Banning Chinese goods not feasible for India: Export body

India’s exports are likely to contract by 10% in the current financial year but could slide deeper into the red if the government pursues blanket ban Chinese imports, the premier exporters body said on Thursday, warning, “if Beijing retaliates, India is going to suffer more than China”.

The warning from the Federation Of Indian Export Organizations (FIEO) has come amid several exporters complaining of their consignments being held back by Hong Kong and Chinese customs, in retaliation of a similar action apparently being taken by Indian authorities at Chennai port.

The exporters’ body, instead suggested a cess on raw material exports to China could also give a boost to domestic manufacturing.

“We need to take a calibrated approach to ban imports from China, as our industry is more dependent on industrial inputs from China than any other nation. Instead of reacting hastily, we have instead suggested to the Directorate General of Foreign Trade that export of raw materials to China be tightened and a cess can be considered,” FIEO President Sharad Kumar Saraf said talking to reporters.

He said China may retaliate with its own set of restrictions on Indian exports and exporters were worried that they would ultimately have to pay up more or face a lack of materials.

FIEO Director General and CEO Ajay Sahai, however, sent out a terse warning and said, “if Beijing retaliates, then India is going to suffer more than China. Our economy will suffer if we ban Chinese products as there is a huge trade balance”.

“China’s exports to India constitute 2.8% of their exports. But India’s exports to China is 5.4% of our total exports,” Sahai said arguing any move by the Indian authorities must take into account the country’s high dependence on China.

Saraf suggested a cess on exports of raw material like cotton, spices, plastics, and chemicals to China instead of a blanket ban on imports.

China accounts for about 14% of India’s imports and is a major supplier to sectors like mobiles, telecom, power, plastic toys, and critical pharma ingredients.