As trade tensions rise globally, India needs to stay alert, especially with the United States imposing steep tariffs on Chinese goods. Najib Shah, former Chairman of the Central Board of Excise & Customs (CBEC), has warned that these tariffs could push Chinese exporters to divert goods into markets like India—possibly at sharply reduced prices.“Dumping can be a possibility,” Shah said, urging India to monitor all sectors closely to protect domestic manufacturers.
Shah said the temporary pause on tariffs is not necessarily a win for India. Indian exporters had a pricing advantage earlier, which has now disappeared.
“The comparative advantage which you thought we had has been wiped out,” he said. This makes it harder for Indian goods to compete with products from lower-cost countries like Bangladesh and Vietnam.Also Read: Will China trigger the ‘nuclear option’ in tariff war with US?
On trade negotiations with the US, Shah cautioned that any agreement must be approached with care. The US has walked away from trade deals when it suited them—even with allies like Canada and South Korea.A Free Trade Agreement (FTA) with the US could also come with hidden costs. Washington may push India to open up sensitive areas such as agriculture, public procurement, and intellectual property—sectors where India has strong domestic interests and less flexibility.If India chooses to cut import duties as part of any deal, Shah said it should do so under the Most Favoured Nation (MFN) principle—meaning the reduced tariffs would apply to all trading partners, not just the US. While this maintains fairness and WTO compliance, it also raises the risk of a surge in imports from countries like China.To guard against that, India must have strong safeguard measures in place. Shah stressed that being proactive now could prevent serious disruptions later if diverted goods from tariff-hit economies flood Indian markets.Also Read: Indian specialty chemical makers expect export gains as US tariffs hit rivalsFor the entire interview, watch the accompanying videoCatch all the latest updates from the stock market here
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