The Chinese Aggression

China—with East Asia to an extent—is the main source of all the manufactured products in the sensitive items list: toys, locks, umbrellas, ceramics, glassware, writing instruments… Latest import figures prove that the deluge is by no means receding. From April 2000 to January 2001 (the latest month for which published data is available), imports from China (excluding Chinese Taipei) rose by almost a quarter to Rs 5,563.54 crore. The sharpest rise was in electronic items—by over half to Rs 940.75 crore. These include toys, calculators, video games, transistors. At Rs 940 crore, coal, coke and briquettes take second place and chemicals, with Rs 860 crore, third. Other significant imports are medical and pharma products and textile yarns and made-ups.

If the figures indicate a surge, one can guess the extent of inflow through our porous borders, mainly with Nepal and Bangladesh. Officially, Chinese imports are only about 5 per cent of the total value of our imports. But a greater damage is done by smuggling or underinvoicing. And it's easy to see why this won't cease even if the war room starts firing on all cylinders. Suppose India has a total import duty of 80 per cent on toys. It makes more sense for an importer, with the help of friendly inspectors, to route it through Nepal, which has only 3 per cent duty, or Bangladesh, which has 15 per cent. The obvious remedy is to cut tariffs to comparable levels. Instead, we are limiting the 215 entry points to only 19, which will encourage the enterprising to develop new routes and entry points.