India could become dumping ground in US-China tariff war: GTRI

India could potentially become a dumping ground for a number of Chinese products including electric vehicles (EV), EV batteries and solar cells as a fallout of the ongoing tariff war between the United States and China, the think tank Global Trade Research Initiative (GTRI) said in a new report.

“Both the USA and the European Union (EU) are cutting imports of electric vehicles from China. The raising of tariffs on EVs, batteries, and many other new technology items by the US may push China to dump these products in other markets, including India,” the GTRI report stated.

Trade-related tension between China and the United States started after US President Joe Biden levied steep tariffs on several Chinese products such as EVs, EV batteries, solar cells, aluminium and steel. Biden contented that the move was aimed to protect American workers from unfair trade practices.

Subsequently, the hefty levies that the United States has imposed on Chinese products include100 per cent tariff on EVs, 50 per cent tariff on semiconductors and 25 per cent tariff on EV batteries from China. Biden also pointed out that the Chinese government had been funding state resources the manufacture of products such as aluminium, steel, solar panels and critical health equipment including face masks and gloves.

“I want fair competition with China, not conflict. We are in a stronger position to win that economic competition of the 21st century against China than anyone else because we're investing in America again,” the US President said earlier this week, in an address from Rose the Garden in the White House.

Strategically, India could capitalise on the United States’ imposing a steep tariff on critical health equipment manufactured in China and explore a bigger market for these products in the West. However, after the US and the EU’s import cuts, India needs to develop a robust strategy to tackle possible dumping of Chinese products in the country.