China’s unfair trade practices behind global turmoil: Goyal

Union Minister of Commerce and Industry Piyush Goyal said China’s “improper trade practices” are behind the current turbulence in the global economy.

“The starting point of this actually goes back to the beginning of maybe 2000 or 3 or 4 years before that. When China was admitted as a member of the WTO collectively, everybody in the world accepted China as a member of the WTO,” he said during an event here on Monday.

“Many parts of the world were convinced that China will transform its processes and bring transparency to their economy and will work on fair terms in the global economy. And we’ve seen that growth over the last 25-30 years, an almost relentless growth to become the second largest economy in the world,” the Minister said. “But what everybody closed their eyes to was that this growth was fuelled by unfair trade practices. This growth happened at the cost of fair trade. This growth had its foundation on every action which in the rules of the game would be considered improper,” Mr. Goyal said at the India Global Forum NXT 25 event.

He cited the unfair trade practices of China as the reason behind not permitting BYD to set shop in India. “We have to be cautious in whom we allow to invest in the country. We have to be cautious about our strategic interests, our security interests. As of now it’s a no,” he said. Mr. Goyal further said that India would turn this challenge into an opportunity and play the game according to the rules, unlike countries that resorted to predatory pricing, dumping, unfair labour practices and attacking supply chains of nations.

Asked if there were chances of China resorting to further dumping after the U.S. tariffs, he said that it was a challenge and advised industry to “stay on top of it.”

Speaking on “reciprocal tariffs”, Mr. Goyal underlined that India charged fairly low tariffs on the U.S. “If you look at the United States, for example, while our overall tariff may be 17%, but a lot of it are products that we don’t import at all. Our applied tariff to the United States is probably 7% or 8%. It’s not humongous,” he said. Applied tariff is the actual tariff charged by a country on goods imported.

This is Mr. Goyal’s first public statement after the announcement of U.S. tariff action on India.