In congruence with India’s policy to lessen economic trade with China, New Delhi is seeking to increase the number of import barriers on goods coming from Southeast Asia. Such a move seeks to prevent the re-routing of Chinese goods into India from other Asian countries.
The measure comes in response to deteriorating ties with China following borders clashes, which resulted in the death of Indian soldiers. India is planning to raise the quality standards for imports and place quantity restrictions, coupled with rigorous checks at ports, on goods travelling from Southeast Asian states. In this regard, an Indian official said, “There is a limited impact of performing duties. Now we want to raise the quality standards. Customs will be more cautious than before.”
Last week, India’s trade ministry restricted inbound shipments of televisions from Asian nations by requiring importers to obtain a special licence. New Delhi’s policy would specifically focus on electronic goods such as mobiles, laptops, and televisions, and would also extend to garments, toys, and leather products. According to Indian officials, the trade ministry is also concerned with goods coming in from South Korea. An official said, “A lot of the Asian partners have become a place from where just Chinese goods are routed. We are going product by product to design various kinds of action, most of which will be on non-tariff lines.”
Such a policy would primarily impact Thailand, Malaysia, Vietnam, and Singapore, which are all members of the Association of Southeast Asian Nations (ASEAN). India has signed Free Trade Agreements (FTA) with ASEAN countries and holds that such agreements unfairly favour these nations. For instance, George Paul, the Chief Executive of the Manufacturers’ Association for Information Technology, stated, “Very clearly in ASEAN agreements India has got, in many respects, the bad end of the stick, particularly in the field of electronics where we now find a number of products are being routed through the ASEAN economies to India.” However, Malaysian and Thai authorities maintain that they have not received any official confirmation of such a policy from India pertaining to increasing trade barriers.
In a statement to Reuters, Thailand’s trade ministry said, “The ASEAN treaty should be reviewed to make it more liberal in terms of tariff liberalization and rules of origin and to have simpler customs and verification procedures.” India has maintained that it would abide by the FTA is deems as mutually beneficial, given that India has a trade deficit with most nations it has signed FTAs with. It remains to be seen how far such a policy would impact India’s relations with ASEAN states, both economically and politically, especially against the backdrop of China’s growing dominance in the region.
India Increases Import Barriers on Goods From Southeast Asia
It aims to prevent the re-routing of Chinese goods into India from other Asian countries.
August 5, 2020
SOURCE: DHIRAJ SINGH/BLOOMBERG