Amidst the ongoing LAC standoff and the diplomatic tensions with China, the Prime Minister’s Office has sought product-wise details of cheap imports, tax disadvantages (if any) and comparison with the domestic prices from all sectors. The aim is to curb low-quality shipments, especially from China, to promote manufacturing at the domestic level under Atmanirbhar Bharat.
PMO held high-level meeting
According to the reports, a high-level meeting took place at the prime minister’s office to discuss ways to promote Atmanirbhar Bharat and cut import dependency on China. During the meeting the PMO reportedly asked for further details to form an action plan. The discussion over reducing imports from China has underlined significance amidst increasing border tensions between the two nations. There has been a rise in the demand to boycott products from China.
The PMO has asked the industry to send suggestions and comments on goods and raw materials imported from China. The list includes wrist watches, ampoules, glass rods, glass tunes, hair shampoos, eye and lip makeup raw materials and ingredients, paints and varnishes, tobacco items, wall clocks, face powder and many others.
South Asian countries under scanner
The commerce and industry ministry is also revisiting the bilateral agreements with South Asian countries. The main aim is to check if these agreements lead to a rate difference of imports on finished products than the raw material.
South Asian countries covered under South Asian Free Trade Area (SAFTA) and bilateral pacts with Japan, South Korea, Sri Lanka and Singapore are under the ministry’s radar. There are suspicions that China, to take advantage of trade pacts, is routing its products through these countries. For example, China has recently heavily invested in Vietnam, which has an agreement with India for low-cost import and export.
A ministry official was quoted by ET as saying that there is a suspicion of circumvention of free trade agreements (FTA), and Chinese goods entering the Indian market by violating the rules of origin norms.
Details of imports sought to decide restrictions on import
As per reports, the industry has been asked to provide details about import surge between 2014-15 and 2018-19. The PMO also asked for the price comparison of the similar goods made in the local industry. Other areas under scrutiny involve the domestic capacity of these products, inverted duty issues (if any) and imports under free trade agreement. The views and suggestions will be sent to the commerce and industry ministry.
Recently, the government has put import restrictions on tyres. Also, now it is mandatory to take prior approval from the government for foreign investments from countries that share land borders with India. The government took this step to curb ‘opportunistic takeovers’ of domestic firms during the Covid-19 pandemic. Some experts suggest that the step was taken to restrict FDI from China. In recent times many concerns were raised over potential investments by China in struggling economies across the world taking advantage of the pandemic.