping investigations filed by the Directorate General of Trade Remedies (DGTR) were against Chinese producers. The DGTR is the apex body responsible for examining and recommending trade remedies in India, including anti-dumping duties.
China will now dump more than ever
There is nothing new about Chinese dumping, but after President Trump's hiked tariffs on China, the danger has grown manifold. With steep US tariffs in place, it will be difficult for China to export so freely to the American market, so it will likely be compelled to dump its products in other countries.
Firstly, China has massive excess production capacity, leading to a surplus that it needs to offload. Its inability to sell in some markets compels China to dump the same materials elsewhere. China's focus has always been on export-driven growth, supported by the Chinese government.
Secondly, Chinese companies receive subsidies and other government support, enabling them to market products at artificially low prices. There is no doubt that such subsidies distort market prices and lead to unfair competition.
Thirdly, trade tensions have strengthened China's drive to control alternative markets.
Fears about Chinese dumping are not unfounded. India has already felt its deleterious effects on manufacturing not just in APIs but electronics, textiles, and toys.
While the Indian government claims it is keeping a close eye on the situation, industries remain wary about heightened dumping efforts by China.
It is worth noting that the US has been attempting to curb Chinese imports for long. Under Trump, these efforts have intensified, leaving little room for China to reroute its exports. The US Senate has introduced two bills to this end. One is the Neither Permanent Nor Normal Trade Relations Act, focused on restricting direct Chinese imports by cancelling China's special trade status. The other is the Axing Non-Market Tariff Evasion Act (ANTE Act), which would restrict goods coming from Chinese-owned factories in countries such as Vietnam, Malaysia, Indonesia, and Thailand. Through these proposed laws, the US is trying to plug all possible channels through which China might try to sell its products in the US.
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India must do more
For long, imports from China have been impacting India's manufacturing journey. The sector, which contributed 19.6 per cent of GDP in 1990–91, came down to 14.27 per cent in 2023–24. This is an alarm bell for India's growth aspirations.
There have been several instances where India has used trade remedies under WTO rules, including anti-dumping duties and safeguard measures. Most of the anti-dumping duties imposed by India were on China.
Despite such steps, however, India's dependence on Chinese imports has only grown. In financial year 2024–25, between April and February, India's imports from China rose by 10.4 per cent to $103.7 billion, compared to the same period a year earlier. Meanwhile, exports to China dropped by 15.7 per cent, totalling $12.7 billion. This has widened India's trade deficit with China, despite the long list of anti-dumping measures recommended by the DGTR.
As India aspires to be a manufacturing hub for the world, it can ill-afford any fresh spell of dumping from China. It could jeopardise the dream of Aatmanirbhar Bharat. We have to strengthen and streamline our administrative machinery to stop China from using unethical and illegal methods of dumping its goods in Indian markets.
Whenever India has invoked anti-dumping duties or any other safeguard measures, China has found ways to bypass them. Its tactics include product modification, where companies slightly alter products to fall outside the scope of anti-dumping duties; new producers, where fresh Chinese players replace those under restrictions; absorption, where exporters soak up the duty costs to maintain market share; and circumvention, where companies misdeclare the origin or characteristics of goods.
At the same time, China has also been successfully rerouting its goods via ASEAN and other countries. To thwart anti-dumping efforts, China has shifted its factories to other countries and is now supplying goods through them. We can take a cue from the USA's new proposed legislations, which seek to curb not only Chinese goods originating from China but also goods produced by Chinese factories outside China.
Ashwani Mahajan is a professor at PGDAV College, University of Delhi. He tweets @ashwani_mahajan. Views are personal.
(Edited by Asavari Singh)
