Chinese Vice-Minister of Commerce Wang Shouwen met Commerce and Industry minister Piyush Goyal yesterday in Delhi to discuss matters relating to trade between the two neighbour countries.
In the meeting, Piyush Goyal raised the matter of market-distorting trade practices used by Chinese exporters, which is hurting the Indian manufacturing sector. It is widely believed that Chinese exporters indulge in dumping of their products, or selling below the cost price, which flood the target market with China made products while the local manufacturing in that country suffers as they can’t compete with the low-price Chinese products.
Had a meeting with China’s Vice-Minister of Commerce, Wang Shouwen and discussed bringing a trade balance between the two nations, clamping down on market distorting trade practices and boosting Indian service exports. pic.twitter.com/sl8keLUSo6
— Piyush Goyal (@PiyushGoyal) June 11, 2019
During the meeting Mr Goyal emphasised on the trade balance between India and China, and said that China should increase the import from India’s service sector, to correct the distorted trade balance. Informing about the meeting, Piyush Goyal posted on Social media saying, “Had a meeting with China’s Vice-Minister of Commerce, Wang Shouwen and discussed bringing a trade balance between the two nations, clamping down on market distorting trade practices and boosting Indian service exports.”
According to a report by ABP News, during the meeting, Goyal asked Shouwen how Chinese exporters are able to sell their products at below cost price. To this, the Commerce vice-minister reportedly said that the traders were taking undue benefits of Chinese Tax rebates given on exports. According to the report, Wang Shouwen said that the exporters in China are over‑invoicing their exports, which enable them to claim higher amounts of tax rebates. The money received from this rebate is passed on to overseas importers as discounts, which effectively bring down the price.
According to Chinese regulations, exporters of electronic gadgets and many other products can claim value added tax rebate worth 17% on the value of the product. Other categories of products are eligible for lower rebates at various rates depending on the type of product. Therefore, if they over‑invoice their exports, they get substantial tax rebates which enables them to sell at low prices, even at below cost price.
Held a meeting with Minister of Steel @DPradhanBJP & Steel Industry representatives
Discussed protectionist measures imposed by countries and resolved to take tariff & non-tariff measures to reduce unnecessary imports & boost exports, to spur job growthhttps://t.co/zgyGMuowWV pic.twitter.com/aOl8iTKRN4
— Piyush Goyal (@PiyushGoyal) June 12, 2019
In the meanwhile, Piyush Goyal also informed that the government is mulling tariff and non-tariff measures to reduce unnecessary imports and boost exports, in an order to increase job opportunities, especially in the steel sector. This was discussed during a meeting he had with Steel Minister Dharmendra Pradhan and representatives of the steel industry. The protectionist measures imposed by other countries were also discussed in the meeting.
Both the Ministers assured the steel industry that they will make all efforts to ensure that engineering goods exports double in the next 5 years and reach USD 200 billion by 2030.