India Raises Alarm Over Chinese Dumping Amid Escalating US-China Trade Tensions

India is grappling with a surge of cheap Chinese imports, particularly viscose yarn and steel, raising fears of market dumping as U.S. tariffs push Chinese exporters toward alternate markets.

Textile hubs in Tamil Nadu are already feeling the pinch. Orders for viscose yarn, a widely used material for garments, have dropped by 40% at some mills. Local producers say they’re unable to compete with Chinese yarn undercutting domestic prices by ₹15 per kilo.

“We can’t match these rates — our raw material costs are simply higher,” said Thirunavkarsu, a mill owner in Pallipalayam.

This influx comes as former U.S. President Donald Trump reinstated steep tariffs of up to 145% on Chinese goods. With access to the U.S. restricted, Chinese exporters are increasingly targeting India and other Asian markets, prompting widespread anxiety among Indian manufacturers.

India’s trade deficit with China has ballooned to $100 billion, and imports rose 25% in March, driven by electronics, batteries, and solar cells. In response, the government has set up a special monitoring committee to track suspected dumping across sectors and recently imposed a 12% safeguard duty on steel imports to protect domestic producers.

Chinese Ambassador Xu Feihong, in an op-ed, denied any dumping intent, stating: “We will not disrupt other countries’ industries or engage in cut-throat competition.”

Despite these assurances, India remains cautious. Experts argue that China’s structural export dominance, backed by vast overcapacity, continues to pose a threat to emerging markets like India.

“This isn’t just a trade imbalance — it’s a structural warning,” said Ajay Srivastava of GTRI. “Our PLI schemes are driving imports, not building manufacturing depth.”

India’s production-linked incentives (PLI) were intended to bolster domestic manufacturing, but critics say they haven’t reduced dependency on Chinese components, particularly in sectors like electronics and mobile phones.

While firms like Apple are shifting assembly to India, Chinese parts remain core to Indian output, dampening hopes of near-term self-reliance.

As global scrutiny intensifies, analysts urge India to use ongoing diplomatic channels to press Beijing for stronger anti-dumping safeguards, even as both nations attempt to ease broader geopolitical tensions.