India may impose safeguard tax to check Chinese imports: DIPP

India on Monday said it could consider imposing "some kind of safeguard duties' on Chinese imports to bridge the huge trade gap as it cannot be sustained in the long run.

"This trade deficit (between India and China) is not sustainable in the long run and therefore it is very important to understand for Chinese companies that in the coming years, India will have to put some kind of safeguards whether it is in terms of standards...

"India will do this because (India) can not sustain this (trade deficit) for over a long period," said Department of Industrial Policy and Promotion (DIPP) Secretary Amitabh Kant.

India's trade deficit with China stands at about $36 billion with exports totalling only $15 billion against $51 billion imports.

Speaking at the function of industry body PHDCCI Kant said that it was time that Chinese companies should increase invest in India and set up manufacturing bases.

"Chinese companies should actually manufacture the same goods (which they export to India) in India. We welcome Chinese companies. You please invest and manufacture in India. We will welcome telecom equipment, power equipment but kindly manufacture in India.

"Our government wants Chinese companies to make in India and use India as an export base for other places," he added. The Secretary said that China is facing problems in export solar equipment to the US as America have imposed anti-dumping duty.

"...please use India as a base for exports...you will face anti-dumping duty on every good in future so the only solution for Chinese companies is to produce in India and export to America," Kant said.

He asked Chinese companies to find domestic partners and export to regions such as Africa and Latin America.

"India is a very attractive FDI destination," he said, adding: "we expect that this year, we will get about $50 billion FDI" He said although China is setting up two industrial parks - Maharashtra and Gujarat - but there is need to increase investment.

"Between April 2000 and July 2014, China have invested only $411 million. This is only 0.18 per cent of India's total FDI which it has received so far. The Chinese figure is very low. Lower than Botswana and Rwanda. FDI from China in India is insignificant and extremely poor. This is shocking," he added.

Assuring full support and hand holding to Chinese companies, the secretary said the Chinese companies should look at sectors such as automobile, power, telecom, infrastructure and development of smart cities and industrial corridors".