China, Protectionism and India's Vitamin C Shortage
Posted by: Bruce Einhorn on September 16, 2009
Don’t catch a cold in India. The Economic Times reports on a sudden shortage of vitamin C in the country. “Due to curbs on raw material imports from China, drug manufacturers are finding it unviable to produce the medicine whose retail price is controlled by the government,” the paper (a content partner of BusinessWeek) reports today. Companies from China produce most of the world’s vitamin C as well as the key ingredients in many other vitamins, antibiotics and pain killers. New Delhi in June announced it would extend for another five years an anti-dumping tariff on Made-in-China Vitamin C. Now Indian companies complain they’re unable to produce the vitamin without imported raw materials from China, leading the Economic Times to report there’s an “acute shortage” in the country.
It’s unclear why, after five years of anti-dumping restrictions against Chinese imports, there’s suddenly a shortage of vitamin C. Still, with President Obama’s administration now imposing anti-dumping fees on Chinese-made tires, the Indian case is especially interesting. At first, India’s anti-dumping tariffs were for five years, but during that time apparently nothing changed and the government decided India needed five more years of protection. The Obama folks are saying their tariff will only last for three years. But that means it expires in 2012, when Obama will presumably be in the midst of his re-election campaign. Hard to see how he ends the policy then.
