China is firmly in the top spot, and the Modi government finally can't bear it anymore, and under the red eye, it has directly introduced policies against China to raise tariffs on China. But India will be shooting itself in the foot, laying a big hidden danger for India's future development.
Steel production in China
A few days ago, the Ministry of Finance of India issued an order, saying that in the next five years, some steel products in China and Viet Nam, import tariffs of 12% to 30%, involving the initial products of welded stainless steel pipes, India said that this is to protect and promote the development of its own enterprises.
Foreign media speculated that India's move was due to tensions between China and India. Prior to this, the Indian side said that Chinese companies had security risks, so it had stepped up scrutiny of Chinese investment projects and had already halted some major projects.
In this regard, India's Foreign Minister S Jaishankar said that the Indian side did not "close its business with China", which is based on what field of business the Chinese side is carrying out or under what conditions.
The latest data shows that as of March this year, India is already a net importer of finished steel, that is, India's import rate in finished steel has fully covered the export rate of its related products.
Among them, China is India's largest steel supplier. India imported 2.7 million tonnes of Chinese steel, doubling from the previous year. In April and May this year alone, India imported 1.1 million tons of finished steel, an increase of nearly 20% compared with last year.
Morty
It can be seen that India does have greater and greater demand in related aspects, but at the moment of increasing domestic demand, it issued an order to increase import tariffs, which will undoubtedly generate greater costs for derivative enterprises that rely on Chinese steel today.
In fact, the Modi government issued this order because India plans to significantly increase domestic steel production by 2047, tripling production capacity to 500 million tons of steel per year in the next 20 years.
Now, India is intensively deploying for this goal, undergoing large-scale infrastructure transformation, and India officials are calling on steel manufacturers to increase investment and expand the production capacity of the steel industry.
It is understandable that India is seeking its own industry, but the problem is that the Modi government is too anxious. The reason why India is still relying on China's imported steel is because the domestic output value is temporarily backward and cannot meet the existing demand.
India's steel industry
In August this year, India did a relevant investigation, when the Ministry of Steel did not agree to increase the tariff on imported steel products based on the opinions of all parties, because the current domestic demand is strong, relying on the domestic industry alone to supply short demand.
The Modi authorities' current move verbally advertises that they want to sell the market for relevant steel companies, but it only helps India's single steel production industry, and all derivative enterprises mainly based on finished steel can only choose Chinese imported products when the domestic output value is insufficient, which means that the cost will directly rise sharply. It can be said that Modi is now too anxious and wants to cut off his dependence on China, but he has "picked up the sesame seeds and lost the watermelon".
The Chinese side has always stressed that the border issue is not the only argument in bilateral relations, and China is willing to achieve win-win cooperation with India, but India has always regarded China as the "number one adversary" and has to benchmark China in all fields, but now it has intensified, even without considering its own production status. Then, the end result will certainly not be what the Modi regime wants.