Chinese Imports Wiping Out Domestic Industries

Chinese Imports Wiping Out Domestic Industries

New Delhi: Parliamentary Standing Committee on Commerce tabled its 145th report in Rajya Sabha expressing concerns at India’s widening trade deficit with China. The report submitted by the panel said that the Indian industry is been hit hard by the Chinese imports and they are causing unemployment.

The Parliamentary Standing Committee on Commerce said in its report that Chinese import has thrown a spanner in the wheel of India’s economic progress and industrial manufacturing especially at a time when it is extremely important to stimulate Indian manufacturing sector to at least 25 percent of country’s GDP.

Raising its concerns over increasing Chinese imports the report said that many domestic industries are being wiped out on the backdrop of surging Chinese imports in the Indian market. This has forced many manufacturers to become traders.

The Parliamentary Panel also identified some gaps. The panel said that the Indian government has not been able to tackle this effectively under-invoicing of Chinese goods, dumping of cheap goods, entry of prohibited goods by misdeclaration and smuggling.

Banks Will also get Affected

Since the Chinese import has affected the Indian industries and they are getting closed, the jobs have been affected too as Industries such as textiles are one of the major employment generators. Apart from employment, this will adversely affect the banks as the closure of the industry will create more stress for the banks which is already under huge NPA burden.

Meanwhile, there has been an upsurge in the bilateral trade of India. In 2017-18, it was recorded to be around $89.6 billion which was $38 billion in 2007-08. Also, there has been around 5 percent increase in Chinese import which was around 11.6 percent of all Indian imports in 2013-14 and it has reached to about 16.6 percent in 2017-18.

As per the report, the trade deficit with China at $63 billion amount to more than 40 percent of total trade deficit of India. Of all imports, in terms of quantum in India, almost one-sixth is formed by Chinese goods itself.

India’s export to China has increased by $2.5 billion during the period of 2007-08 while the imports also increased by $50 billion during the same period.

Impacting Health Too

The report also pointed out the adverse impact of all this on health. It said that the Chinese import has not only affected revenue and employment, rather it is impacting on the environment as the quality of imported items is low. It said that poor quality toys, colors, firecrackers, idols of gods and many other things from China are impacting the household of Indians too.

The committee also said that it is surprising and an alarming situation that Indian buyers get swayed away towards these products without even thinking of the safety hazards. A strong strategy is needed on the immediate basis so that the domestic MSME products can be promoted in a better way as they far better in quality as compared to Chinese cheap products.

It has been advised by the Committee that there is a need for creating public awareness where buying of low-standard imported products should be discouraged and there should also be a strong quality control framework.


The report also said that it is really fateful that we are providing the access to our market to Chinese goods in the name of ‘ease of doing business’. This is hampering our manufacturing whereas China is smart enough to protect is industry from Indian competition. It was recommended by the committee that BIS must also counter in the same manner as the Chinese.