China’s aggressive, surplus-dumping tactics across multiple sectors have deepened India’s trade deficit, which soared to $85.1 billion in FY 2024. With imports flooding the Indian market, China remained India’s largest import source, surging to $65.89 billion between April-October 2024, a 9.8% YoY spike that is slowly crippling India’s manufacturing base.
The relentless dumping of industrial and strategic chemicals by China, into the Indian market, is having a serious impact on domestic capacities, deepening our import dependency, and widening India’s trade deficit. By flooding India with artificially low-priced products, China is systematically undermining India’s self-reliance in critical sectors. Recent DGTR anti-dumping investigations into Titanium Dioxide (TiO₂) and Glufosinate expose the scale of these disruptive trade practices, threatening India’s industrial base and long-term economic security.
India’s fight against unfair trade practices extends beyond China’s aggressive dumping. Other global economic powerhouses, including the European Union (EU) and Japan, have also been exporting to India at prices that are significantly lower than those in their domestic markets, in order to flood the Indian market with artificially cheap imports.
Titanium Dioxide (TiO₂) is a prime example of how China’s overproduction is distorting global trade. As a critical input for the automotive sector, TiO₂ is widely used in coatings that enhance durability, UV resistance, and corrosion protection.
According to the recently concluded DGTR investigation, India’s Titanium Dioxide capacity is sufficient to meet domestic demand, yet Chinese imports have surged, undercutting the local manufacturers and rendering them uncompetitive. China’s massive production capacity of 55 lakh MT far exceeds China’s domestic demand, leading to their exports at aggressive price points that are below their cost of manufacturing.
Several global trade blocs, including Brazil, the EU, Saudi Arabia, and the Eurasian Economic Union, have already imposed restrictions on Chinese TiO₂ exports. With other major markets closing their doors, India has become a prime dumping ground for excess production, exposing domestic manufacturers to predatory pricing. Unless strong trade measures are enforced, Indian industries will continue to bear the brunt of this unchecked trade distortion.
Dumping is not limited to industrial chemicals alone. The case of Glufosinate, a broad-spectrum herbicide widely used in Indian agriculture, further highlights the depth of the problem. Despite India having adequate capacities to produce Glufosinate, Chinese firms have been dumping large volumes into India, causing injury to the domestic chemical industry. The DGTR launched an anti-dumping investigation after receiving substantial evidence of unsustainable pricing from Chinese exporters.
DGTR’s investigation into Glufosinate uncovered a staggering 600 % increase in imports within just two years. Chinese exporters were found to be dumping the herbicide at margins as high as 30 percent, making it nearly impossible for Indian manufacturers to compete. The result has been devastating.
The dumped imports forced at least one major domestic manufacturer of Glufosinate to shut down operations for a period of 3 months, resulting in significant job losses, affecting nearly 500 permanent employees at the plant, in addition to contractual labourers who also lost their livelihoods.
Recognizing the gravity of the situation, DGTR had initiated investigations that led to recommending anti-dumping duties on Glufosinate importers, in order to stop unfair trade practices and to restore fair market competition.
Another example of a sector facing rampant dumping is the PVC paste resin from countries such as Japan and the EU. In the automobile sector, PVC Paste Resin is widely used for interior trims, dashboards, seat covers, and underbody coatings, ensuring durability, scratch resistance, and corrosion protection. In healthcare, PVC plays an essential role in blood bags, IV tubing, catheter coatings, medical flooring, and protective gear.
Across all these sectors, the consequences of dumping are clear. Indian manufacturers are being forced to operate under severe financial stress, leading to shutting down of manufacturing capacities. The financial strain on domestic industries is growing, leading to widespread job losses and a reduction in industrial output. The long-term impact of these dumped imports are even more alarming.
As Indian businesses struggle to compete, they become increasingly dependent on foreign imports, weakening the country’s ability to shape its own economic and trade policies. Economic sovereignty is eroded when key industries fall into the hands of foreign suppliers, making India vulnerable to external price manipulations as well as challenges our supply chain resilience.
Dumping deters investments (both current and future) and threatens the growth of India’s chemical and manufacturing sectors. The threat of unfair competition from dumped imports deters companies from expanding their operations which could limit the growth of initiatives like ‘Make in India’ and ‘Atmanirbhar Bharat.’ If domestic industries are unable to compete on a level playing field, India will struggle to attract the kind of strategic investments needed to build long-term manufacturing capacity.
While anti-dumping duties on TiO₂ and Glufosinate are a positive step, India will have to implement broader countermeasures against unfair trade practices such as dumping. Strengthening domestic production through strategic investments, and expanding trade safeguard measures like Minimum Import Price (MIP), Quality Control Orders (QCO), and Anti-Dumping Duties (ADDs) to effectively counter unfair trade practices.
India is facing a systemic trade challenge where China and developed economies such as the EU and Japan exploit global trade structures to gain an unfair advantage. India must broaden its trade defences to ensure that it does not turn into a global dumping ground for China or any other economy.
(Ranjan Khanna is Indian Revenue Services Officer (Customs & Indirect Tax), Jaijit Bhattacharya is President, Centre for Digital Economy Policy; Views expressed are personal)
