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China, India employ protectionist measures against each other

May 31, 2011

China has imposed a 7 percent and 15 percent customs duty on Indian  Guar gum  which is used across the textile, paper, explosive, pharmaceutical, cosmetic, food and medical industries. At the same time, India has decided to extend its anti-dumping duty of up to US$527 dollars per ton on yarns and fabrics imported from China, Thailand and Vietnam until February next year. New Delhi claims that the fabrics are being imported below market value and are destroying the domestic industry. The continued anti-dumping duty follows India’s quadrupled export duty of iron ore fines to China earlier this year also to protect the domestic economy. Iron ore is one of India’s largest exports to China, trade of which has since significantly fallen.

A slowing economy and rising prices are leading nations to take some trade protectionist measures. As a result, India which is the largest producer of guar gum, contributing to roughly 80 percent of global production faces customs duty in China, while Pakistan’s guar gum isn’t subjugated to the same import restrictions.

Similarly India’s textile ministry is claiming protection of its domestic industry in extending the anti-dumping duty.  An anti-dumping duty of up to 205 rupees per meter has also been imposed on flax fabric imported from China, including the Hong Kong SAR of China. The yarn is used in linings of clothes, quilt-cover, cotton-spinning, knitting and weaving, silk satin and thread-making.

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