China trying to stall exports from India: report

04 Nov 2016


China has built up its huge trade surplus with India at the cost of several small-time Indian exporters by erecting non-tariff barriers to foil attempts to export manufactured goods to China -  say reports.

A report in the Financial Express cited the instance of a small-time exporter from Mumbai who was effectively foiled from shipping out engineering goods to China. Reports said the exporter was told that a Chinese team was required to visit his factory and he would have to pay for it.

He was made to spend Rs10 lakh on Chinese team's visit to his factory. But it did not end there, this was to be repeated after six months. The exporter was told that another team would visit his factory before getting to the next stage of obtaining the permit.

Finding the idea of exporting to China was not worth his while and a waste of time and money, the exporter decided to dump the idea and looked for another destination.

The list of such non-tariff barriers (NTBs) by China is long, which is reflected in trade between the two countries. While India's goods exports to China stood at just $9 billion in 2015-16, imports from that country touched $61.7 billion, leaving an unprecedented trade deficit of $52.7 billion.

In a recent meeting with the Chinese ambassador-designate to India, commerce and industry minister Nirmala Sitharaman gave ''examples after examples'' on how non-tariff barriers are hurting India's exports to that country.

The ambassador is learnt to have said he would convey New Delhi's concern to Beijing. But, a Chinese delegation that had come to see Indian labs for phytosanitary clearances hasn't yet responded. Sitharaman is learnt to have told the ambassador that ''China cannot consume so much time for these things''.

While India has been using the tariff route to discourage imports in certain areas (especially agriculture), China has been effectively using non-tariff barriers to curb imports that it wants to avoid.

Most of India's imports from China are substandard products and have no quality checks either in China or in India, explaining the lack of resistance to calls for boycotting Chinese goods over China's ''continued support'' to Pakistan.

The Chinese embassy in Delhi, meanwhile, cautioned against such boycott calls saying that such a move would negatively impact India-bound investments from its enterprises and that the biggest losers would be Indian traders and consumers.

China's exports to India, which were 1.8 times India's shipments to that country in 2000-01, are close to six times what India shipped out to China In 2015-16, in large measure due to non-tariff barriers imposed by China.

While half of the top 10 segments of India's exports to China are low-value primary goods, the top 10 product categories that China ships to India are manufactured goods.

In fact, a study has found that India imported ''uncompetitive products that can easily be supplied by other competitors of China at cheaper prices to India'' to the tune of $9.7 billion, or 19.5 per cent of its total imports from the neighbour, in 2012.

On the other hand, ''many of the Chinese standards such as the CCC standard require certification by the Chinese authorities before a product can be put on the Chinese market,'' said Engineering Export Promotion Council chairman TS Bhasin. He said the factory has often to be inspected at the expense of the exporter, which is a lengthy and costly procedure. ''Many exporters, in particular SMEs, are discouraged to export in such a difficult environment,'' he added.

The sanitary and phytosanitary certification requirements for items such as seeds, seafood products and fruit and vegetables exceed international standards. Worse, the international system of arbitration for trade disputes is not recognised there.

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