India moves to curb sales of Chinese products to government agencies

Economy
© Reuters.  © Reuters.

By Manoj Kumar

NEW DELHI (Reuters) – Amid calls for a boycott of Chinese goods after a border clash in which 20 Indian soldiers were killed, India’s government instructed sellers to declare the country of origin for goods and services purchased via a state-run online portal.

The government announced the change in requirements for users of its Government e-Marketplace (GeM) portal in a statement on Tuesday. It did not single out China but an official source told Reuters the main objective was to identify items coming from China.

Separately, the portal will provide a “Make in India” filter so that the government or its agencies could choose to buy only those products that meet the minimum 50% local content criteria, the statement said.

Welcoming the decision, the industry chambers, pressure groups close to Prime Minister Narendra Modi’s party asked the government to extend new rules to private online platforms.

The economic wing of the Rashtriya Swayamsevak Sangh (RSS), the guiding body of the ruling Bharatiya Janata Party (BJP), said Tuesday’s move would help curb Chinese imports and should be extended to other platforms like Amazon (NASDAQ:).

“The government should extend the rules to all platforms so that consumers get a choice not to buy Chinese products,” Ashwani Mahajan, co-convenor of Swadeshi Jagran Manch, told Reuters.

According to officials the portal, which was set up in 2016 to promote small businesses, has been misused by many companies to sell imported Chinese products like office furniture, computers, air conditioners, auto parts, machinery and other products.

“The decision will encourage domestic producers, as many domestic sellers were so far importing goods from China and selling through this portal,” a government source, with the direct knowledge of the matter, said.

India is also planning to impose higher trade barriers and raise import duties on around 300 products from China and elsewhere, two government officials said, as part of an effort to protect domestic businesses.

The government has instructed all its ministries and agencies to maximise procurement through the portal, run by the commerce ministry, and total purchases are expected to increase to 3 trillion rupees (nearly $ 40 billion) this fiscal year from 500 billion rupees (nearly $ 7 billion) from the year just ended in March.

(This story has been refiled to make clear in paragraph 5 that comment is from RSS economic wing)

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