India has raised serious concerns over a rising influx of low-cost Chinese goods, particularly in sectors like viscose yarn and steel, sparking allegations of dumping as Chinese exporters divert shipments away from the U.S. due to new trade barriers.
Textile manufacturers in Tamil Nadu, one of India’s key production hubs, are already seeing major impacts. Several mills report a 40% decline in orders for viscose yarn, a staple in garment manufacturing. Producers claim they’re unable to match Chinese prices, which are reportedly undercutting domestic rates by up to ₹15 per kilogram.
“Our cost of production is just too high to compete with this pricing,” said Thirunavkarsu, a textile mill owner in Pallipalayam.
This trend has intensified following the reinstatement of significant U.S. tariffs—reaching as high as 145%—on Chinese exports by former President Donald Trump. With American markets becoming harder to access, Chinese suppliers are increasingly shifting focus to countries like India, raising alarm among local industry players.
India’s trade imbalance with China has widened significantly, with the deficit now reaching $100 billion. Imports from China spiked by 25% in March alone, fueled largely by electronics, batteries, and solar-related components. In response, the Indian government has established a monitoring body to track potential dumping activities and has introduced a 12% safeguard duty on steel to protect its domestic market.
In a published opinion piece, Chinese Ambassador Xu Feihong denied the existence of any dumping strategy, stating: “We do not intend to harm other nations’ industries or participate in unfair competition.”
Still, Indian authorities remain vigilant. Experts argue that China’s expansive manufacturing capacity and cost advantage give it a dominant position that poses structural risks for developing economies.
“This is about more than just numbers—it’s a fundamental challenge,” said Ajay Srivastava from the Global Trade Research Initiative (GTRI). “Our PLI programs are inadvertently fueling imports rather than reducing reliance.”
India’s Production-Linked Incentive (PLI) scheme, designed to strengthen domestic manufacturing, has faced criticism for failing to decrease dependence on Chinese components—especially in electronics and mobile devices.
Even as global tech giants like Apple begin relocating assembly operations to India, many Chinese-made components remain integral to Indian production lines, complicating the path to industrial self-sufficiency.
Amid these pressures, analysts are calling for India to pursue stronger anti-dumping measures through diplomatic engagement with China, even as both countries attempt to navigate broader geopolitical challenges.
