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Inter-Ministerial Panel to Monitor Potential Import Surge Amid U.S. Tariff Hikes
Context: Amid growing concerns over potential diversion of global trade flows, the Indian government has established an inter-ministerial panel to monitor imports entering the country, particularly from neighbours such as China, Vietnam, Thailand, and Indonesia.
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- The move comes in response to the United States’ decision to impose significantly higher reciprocal tariffs on these countries, which could prompt exporters to redirect their shipments to India.
- The newly formed panel will comprise officials from the Ministry of Commerce and Industry, Ministry of Finance, and relevant line ministries depending on the product categories.
- Its mandate is to track import patterns, detect any abnormal surges, and recommend countermeasures if necessary.
US and Reciprocal Tariffs and India
- The U.S. administration recently announced that reciprocal tariffs would be imposed on 60 countries with which it has major trade deficits.
- These tariffs, set to take effect from April 9, include a 34% duty on imports from China, 46% on Vietnam, 32% on Indonesia, and 36% on Thailand — all significantly higher than India’s prevailing import duty of 26%.
- According to a government official, India must remain vigilant in the coming months to avoid becoming a dumping ground for goods redirected from these high-tariff countries.
- “While feedback from export promotion councils and industry stakeholders has traditionally guided policy, the evolving global trade environment necessitates proactive government surveillance,” the official said.
- India already has a robust anti-dumping framework in place, with the Directorate General of Trade Remedies (DGTR) playing a key role in ensuring that unfair trade practices are addressed.
- However, the new panel is expected to strengthen this framework by responding in real-time to emerging risks from trade diversion.
- The government also maintains that any protective action it takes will remain compliant with World Trade Organisation (WTO) norms.
- A report by CareEdge has identified key sectors that may experience an increase in diverted imports from the U.S. to India.
- These include consumer goods, electronics, chemicals, and steel — all industries with high exposure to global supply chains.
As global trade dynamics shift rapidly, India is preparing to safeguard its domestic markets while ensuring it remains aligned with international trade obligations. The government’s proactive move reflects its intent to protect local industries from potential market distortions caused by tariff-led trade re-routing.
