India’s balancing act to attract more investment from China, U.S. and boost trade
The Indian government has over the last few months been walking a tightrope between maintaining its strategic objectives and encouraging more trade and investment from
The Indian government has over the last few months been walking a tightrope between maintaining its strategic objectives and encouraging more trade and investment from the two largest economies in the world — the U.S. and China This balancing act has seen gradual and incremental relaxations in several long-held policies of the government — whether it has to do with foreign direct investment (FDI) in e-commerce, allowing FDI from companies with Chinese ownership, or taking action against the dumping of goods in India by its trade partners. Anti-dumping rejections Data compiled by the Centre for Digital Economy Policy (C-DEP) and shared with The Hindu shows that one arena in which this balancing act is playing out is in the manner in which the country uses its anti-dumping duties. The usual procedure is for domestic industry to petition the Directorate General of Foreign Trade (DGTR) to initiate an investigation into whether a particular item is being dumped or sold at below-cost rates in India by its trade partners. The DGTR conducts an extensive investigation, examining the data, the impact on domestic industry, consults all relevant stakeholders, and then arrives at its conclusion. If it finds that dumping is indeed taking place, the DGTR then makes a recommendation to the Ministry of Finance to either impose an anti-dumping duty on the import of that good or to extend an existing duty for a further period of time. The data from C-DEP shows that the DGTR made 1,052 such recommendations to the Ministry of Finance in the approximately 30 years between 1991 and 2020. Of these, the Finance Ministry had rejected just 5, or 0.5%. The rest were accepted. However, since 2020, this trend has changed. The data shows that, while the average annual number of recommendations has remained largely the same, the rejection rate increased to between 50-62% in each of the years 2020-21, 2021-22, and 2022-23. It subsequently fell to 20.8% in 2023-24 and further to 6.1% in 2024-25, before rising again to 41.5% in 2025-26 up to December 31, 2025.
The data also shows that cases against China made up the bulk of the rejections since 2000. That is, cases that involved goods from China — either singularly, or as part of a group of countries — made up 72% of the total rejections between 2000 and December 2025. “This in itself is not surprising,” a senior government official told The Hindu on the condition of anonymity given the strategic sensitivity of the matter. “China has a higher share of rejections because it also has a higher share of investigations and subsequent recommendations against it.” Changing nature of imports This increase in rejections of anti-dumping duty recommendations also coincides with a changing composition of what India imports from China, with the focus shifting from finished products to intermediate goods that can be finished within India and exported onwards. For example, electronic components made up 3.3% of India’s imports from China in the first quarter of 2015-16. This has grown to nearly 13% as of the first quarter of 2026-27. Several other types of goods used in manufacturing within India, such as electric machinery, chemicals, plastics, have seen their shares rise over the same period. On the other hand, finished goods such as telecom instruments have seen their share fall, from about 18% to 11%, over the same period of time. Similarly, manufactured fertiliser saw its share fall from about 7.5% in 2015 to less than 1% in 2026. Consumer electronics have seen their share in imports from China halve over the same period. “Most of the goods imported from China are capital goods, intermediate goods and raw materials like active pharmaceutical ingredients, auto components, electronic parts and assemblies, mobile phone parts, etc, which are used for making finished products which are also exported out of India,” the Minister of State for Commerce and Industry Jitin Prasada told the Lok Sabha in February 2026. Pushback from the RSS However, this approach also comes with its political sensitivities, as can be seen in the reaction of the Swadeshi Jagaran Manch, the economic wing of the Rashtriya Swayamsevak Sangh (RSS).
The BriefWire