Link to the Article: https://www.bbc.com/news/articles/ckg5d505v8xo
Indian Viscose yarn producers such as 64-year-old Thirunavkars, are now facing declining demands by almost 40% because of the cheaper material imported from China. Almost 50 small spinning mills in Tamil Nadu have been reducing yarn production greatly. Trump has implemented very high tariffs on Chinese imports and China has turned to other trading partners such as India. Chinese goods that are being sold to India are at significantly lower prices, in turn creating very uneven product competition. India has responded to this by imposing a 12% tax on steel imports but China imports still continue to grow in India, specifically in electronic products. India continues to be heavily reliant on China for raw materials and imports from China have risen to 25% earlier in March. There are many concerns in the national community about Chinese dumping and many experts have pushed India to address the dumping concerns with China.
This article is significant because it discusses the potential effects this event can have on global trade. The US tariffs have created a ripple effect that has pushed Chinese producers to dump their excess products to other countries. This article also highlights the weak structure of India’s economy, especially when it comes to sustainable domestic industries. The lasting impacts this could have for the region could be economic instability, greater trade imbalances, and reductions in manufacturing. Many small businesses in India could shut down and this could lead to greater unemployment and domestic production. The greater imbalances of trade with China will weaken India’s economic situation and economic development could be decreased with the increase of cheap imports. India could respond to this by investing in infrastructure and skill development programs, creating less dependency on Chinese imports. India could also create more trade relations with countries other than China to reduce their strong reliance on Chinese goods. China could respond by being open with their trade strategy and engage more diplomatically with the countries they are affecting.
When connecting this article to class, we can relate this event to economic interdependence in international relations. India is heavily dependent on China to supply them with raw materials and intermediate goods. Sometimes interdependence can create cooperation and collaboration, but in this situation India is much more dependent on China than China is with India. This can create insecurities in India if China decides to dominate the trade market and use it as leverage against India.