Modi government tightens grip on Chinese goods entry via Malaysia route

The Government of India has taken strict and decisive action against the alleged circumvention of anti-dumping duty and unfair trade practices by China through the route of Malaysia. Anti-dumping duty is already in force in India on hydraulic rock breakers and alloy steel tools originating from or exported from China and South Korea. However, to bypass these taxes and duties and gain an unfair advantage in the domestic market, China was re-routing these products through Malaysia instead of shipping them directly to India. The Directorate General of Trade Remedies has now cracked down heavily on this illicit dumping.

Following preliminary inquiries that revealed significant irregularities, the Directorate General of Trade Remedies initiated strict monitoring and a formal anti circumvention investigation into these goods arriving from Malaysia. According to the notification issued by the Ministry of Finance, anti-dumping duties were already applicable on items including hydraulic rock breakers and alloy steel tools coming from China and South Korea. In light of suspicions that imports were being channeled through Malaysia to evade these duties, DGTR conducted a preliminary check which pointed toward discrepancies, triggering a full-scale anti circumvention probe covering seven major goods.

As part of the immediate regulatory measures, the government has made provisional assessment mandatory for these products arriving from Malaysia. Importers are now required to furnish a guarantee to the customs department for potential anti-dumping duties. Although a new duty has not been levied yet, this guarantee measure has been implemented to secure potential duty recovery pending the conclusion of the investigation. This official action by the DGTR was initiated following a formal complaint filed by the Indian company Dojco. The government is currently thoroughly examining import and trade patterns routed through Malaysia between April 2025 and March 2026.

This issue extends far beyond India and has become a matter of prominent global concern. The United States recently placed countries like Malaysia and Indonesia on its tier two risk list due to the illegal re-routing of China-linked goods. Chinese companies have been wrongfully stamping made in Malaysia labels on their products to evade US tariffs. Amid growing international pressure, the Malaysian Ministry of Investment, Trade and Industry has also taken stringent measures, while consequently, regulations governing the issuance of certificates of origin for goods dispatched from Malaysia to the United States or other global destinations have been substantially tightened.