How India Retaliated To Curb Trade With China After Deadly Border Scuffle

India’s move to restrict companies based in neighbouring nations from commercial coal mining is the latest step aimed at China amid a border standoff.

Entities from countries that share a border with India can invest in commercial coal mining only after the government’s approval, the Ministry of Coal said on Aug. 3.

This came after India restricted vendors based in bordering countries from supplying goods and services to government departments citing national security. It also barred companies from these nations from bidding for public private partnership projects, and ordered states to follow the directive.

A border scuffle left 20 Indian and an unknown number of Chinese troops dead in June, triggering calls for boycotting Chinese goods. The two economies, however, are intertwined. China supplies two-thirds of bulk drugs used by Indian pharma companies, Chinese firms have invested billions of dollars in local startups and dominate the domestic smartphone market. And India runs a trade deficit with its neighbour that accounts of 14% of the nation's imports.

Here’s what the Indian government has done to curb trade with China so far:

Curbs On Television Imports

Last week, the government restricted import of colour televisions to promote domestic manufacturing and reduce imports of non-essential items from countries like China. The Directorate General of Foreign Trade, an arm of the Commerce and Industry ministry, amended the import policy for colour televisions from ‘free’ to ‘restricted’. Now, importing TVs will need a licence from the DGFT.

Apps Banned

India banned 59 Chinese apps including TikTok and Camscanner under Section 69A of the Information Technology Act (Procedure and Safeguards for Blocking of Access of Information by Public) Rules 2009, citing threat to national security. The government cited concerns on data security and privacy of 130 crore Indians.

Country Of Origin Tag

The government’s procurement portal made it mandatory for sellers to mention the country of origin on products they wish to sell through the platform, a move aimed at discouraging the use of Chinese products and promoting local alternatives. The Department for Promotion of Industry and Internal Trade also told e-commerce companies to start prominently displaying “country of origin" for all goods sold online in India.

Duty Hikes

India extended safeguard taxes on imports of solar cells and modules for a third year starting July 30. Power Minister Raj Kumar Singh also said that the country will stop power equipment imports from China.

India also imposed anti-dumping duty on:

• Digital printing plates from China, Japan, Korea, Taiwan and Vietnam for five years after an investigation by Directorate General of Trade Remedies.
• Aniline—used for dyes, drugs, among others—originating from China for a period of six months.
• Fluoroelastomers or synthetic rubber originating from China for three months.
• Steel and fibre glass measuring tapes and their parts from China for five years.

Even prior to the border tensions, India placed curbs on investments in domestic companies by peers from neighbouring nations including China to prevent opportunistic takeovers as the new coronavirus outbreak brought down valuations. Now, a foreign investor from any country that shares a land border with India can only invest with the government’s approval.