India Launches Anti-Subsidy Investigation Into Paperboard Imports From China, Indonesia

India’s commerce ministry launched an anti-subsidy investigation into imports of multi-layer paperboard from China and Indonesia on March 20. An analyst says the move signals that developing countries have started to scrutinize China’s production capacity relocation chain.

The Indian Paper Manufacturers Association filed a petition with India’s Ministry of Commerce on behalf of the Indian paper industry, requesting an investigation into subsidized imports that put pressure on domestic producers.

The multi-layer paperboard under investigation is manufactured from raw materials consisting of at least 51 percent bleached wood pulp (virgin wood pulp) that is coated or uncoated, according to the ministry.

The probe will examine whether manufacturers in China and Indonesia have benefited from subsidies that allow them to export multi-layer paperboard to India at unfairly low prices. If the investigation confirms the presence of government subsidies, India may impose countervailing duties on imports from the two countries.

An anti-subsidy investigation is a protective measure used in international trade to address unfair competition.

India’s investigation is the result of both China’s production overcapacity—which is spilling over into other markets—and India’s industrial protection measures, Davy J. Wong, a U.S.-based independent economist, told The Epoch Times.

“As China’s domestic demand further weakens, enterprises are compelled to rely on increased exports to absorb their excess capacity,” he said. “This trend is particularly pronounced in the case of low-to-mid-range manufactured goods, such as paperboard. Consequently, India’s domestic industries are facing direct competitive pressure.”

Over the past two years, it is not just the United States and the European Union that have begun to utilize anti-subsidy and anti-dumping instruments with greater frequency against China’s overcapacity and dumping practices, Wong said, but also developing countries such as India, and countries in Southeast Asia and South America.

India’s announcement comes amid the ongoing U.S.–Israeli war against Iran.

“India’s support for the United States—contrasted with China’s differing stance on Middle East issues—has indeed widened the strategic distance between the two nations,” Wong said. “This has effectively lowered the perceived cost for India of adopting trade measures against China.”

According to data from the United Nations Commodity Trade Statistics Database, the value of paper and paperboard products imported by India from China in 2024 was approximately $857 million.

While paperboard may not be considered a core category in the context of macro-level trade, Wong said, “the crucial point is that this represents a quintessential industry characterized by ‘low-to-mid-range manufacturing coupled with excess capacity.’ If even products of this nature are now coming under investigation, it signals a clear trend: China’s price advantage is beginning to directly undercut local industries within emerging markets, like India.”

Targeting China’s ‘Production Capacity Relocation Chain’

Indonesia is included alongside China in the investigation.

This is crucial, Wang said, as the move is not directed solely at China, but rather at China’s “production capacity relocation chain.”

He pointed out that in recent years, Chinese enterprises have frequently employed a typical strategy: “1. Establish manufacturing facilities in Southeast Asia (e.g., Indonesia, Vietnam); 2. Subsequently export the goods to a third country.”

“Consequently, India is simultaneously conducting investigations into Indonesia, thereby sending a very clear signal: the objective is not merely to block China, but to block the entire supply chain from circumventing restrictions,” he said.

The probability of this investigation leading into anti-dumping measures or sanctions is quite high, and this is merely the first step, Wong predicted.

India has already utilized anti-dumping and anti-subsidy measures across multiple sectors in previous years, Wong noted.

Meanwhile, South Africa announced on March 19 that it has imposed hefty anti-dumping duties on steel imports from China and Thailand.

Both India and South Africa are members of BRICS, an emerging markets organization led by China.

India’s anti-subsidy probe into China’s paperboard is “not an isolated incident; rather, it signifies that emerging markets have begun to collectively take defensive measures against China’s manufacturing,” Wong said.

Luo Ya and Reuters contributed to this report.