India would not lend itself to be used for transshipment of exports of countries facing high tariffs in the US as it will dent its image of a trusted trade partner, commerce and industry minister Piyush Goyal said Friday.
The US has imposed 145% tariffs on imports from China while for other additional tariffs are just 10%. This difference is a major disruptor of global trade flows and is prompting companies to rethink their sourcing strategies.
“At no point of time will we allow India to become a route for transshipment or breaking the rules of origin so that other countries bring material into India, do a little bit of processing and supply it to a third country,” Goyal said at the 6th India Steel International Conference.
He asked the industry to immediately notify their administrative ministries or commerce and industry ministry if they come across such practices.
“We must cooperate to ensure India’s image as a trusted partner and its integrity remains intact. The international trust India has earned is the reason many countries want to enter into trade agreements with India,” he added.
The minister also asked the steel industry and other sectors to support their suppliers and not import goods that can be supplied by local manufacturers.
“Like you (steel industry) need protection from dumping. Low quality steel being imported into the country at irrational prices, you have a duty and obligation to support your supply chain. This message should go down not just to steel but every industry,” he added.
To check dumping of some steel products the government earlier this week imposed a 12% safeguard duty.
He singled out South Korea and Japan as examples where the users do not allow any other steel to enter their country giving preference to local steel even if it is slightly expensive.
Because of this India cannot export steel to these countries and this happens not because of government intervention but industry’s stance., the minister said.
He also pointed to the global developments in the recent months where now even the advanced countries are speaking to self-reliance, reshoring and bringing back manufacturing into the country.
The goal of getting back manufacturing of strategic products back to the US is the driving factor behind the recent moves by US President Donald Trump to drastically alter import duties. High tariffs have been imposed by the US on all its trading partners so that local manufacturing can compete with imports and bring down its trade deficit, which was $ 1.13 trillion.