Government may ban imports of Chinese telecom, power equipment: report

Alarmed by the widening trade deficit with China, Indian authorities are mulling a number of measures to restrict imports from that country, according to a report.

The commerce department has hammered out a 'China strategy' that calls for higher tariffs on most Chinese goods while proposing a complete ban on specific items such as power and telecom equipment. It also suggests making it mandatory for Chinese firms to enter into joint ventures with Indian companies before they can import heavy equipment and machinery from the country, says The Economic Times.

The move comes as India's trade deficit with China, its biggest trading partner, jumped 160 per cent to $23.9 billion in the five years to 2010-11.

"China has already taken over our power sector and is ruling the low-end market for mobile phone handsets," an unnamed senior official in the commerce department told the newspaper. "If we do not step in now with suitable policy measures, our trade gap with China will rise further."

While imports of Chinese goods rose to $43.5 billion in 2010-11 from $17.5 billion in 2006-07, exports lagged far behind, up to just $19.6 billion from $8.3 billion over five years, the report points out.

Indian officials say China acknowledges that trade imbalance is a problem, but it has done little to address it. The commerce department said Beijing has ignored seven specific requests from Delhi to ease imports of Indian goods that could have narrowed the trade gap significantly.