Thirunavkarsu K
Thirunavkarsu, 64, has slowed down the pace of his spinning mill in Tamil Nadu, a state in southern India.
Since orders from nearby companies have decreased by almost 40% in the past month, the viscose yarn he produces—a popular material used to make woven garments—now lies in storage.
This is because Chinese imports of the material have flooded Indian ports and become 15 rupees ($0.18; £0.13) cheaper per kilogram.
China's manufacturers have started searching for other markets since Donald Trump imposed tariffs of up to 145% on Chinese goods entering the US.
Indian textile manufacturers claim that because Chinese manufacturers are dumping yarn in important production centers, they are suffering the most from trade tensions.
China is the world's largest manufacturer of viscose yarn, although India produces the majority of the nation's needs locally, with imports merely filling in supply shortages.
Thirunavkarsu and other mill owners are worried that the fierce competition may destroy their yarn.
"We are unable to match these prices. He claims that our raw material is more expensive.
About 50 tiny spinning mills in southern India's textile hubs of Pallipalayam, Karur, and Tirupur are "slowing production," according to Jagadesh Chandran of the South India Spinners Association, who spoke to the BBC. Many claim that if the problem isn't resolved, they will have to further reduce their operations.
Xu Feihong, China's ambassador to India, has assured India that his nation will not import goods and that it actually wishes to purchase more premium Indian goods for Chinese consumers.
In an opinion post for the Indian Express newspaper, he stated, "We will not engage in market dumping or cutthroat competition, nor will we disrupt other countries' industries and economic development."
However, since China, the greatest economy in Asia, is the world's top exporter of almost all industrial commodities, from textiles and metals to chemicals and rare minerals, concerns about dumping are widespread in India.
Trump's 145% tariff wall still applies to significant portions of Chinese goods, even though pharmaceuticals, and later phones, laptops, and semiconductor chips, were spared from high duties. These products are anticipated to compete in markets such as India.
According to Japanese broking house Nomura, whose research previously showed that China was flooding global markets with low-cost goods even before Donald Trump took office earlier this year, their sudden inflow will be "very disruptive" to growing economies in Asia.
The number of investigations into improper Chinese imports reached a record level in 2024. According to World Trade Organization (WTO) data, China was the target of a record 200 complaints at the meeting, including 37 from India.
Given its significant reliance on Chinese intermediate and raw materials, India, in particular, may be severely impacted. The gap between its imports and exports, or its trade imbalance with China, has already blown out to $100 billion (£75 billion). Additionally, imports increased by 25% in March due to a surge in solar cells, batteries, and electronics.
With its quasi-judicial arm looking into imports from a variety of industries, including viscose yarn, India's trade ministry has responded by forming a committee to monitor the flow of low-cost Chinese goods.
In order to assist stop a surge in low-cost shipments, mostly from China, that were forcing some Indian mills to reduce their operations, India recently placed a safeguard charge, or 12% tax, on some steel imports.
India has struggled to lessen its dependency on China despite these safeguards and a strong marketing drive by Prime Minister Narendra Modi's administration to increase domestic manufacturing. Imports have increased even after 2020, when border tensions between the two neighbors escalated.
That is because, according to Biswajit Dhar, a trade analyst based in Delhi, the government has only had "limited success" with its aspirations to employ subsidies related to production to transform India into a global manufacturer. Additionally, India still relies significantly on China for the intermediate items needed to manufacture final goods.
India still relies on Chinese components to produce these phones, even though western multinational corporations like Apple are increasingly looking to India to diversify their production lines away from China. Its trade deficit has increased as a result of the sharp increase in imports in industries like electronics.
According to Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI) think tank, India's growing imbalance is a "worrying story," especially as its exports to China have fallen to levels below 2014 despite a weaker currency, which should ideally benefit exporters.
"This goes beyond a simple trade imbalance. The warning is structural. In a social media post, Srivastava stated, "Our industrial growth, including through PLI (production-linked incentive) schemes, is fueling imports, not building domestic depth." Stated differently, India is not increasing its exports as a result of the subsidies.
"We can't bridge this deficit without bridging our competitiveness gap."
Given the opportunity that US trade tensions with China have created, India must immediately get its act together to accomplish that. But also because, according to Nomura, nations that have seen a significant increase in imports from China typically see the biggest downturn in manufacturing growth.
Amansa Capital's Akash Prakash concurs. The fear of being "swamped by China" was cited by him in a commentary in the Business Standard newspaper as a major reason why Indian private enterprises were not investing sufficiently. This opinion is also supported by a recent survey conducted by the ratings organization Icra.
China is under increasing pressure to find new trading partners outside of the US as concerns about Chinese dumping grow and organizations like the European Union want concrete assurances from Beijing that its markets won't be overrun.
According to Mr. Dhar, "China is trying to come clean amidst increased scrutiny" and wants to fundamentally change the narrative.
Delhi should leverage its improving relations with its larger neighbor to initiate a real discourse on its tough stance regarding dumping, Mr. Dhar adds, notwithstanding Beijing's pledges.
"This is an issue that India must flag, like most of the Western countries have."
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