India should abolish protectionism measures

The second round of the China-India Strategic Economic Dialogue in Shanghai attracted wide attention from home and abroad.

Most Chinese people agree with the necessity of deepening China-India cooperation. Economic and trade ties are important parts of bilateral relations for the two countries.

Bilateral trade volume jumped to $73.9 billion in 2011 from $4.9 billion in 2002. India is China’s ninth-largest trade partner, and China is the second largest for India. India is also one of the largest destinations for China’s contract foreign projects.

China’s manufacturing industries also bring benefits to Indian consumers, while China’s capital and equipment also accelerate infrastructure construction projects in India.

However, India’s trade protectionism still influences bilateral trade seriously. As India becomes a rising trade-remedy country, China becomes one of the largest victims of its trade-remedy measures.

In the field of chemical products, in the first half of 2012, China faced 309 anti-dumping investigations from foreign countries, among which 89 were from India, equivalent to the total number of the investigations launched by the European Union and the United States. India also implemented a series of restrictive measures, such as increasing import tariffs, to block Chinese products out of its markets.

As a big country, India’s ambition to develop its manufacturing industries is understandable for China. But the main driving forces to realize this ambition do not include trade protectionism, but a quality labor force, sound infrastructure bases, high efficiency of public services, and healthy competition. Protectionism only pushes India in the opposite direction.

To protect domestic industries, the Indian government levies a 19 percent import tariff on imported power equipment, making Chinese suppliers the largest victims of this action. The Indian government does not listen to the complaints from domestic customers about power equipment made at home. Most customers don’t think that Indian equipment can satisfy the increasing needs in the field without the help of Chinese equipment. The large-scale blackout in India in July just proves the negative effects of protectionism.

As the Indian government proclaims to implement new economic reform measures, it should firstly remove these obstacles in the way of healthy trade ties with China.

Translated from People's Daily By Li Yang