Military Stand-Off Between India-China Threatens Economic Ties

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India plans to impose stringent quality-control measures and higher tariffs on imports from China, people with knowledge of the matter said, as a military stand-off between the neighbours threatens economic ties.

Talks are ongoing to raise import duty on products including furniture, compressors for air-conditioners and auto components, they said. The proposal is being evaluated by the Finance Ministry amid the government’s push for local manufacturing.

The need for import substitution started after disruptions to raw material supplies from China in the wake of the coronavirus pandemic.

A deadly clash between soldiers from both country along a contested Himalayan border this month added to calls for that process to be expedited.

Also, The state-run Bureau of Indian Standards is finalising tougher norms for at least 370 products such as chemicals, steel, consumer electronics, heavy machinery, furniture, paper, industrial machinery, rubber articles, glass, metal articles, pharma, and fertiliser to eliminate non-essential and cheap imports.

China is currently India’s biggest source of imports, with purchases including electronic goods, industrial machinery and organic chemicals running into almost US$70 billion (S$97.4 billion) last year. Beijing enjoys a trade surplus of about US$50 billion with New Delhi.

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