Even as diplomatic talks continue between India and China following the brutal face-off at Line of Actual Control (LAC), New Delhi is mulling options to reduce India's dependence on Chinese products.
India, which is currently heavily dependent upon Chinese imports, when it comes to manufacturing activity, domestic consumption and exports, is considering a proposal to hike customs and import duties on over 300 items.
"The Finance and Commerce ministries have already held a series of discussions with line ministry officers on various policy options on Chinese goods and to reduce India's dependence on these goods," highly placed sources told CNBCTV18.
Government officials confirmed that multiple meetings have already happened and a few more are lined up before a formal proposal will be put up before the the Finance Minister and the Prime Minister for a final nod.
"Commerce ministry, earlier in May had sent a list of 300 plus items to Finance ministry asking for an increase in import and customs duties. The proposal was sent after commerce ministry had held deliberations and short these proposals from various line Ministries for a hike in duty," government officials said.
"The Finance Ministry is currently in talks with the Commerce Ministry to assess the duty impact and also to see whether a move on hiking duties is whether WTO compliant or not. It is also looking at the possible economic impact as the cost of raw materials imported from China will rise if the duties are hiked.
The Ministry is also worried about the fact that a lot of Chinese imports are crucial to India's manufacturing activity, which is just recovering from the recent lockdown," sources said.
The Commerce Ministry has held discussions with heavy industry ministry, department of pharmaceuticals, MSME, power, and renewable energy ministry, to see how India's dependence on Chinese imports can be reduced, sources said.
Some ministries and departments have also cautioned the commerce and finance ministry on the fact that a hike in duties could severely impact the on-going Make In India program and any move taken should be taken after detailed deliberations, sources added.