India Intensifies WTO Pressure on China Over Textile Trade Imbalances

India has escalated its trade dispute with China at the World Trade Organization (WTO), specifically targeting non-transparent subsidies that have led to a surge of low-quality, cheap textiles flooding the Indian market.

During a recent review of China’s trade policies, India raised concerns over several issues, including cross-border data regulations, export control measures on critical raw materials, and non-tariff barriers that have hindered the export of Indian textiles, particularly pharmaceuticals. Additionally, India questioned the consistency of these practices with global trade norms.

The move comes amidst a widening trade deficit with China. In the fiscal year 2023-2024, India’s trade deficit with China reached a staggering $85.07 billion. This year, the gap has already surpassed $40.8 billion.

Non-tariff barriers have significantly impacted India’s textile exports, particularly shrimp and bovine meat. India has sought clarity on the scientific basis for the proposed health certificate format for shrimp imports, which imposes stringent testing requirements on every consignment.

India has also reiterated its demand for market access for bovine meat, a request that has been pending with China for an extended period. China has attributed its restrictions to the outbreak of bovine nodular skin disease in India.

Furthermore, India has requested detailed information on China’s adherence to due process and transparency in anti-dumping investigations, particularly concerning textile products.

Investment Facilitation Development Agreement

India has also expressed its opposition to the China-led plurilateral Investment Facilitation Development (IFD) agreement at the WTO. This proposed global pact, which India is not a signatory to, emphasises transparency in investment measures and streamlining investment-related authorizations.

India’s primary concern is that the IFD agreement could undermine its ability to regulate foreign direct investment (FDI), particularly from countries sharing a land border, such as China. This could potentially impact India’s textile industry, which has seen significant Chinese investment in recent years.

India has questioned the legality of the IFD agreement within the WTO framework, arguing that it violates the multilateral trade body’s consensus-based decision-making principle.

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