China slaps 166% tariff on India: Dragon's announcement amid Pahalgam attack, huge crisis for Indian chemical companies

New Delhi/Beijing : China has announced a massive anti-dumping tariff of up to 166% on chemical pesticides imported from India, creating new tensions in India-China trade relations. The move comes at a time when tensions between India and Pakistan are at a peak after the Pahalgam terror attack. Indian chemical companies, which are already under pressure from the global trade war and US tariffs, are now in trouble with this Chinese move. Let us analyze this incident based on facts.

China's 166% tariff: Targets Indian companies

The Chinese Ministry of Commerce announced on May 6, 2025 that an anti-dumping tariff of up to 166% would be imposed on chemical pesticides imported from India, particularly products such as glyphosate and atrazine. The ministry claimed that Indian companies were selling these products at “unreasonably low prices”, causing harm to the Chinese domestic industry. The tariff has come into effect with immediate effect.

1. Affected companies: Indian chemical companies such as UPL, Rallis India, and DCM Shriram will be the worst hit by this tariff. These companies export pesticides worth more than $500 million annually to China.
2. Economic losses: The Federation of Indian Chambers of Commerce and Industry (FICCI) estimated that the tariff could lead to annual losses of $300 million to Indian exporters.

Pahalgam attack and Pak-China nexus

The announcement comes amid tensions between India and Pakistan, which have been at a peak after the terror attack in Pahalgam on April 22. After the killing of 26 tourists in the attack, India carried out attacks on 9 terror camps in Pakistan under 'Operation Sindoor', killing more than 100 terrorists. Pakistan sought support from China, and Chinese Foreign Minister Wang Yi supported the demand for an "impartial investigation", while also appealing to India and Pakistan to exercise restraint.

Experts believe that China's tariffs could be a strategy to indirectly pressure India. "China wants to weaken India economically and diplomatically, especially when it is embroiled in tensions with Pakistan," said Professor Anil Sharma.

Impact of Trump's tariff war

China's move comes against the backdrop of US President Donald Trump's global tariff war. Trump imposed a 34% tariff on imports from China and 26% from India on April 2, 2025, which put pressure on the economies of both countries. China, which is already struggling with economic slowdown and trade war, was trying to strengthen trade relations with India. But this tariff seems to be a reverse step in that direction.

According to a report by the Observer Research Foundation, China does not want to leave India's emerging market, but it is pressuring India to save its domestic companies.

Crisis on Indian companies

China is India's largest trading partner, and trade between the two countries was $99.2 billion in 2024, with India's trade deficit being more than $60 billion. Indian chemical companies will face the following challenges due to this tariff:

1. Reduction in exports: Pesticide exports to China may decrease by up to 40%.
2. Impact on Make in India: India's plan to promote the chemical industry under Make in India will be hit.
3. Alternative markets: Companies will now have to find new markets like Southeast Asia and Africa.

Uproar on social media

This news stirred intense reactions on X. @BWHindi wrote, “China announces 166% tariff on India, a big blow to Indian chemical companies.” @Zee24Kalak commented, “Amid Pakistan tension, this move by the dragon is a conspiracy to weaken India.” Users termed it as “China’s bullying” and “economic war”.

India’s counter strategy

The Indian government plans to challenge this tariff in the World Trade Organization (WTO). The Commerce Ministry said, “We are assessing this unilateral move and will take appropriate retaliatory action.” Experts suggest that India may impose retaliatory tariffs on Chinese electronics and smartphones, as Chinese companies like Xiaomi and Oppo have a large market in India.

Conclusion

China’s 166% tariff is an economic and diplomatic challenge for India, especially when it is embroiled in tension with Pakistan after the Pahalgam attack. This move is a crisis for Indian chemical companies, but it is also an opportunity for India to look for a counter strategy and alternative markets. Will India be able to defeat the dragon in this trade war, or will regional tensions deepen? Time and India's strategy will decide this.