Government must protect market from Chinese dumping: MPC's Nagesh Kumar

The Centre needs to step in to protect the domestic market from dumping by Chinese exporters, Monetary Policy Committee (MPC) member Nagesh Kumar told ET, while urging local companies to premiumise through R&D investments."We should also protect the domestic market, especially in labour intensive industries, from the dumping of cheap Chinese goods. This has become a serious issue in the Southeast Asian countries, too, like Thailand and Indonesia, which have begun taking action," Kumar said in an interview. "India should also act to contain the damage."In the October policy review, Kumar, an external member on the Reserve Bank of India's (RBI) key panel, had voted to keep policy repo rate unchanged at 5.5% but favoured changing stance to 'accommodative'. The changing the stance will signal the readiness of monetary policy to support the industry, investments and growth, he said. Kumar sought for simultaneous actions by the government amid uncertainties caused by US tariffs. Firstly, the government should continue negotiations with the US to bring down the tariffs to more reasonable levels.While the effect on the economic growth rate may be limited to between 40-60 bps, a larger effect is expected on MSMEs and jobs."Second, we need to exploit the domestic markets for our labour-intensive goods better. The Government has undertaken GST reforms that should help in charging the domestic consumption engine. We need to exploit the domestic markets for our labour-intensive goods better," he said.Third, India should diversify its export basket and broaden free-trade agreements (FTAs) with other countries, Kumar said.The negotiations of the India-EU FTA have been expedited, and new ones have been planned with the Eurasian Economic Community. These agreements will open up access to virtually the entire European market to Indian goods."Tapping the potential of existing FTAs with Japan, the Republic of Korea, Australia and the UAE should be done more effectively, especially for the export of labour-intensive goods. This would help to reduce our dependence on the US market," Kumar said.