Is India considering easing curbs on Chinese imports amid industry pressure?

India’s commerce ministry and government think-tank NITI Aayog are reportedly pressing for a relaxation of some tariff and non-tariff restrictions on Chinese imports, amid mounting evidence of the country’s growing dependence on Chinese raw materials to sustain industrial expansion and export competitiveness, three government officials told Reuters.

According to the officials, the proposals under discussion include allowing anti-dumping duties on select products to lapse, and exploring tariff reductions on raw materials used in sectors such as leather and engineering goods, where domestic manufacturing capacity remains inadequate. The measures, they said, are part of a broader reassessment of India’s trade policy priorities as New Delhi seeks to balance industrial growth with strategic caution.

The debate comes at a delicate juncture for India, which finds itself straddling increasingly complex trade relationships with both Washington and Beijing. The United States has imposed punitive tariffs on certain Indian goods, while China — with which India’s border tensions have yet to be fully resolved — had until earlier this year slowed the supply of key commodities such as fertilisers.

In August, the Asian neighbours agreed to improve business linkages as part of efforts to rebuild confidence after the 2020 Galwan Valley clash. “A consensus is emerging within the government and the industry that, while negotiating a deal with Washington, India needs to fine-tune its trade policy, including trade relations with China,” one official said, according to Reuters.

Both the commerce ministry and NITI Aayog have reportedly supported industry calls for tariff relief on imported raw materials in inter-ministerial meetings. “Countries like Vietnam import Chinese raw materials at zero duty, putting Indian manufacturers at a disadvantage,” a second official said.

However, the final decision rests with the finance ministry, which controls customs and revenue policy. The official noted that cheaper Chinese inputs have bolstered India’s export performance in key sectors, including Apple’s smartphone assembly, pharmaceuticals, chemicals, and engineering goods. The officials spoke on condition of anonymity as the discussions are not yet public. The commerce ministry did not immediately respond to Reuters’ emailed request for comment.

In response to industry concerns, the commerce ministry last month extended the validity of advance authorisations for quality-controlled inputs — many sourced from China — from 180 days to 18 months. The move is expected to ease supply pressures for manufacturers reliant on imported components.

Official data showed India’s imports from China rose more than 16 per cent to over $11 billion in September, with cumulative imports reaching $91 billion in the first nine months of 2025, compared with about $80 billion a year earlier. Exports to China rose modestly to roughly $15 billion, widening India’s trade deficit further in Beijing’s favour, commerce ministry figures reviewed by Reuters indicated.

The government is also unlikely to renew anti-dumping duties on items such as axle beams, steering components and high-tenacity polyester yarn, another official familiar with the matter said.

However, India’s Directorate General of Trade Remedies has initiated fresh investigations into alleged dumping of cranes, toner cartridges and solar cells from China following complaints from domestic industries.

“This is not about abandoning self-reliance policy,” said one of the officials. “It’s about recognising that growth needs global inputs — and China remains too central to ignore.”

Industry experts have long warned that India’s manufacturing ecosystem remains heavily reliant on Chinese intermediate goods. According to Ajay Srivastava, founder of the Delhi-based Global Trade Research Initiative, imports from China account for 91 per cent of embroidery machines, 92 per cent of saw blades, 72 per cent of inverters and nearly half of all UPS systems. The dependency is even higher in high-value categories — around 90 per cent of antibiotics, silicon wafers and flat-panel displays, and 80 per cent of laptops are sourced from China, Srivastava said.

India’s trade deficit with China reached nearly $94 billion in 2024 and could rise to as much as $120–130 billion within the next two to three years, driven by increasing imports of electronics components, chemicals and other industrial inputs, the second official said.

The government is also considering case-by-case relaxation of curbs on Chinese investment in non-sensitive sectors, the official added, referring to rules introduced in 2020 that tightened scrutiny of investments from countries sharing land borders with India, primarily China.

With agency inputs