India to prevent trade partners mainly in Southeast Asia from re-routing Chinese goods to India
New Delhi is considering measures to prevent trade partners mainly in Southeast Asia from re-routing Chinese goods to india with little added value, two government sources said, amid strained ties with beijing and a push for self-reliance. The moves are expected to primarily hurt malaysia, thailand, vietnam and singapore members of the Association of Southeast Asian Nations (ASEAN) with which india has a free trade agreement (FTA). india is also worried about heavy trade flows from south Korea. “Raising duties has a limited impact,” said one of the officials. “Now we want to raise quality standards and also make sure that goods in FTA routes have roots in those countries. So customs would be more vigilant than before.” India’s trade ministry did not immediately reply to an email seeking comment.
The government will also discuss raising the value-addition requirement for products imported from those countries from the current level of 20%-40%, the official said, adding FTAs could be reviewed too. 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,” the official added. india has long had an uneasy relationship with china and a Himalayan dispute escalated into the worst clash in decades in June. india said 20 of its soldiers were killed.
China is also India’s second-biggest trading partner, with trade worth $87 billion in the fiscal year ending march 2019, and a trade deficit of $53.57 billion in China’s favor, the widest india has with any country. Thai and Malaysian authorities said they had not received any official communication on the issues of raising non-tariff barriers or re-routing of goods.