India is all set to curtail cheap and substandard imports from China. After the Chinese App ban, a hike in the import of custom duty is on the cards.
Hike in Import Custom Duty
India is considering raising primary customs duties and non-tariff measures, such as standard specifications for several items. Though the move will affect imports from all countries, China will bear the brunt specifically. A list of 1,173 items including auto parts, compressors for AC and refrigerators, steel and aluminium products, and electrical machinery is under consideration. The list includes mainly china imported products and which can be substituted with local production.
Sources said that the decision is not just a retaliatory action for China’s border misadventures. Moreover, it a significant step towards boosting Aatmanirbhar Bharat. However, analysts have raised questions over the move, saying that the effect could be blunt if China raises subsidies on these items.
Banks Delay Issuing LCs
Banks have started delaying the issuance of letter of credit amid the rising concerns over Chinese consignments stuck at port. They fear delay in repayment of loans owing to sustained delays at a time when units are restarting after lockdown. Also, they will take this matter to the Reserve bank of India and the Ministry of Finance through the Indian Banks Association. Banks have turned cautious as the situation will give rise to bad loans with the ending of the moratorium period in August.
Shipments from China go Through Extra Checks
The Indian custom authorities are carrying out 100% physical inspection of Chinses imports since 22 June 2020. However, appeals from domestic industry bodies have forced the authorities to clear ports as soon as possible. FIEO president said the plan must be executed in a calibrated manner owing to the dependence industries have on Chinese inputs.
Imports Stuck at Ports
From essential pharmaceutical drugs to electronics, several Chinese goods are stacking up at Indian ports. Consequently, freight companies are refusing to lift more material from China. Businesses fear of becoming the casualty between the border war between the nations. In view of sovereignty and security, India has already banned 59 apps of China.
In all, the recent border tensions hardened India’s resolve to become self-reliant.