US’ tariff war with Beijing could make India a dumping ground for Chinese products, warns think-tank

Amid a tariff war with the US, China could turn India into a dumping ground for its products such as electric vehicles and batteries, a report has claimed. 

“Both the USA and the European Union (EU) are cutting imports of electric vehicles from China. The raising of tariffs on EVs, batteries, and many other new technology items by the US may push China to dump these products in other markets, including India,” Global Trade Research Initiative (GTRI) said in its report.

The think tank highlighted the need for India to stay vigilant on the move by Beijing. US President Joe Biden has imposed heavy tariffs on Chinese electric vehicles, batteries, steel, solar cells, and aluminium, saying it would ensure that American workers are not held back by unfair trade practices.

These include a 100 per cent tariff on electric vehicles, a 50 per cent tariff on semiconductors, and a 25 per cent tariff each on electric vehicle batteries from China. In his address to the nation from the Rose Garden of the White House, Biden said America can continue to buy any kind of car they want, “but we’re never going to allow China to unfairly control the market for these cars. Period.” “I want fair competition with China, not conflict. We are in a stronger position to win that economic competition of the 21st century against China than anyone else because we’re investing in America again,” he said.

Biden alleged that for years, the Chinese government has poured state money into Chinese companies across a whole range of industries: steel and aluminium, semiconductors, electric vehicles, solar panels, and even critical health equipment, like gloves and masks.

Higher duties on Chinese face masks, syringes and needles, medical gloves and natural graphite provides India opportunity, GTRI’s founder Ajay Srivastava said, adding that the South Asian nation could ramp up production and exports of these products to bulk up US market. But, “India may not get any export advantage on remaining products like EVs, semiconductor as it a the net importer of these products,” the brief added.

“The US and European Union (EU) are taking active measures to cut reliance on China. With stagnant exports and rising imports from China, India may also need a China strategy,” he added.