In light to the ongoing face-off between the armies of India and China along the Line of Actual Control (LAC), India o rejected China’s demand to grant it market economy status.
New Delhi will now continue to treat its neighbour as a non-market economy, which will allow it to impose steep anti-dumping duties on imports from China.
The members of the World Trade Organization (WTO) are allowed to apply anti-dumping measures on any company if it exports a product at a lower price than its home market, and if the product threatens to impact the local industry.
China, which joined the WTO as a member in December 2001 agreed to allow the others member countries to treat it as a non-market economy for anti-dumping proceedings.
A non-market economy refers to a country which has a complete or substantially complete monopoly of its trade and where all domestic prices are fixed by the state.
“India must fulfil its obligation to WTO and recognize China PR as a market economy status. Surrogate country methodology for China PR expired from 11 December 2016. After the expiry of China’s accession to WTO, it must be treated in same way as any other WTO member and, regardless of the domestic law of a particular member, imports from China PR must be demonstrated on the basis of Chinese prices and costs,”~Chinese companies submitted before the Directorate General Of Anti-Dumping And Allied Duties (DGTR)
However, as per Indian investigation the Chinese producers failed to file relevant information to prove the market economy status and thus India will continue to treat it as a non-market economy.
Jayant Dasgupta, former Indian ambassador to the WTO, said China has to take positive actions, remove distortions from its market and provide evidence for other countries to make an informed decision about its market economy status. “If 80% of your companies are directly or indirectly controlled by the state and the banks are controlled by the Chinese Communist Party, then how can China claim that its trade partners should give it market economy status,” he said.
According to the WTO website the nation in 2019 initiated 18 anti-dumping proceedings in 2019, most of them against China.
China still remains one of India’s largest trading partners. India’s exports to China rose 3.8% to $17.1 billion in 2019, while imports contracted 7.5% to $68.3 billion.