Beijing locks in another five years of anti-dumping duties on Indian optical fibre as New Delhi widens its own trade remedy net, deepening a quiet tariff conflict between Asia’s two giants
NEW DELHI, Aug. 26: China will keep anti-dumping duties on Indian single-mode optical fibre in place for another five years, extending a trade barrier first erected more than a decade ago, even as India accelerates its own wave of trade remedy investigations that increasingly sweep in Chinese goods. The duelling measures underscore how the world’s two most populous economies, despite record bilateral trade and a cautious diplomatic thaw, remain locked in a grinding contest over industrial protection.
China’s Ministry of Commerce announced that the duties on Indian single-mode optical fibre would continue for five more years starting August 14, 2026, following an expiry review initiated in August 2025 at the request of China’s domestic industry, according to reports carried by CGTN, China Daily and the official portal China.org.cn on August 13. The duty rates remain unchanged, ranging from 7.4 percent to 30.6 percent depending on the exporter.
India has answered in kind, not with a single dramatic gesture but with a steady drumbeat of new cases. On August 21, India’s Directorate General of Trade Remedies initiated an anti-dumping investigation into imports of thermal paper originating in or exported from the United States, China and South Korea, according to the directorate’s public filings. Two days earlier, on August 19, the DGTR opened a countervailing duty investigation concerning imports of PVC, adding subsidy allegations to an already crowded docket of chemical and polymer cases.
An old duty with a long tail
The optical fibre dispute is among the most durable irritants in India-China trade relations. Beijing first imposed anti-dumping duties on Indian single-mode optical fibre in the early 2010s, arguing that Indian producers were selling into China below normal value and injuring domestic manufacturers. The measures have been renewed through successive expiry reviews, and the latest extension means the duties will have been in force for the better part of two decades by the time the new term ends.
For Indian fibre producers, the practical effect is exclusion from the world’s largest telecommunications infrastructure market. China’s build-out of 5G networks and its accelerating deployment of fibre-to-the-home infrastructure represent enormous demand that Indian exporters, already competitive suppliers to markets in Europe, Africa and Southeast Asia, cannot meaningfully contest with duties of up to 30.6 percent stacked on their prices.
The irony, noted frequently by Indian industry figures, is that the fibre optics trade between the two countries flows heavily in the other direction. India has itself imposed and extended anti-dumping measures on Chinese optical fibre and related products over the years, and the European Commission recently imposed countervailing duties of 3.7 to 8.1 percent on optical fibre cables from India, illustrating how the sector has become a global battleground of overlapping trade remedies.
India’s expanding trade defence docket
The thermal paper and PVC cases are the newest entries in what has become one of the world’s most active trade remedy programs. India’s DGTR has initiated dozens of investigations over the past year, with Chinese products the most frequent target. In December 2025, following a DGTR recommendation issued that September, India imposed five-year anti-dumping duties on cold-rolled non-oriented electrical steel from China at rates between 223.8 and 414.9 US dollars per tonne, a measure aimed at protecting nascent domestic capacity in a material critical for electric motors, transformers and generators, as reported by Business Standard and Mysteel.
In July, India imposed definitive anti-dumping duties on metallurgical coke imports from six countries and extended duties on seamless pipes from China until January 2027. The DGTR is simultaneously advancing an anti-dumping probe into a tuberculosis drug imported from China and Thailand, an investigation into glass fibre from China, Thailand and Bahrain, and an inquiry into halo-isobutene-isoprene rubber from China, Singapore and the United States, according to the directorate’s published notices and Indian press reports.
The pattern reflects deliberate policy. New Delhi has paired its Make in India manufacturing incentives with an increasingly muscular use of trade remedies, reasoning that production-linked subsidies cannot succeed if dumped imports undercut new factories before they reach scale. Chemicals, specialty steels, solar components and electronic inputs, precisely the sectors where Chinese overcapacity is most acute, dominate the case list.
A relationship of record trade and deep distrust
The tariff sparring plays out against a paradoxical backdrop. China overtook the United States to become India’s largest trading partner in the 2026 fiscal year, with bilateral trade reaching record levels even as the two governments maintain rival tariff walls. India’s trade deficit with China swelled to 112.16 billion US dollars in FY26, according to Deccan Herald reporting of official data, a gap that Indian policymakers cite as evidence of structural imbalance and that fuels domestic political pressure for further protection.
Diplomatically, the relationship has been thawing in fits and starts since late 2024. Chinese Foreign Minister Wang Yi’s visit to New Delhi in August 2025 produced commitments to ease Chinese export restrictions on fertilisers, rare earths and tunnel boring machines, curbs that had squeezed Indian agriculture and infrastructure projects. Direct flights have resumed, and both governments have signalled interest in stabilizing ties as each manages turbulent relations with Washington.
Yet the trade remedy machinery on both sides has proven immune to the diplomatic weather. Chinese reviews of duties on Indian goods continue to end in extensions. Indian investigations of Chinese goods continue to multiply. Neither government appears willing to spend political capital dismantling protections that domestic industries prize, and the WTO’s hobbled dispute settlement system offers little external discipline.
Stakeholder reactions
Indian fibre manufacturers greeted the Chinese extension with resignation rather than surprise. Industry representatives quoted in Indian trade press noted that exporters had long since redirected volumes toward Europe, the Middle East and Africa, though they warned that the EU’s new countervailing duties now threaten that pivot as well, leaving Indian producers squeezed from both ends.
Chinese domestic fibre producers, who petitioned for the review, argued that removing the duties would trigger renewed dumping and injury, a position the Ministry of Commerce accepted in full. Telecommunications operators in China, the nominal beneficiaries of cheaper imported fibre, have little visible influence over trade remedy outcomes.
On the Indian side, the paper and chemicals industries welcomed the new investigations. Domestic thermal paper producers allege that imports from the three targeted countries have captured market share through pricing that does not reflect production costs. The PVC countervailing case, meanwhile, is being watched closely by India’s petrochemical majors, which have committed billions of dollars to new capacity and view subsidised imports as an existential threat to those investments.
Importers and downstream users in India tell the opposite story. Converters, printers and construction firms that rely on imported inputs warn that each new duty raises costs in industries operating on thin margins, and that trade remedies increasingly function as a hidden tax on Indian manufacturing competitiveness. Their objections rarely prevail: DGTR investigations culminating in recommended duties have a high historical rate of adoption by the finance ministry.
Economic impact analysis
Measured in direct trade flows, the optical fibre extension is modest: Indian fibre exports to China had already dwindled under the existing duties. The economic significance lies in the signal. Expiry reviews are the moments when trade barriers can lapse quietly, and Beijing’s decision to renew, unchanged, duties dating back more than a decade tells Indian exporters that the Chinese market will remain functionally closed in sensitive sectors regardless of diplomatic atmospherics.
For India, the cumulative weight of its remedy program is becoming macroeconomically meaningful. Duties on electrical steel, met coke, chemicals and polymers raise input costs for downstream industries even as they shelter upstream investment. The policy bet is that short-term cost increases will be repaid by long-term industrial depth, the same wager China itself made decades ago. Whether India can manage the inflationary and efficiency costs of that strategy while sustaining export competitiveness is among the central questions of its economic trajectory.
The bilateral deficit adds urgency. At 112 billion dollars and growing, the imbalance with China dwarfs India’s deficits with any other partner. Indian officials argue that Chinese non-tariff barriers, from opaque standards to the kind of anti-dumping measures just extended, suppress Indian exports that could otherwise narrow the gap, particularly in pharmaceuticals, IT services adjacent goods and agricultural products.
Implications for importers, exporters and supply chains
For global firms, the India-China tariff undercurrent carries several lessons. Companies sourcing optical fibre and cable should expect the global patchwork of duties, Chinese measures on Indian fibre, Indian measures on Chinese fibre, and now EU measures on Indian cables, to keep regional prices divergent and to reward flexible qualification of suppliers across multiple origins.
Exporters shipping thermal paper, PVC and related products into India from any origin should monitor the new DGTR proceedings closely, register as interested parties where warranted, and model provisional duty scenarios into contracts, since Indian provisional measures can arrive within months of initiation.
More broadly, businesses building India-plus-one or China-plus-one supply strategies should recognize that the two countries’ trade defence regimes are becoming more active simultaneously. Routing production through either giant to serve the other is increasingly hazardous, and third-country hubs in Southeast Asia and the Gulf, themselves now frequent targets of circumvention probes, offer only partial shelter. In the emerging landscape, tariff engineering is no longer a specialist afterthought but a core discipline of supply chain design.
The fibre sector as microcosm
The optical fibre industry rewards close study because it compresses every dynamic of modern trade conflict into a single product. Fibre is strategically sensitive, forming the physical backbone of digital infrastructure that governments increasingly treat as a security domain. It is capital-intensive, meaning producers everywhere lobby hard against price competition that undermines investment recovery. And it is dominated by a handful of large manufacturers in China, India, the United States, Japan and Europe, each backed by governments willing to deploy trade instruments on their behalf.
China’s fibre industry grew explosively during the country’s national broadband and 5G build-outs, and Chinese producers now command enormous scale advantages. As domestic network construction matured, that capacity turned outward, prompting anti-dumping actions against Chinese fibre and cable in India, the EU and elsewhere. India’s own industry, led by producers that invested heavily in preform and drawing capacity, followed a similar arc a decade later: built for domestic demand under BharatNet and Digital India programs, then pushed into exports as domestic ordering slowed.
The result is a global sector in which nearly every major flow is taxed or contested. Chinese fibre entering India faces Indian duties. Indian fibre entering China faces the duties just extended. Indian cables entering Europe now face countervailing duties, and European producers have simultaneously pursued cases against Chinese cables. Analysts describe the outcome as a regionalization of what was once a global market, with prices, capacity utilization and investment decisions increasingly determined within tariff-defined zones rather than by worldwide supply and demand.
New Delhi’s strategic calculus
For Indian policymakers, the Chinese extension lands at a delicate moment. The government has spent the past year rebalancing its external economic relationships: negotiating the landmark free trade agreement with the European Union signed in January, implementing the comprehensive agreement with the United Kingdom that entered into force in July, deepening the pact with the European Free Trade Association states, and managing a turbulent tariff relationship with Washington that swung from punitive rates to a negotiated reduction within a year.
China occupies a unique position in this map: too large to confront, too distrusted to embrace. The bilateral thaw that began with border disengagement and Wang Yi’s 2025 visit has delivered practical gains, including the easing of Chinese export curbs on fertilisers and rare earths that India needed badly. But New Delhi’s strategic establishment remains committed to reducing dependence on Chinese inputs across electronics, pharmaceuticals, solar and telecom equipment, and the trade remedy docket is one of the few instruments that advances that goal without requiring diplomatic confrontation.
The tension between engagement and protection is visible in the data. Even as the DGTR opens case after case, imports from China keep climbing, because Indian manufacturing growth itself pulls in Chinese machinery, components and intermediates. Economists call this the dependence paradox: every step up the manufacturing value chain, in the short run, deepens the reliance the policy is meant to escape. Trade remedies address the symptom, import surges in specific products, while the underlying current runs the other way.
The WTO dimension
Both governments maintain the formal position that their measures comply with World Trade Organization rules, and both have used WTO litigation against each other’s trade practices in the past. But the practical restraint the system once imposed has faded. With the WTO Appellate Body still paralyzed, a panel ruling can be appealed into a void, and members increasingly treat adverse findings as advisory. India and China have each shown willingness to maintain measures of contested legality, calculating that the reputational cost is minor in a world where the largest trading powers openly flout the rulebook.
That erosion matters most for mid-sized exporters. When duties are imposed lawfully after transparent investigations, exporters can adapt, participating in reviews, offering undertakings, adjusting prices. When the discipline weakens, investigations become more result-oriented and reviews become formalities. Trade lawyers who practice before both the DGTR and China’s Ministry of Commerce describe a converging procedural culture: professionally conducted, heavily documented and almost always protective in outcome.
Procedure as policy: how the two systems compare
For companies navigating both regimes, the procedural differences matter as much as the outcomes. India’s DGTR operates with unusual transparency by global standards: initiation notices, questionnaires, oral hearings and disclosure statements are published systematically, and interested parties, foreign exporters included, can and do participate at every stage. The directorate completes most investigations within statutory timelines, and its recommendations pass to the Ministry of Finance, which retains discretion to accept, modify or decline them. That final step occasionally produces surprises: the finance ministry has declined recommended duties when downstream cost concerns prevailed, giving importers a genuine, if unpredictable, second forum.
China’s Ministry of Commerce runs a process that is formally similar, with registrations, questionnaires and hearings, but practitioners describe outcomes as more predictable once an investigation begins, particularly in expiry reviews initiated at domestic industry request. The optical fibre extension fits a well-established pattern in which continuation findings rest on projections of likely renewed dumping rather than current injury, an analytical approach that makes lapse of measures rare. Foreign exporters often calculate that full participation yields marginal benefit and concentrate instead on securing the lowest available individual rate.
The asymmetry in participation incentives compounds over time. Indian exporters who disengage from Chinese reviews face the highest residual rates, which then become the status quo for the next review cycle. Chinese exporters, by contrast, engage heavily in Indian proceedings, where participation demonstrably moves individual margins. Trade counsel on both sides note the resulting irony: the system with more genuine contestability attracts more foreign engagement, which produces more calibrated duties, while the more foreclosed system drifts toward maximum rates by default.
For third-country suppliers, the twin regimes create mapping obligations. A Korean or Thai producer of thermal paper now faces simultaneous exposure in the Indian investigation alongside American and Chinese respondents, and must decide within weeks whether to register, respond and open its books. The costs of participation are substantial; the costs of abstention, in the form of country-wide residual duties, are usually higher.
What to watch
Several developments will indicate where this quiet conflict heads next. The DGTR’s provisional determinations in the thermal paper and PVC cases, expected within months, will show whether India’s new investigations translate into duties at the pace recent history suggests. Any Chinese initiation against Indian pharmaceuticals or agricultural goods would mark an escalation into sectors India considers core export interests. Movement on the long-discussed resumption of broader India-China economic dialogue mechanisms would signal that both capitals want a channel for managing trade friction before it compounds.
And the behavior of third markets bears watching. As both giants raise walls against each other, their exporters converge on the same alternative destinations, the Gulf, Africa, Southeast Asia and Latin America, spreading the remedy contagion outward. Saudi Arabia’s recent five-year duties on Indian cast iron pipes and the steady drumbeat of ASEAN cases against Chinese steel suggest the pattern is already established.
The optical fibre duties will now run until 2031. Few observers expect the review that year to end differently.