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China may go to WTO over India toy ban

China is likely to demand a World Trade Organisation (WTO) probe into India’s six-month ban on Chinese toy imports.

business Updated: Feb 04, 2009 21:38 IST
Reshma Patil

China is likely to demand a World Trade Organisation (WTO) probe into India’s six-month ban on Chinese toy imports.

India banned toy imports from China, its largest trade partner, on January 23, without citing a reason for the ban. The ban comes when the world's largest toy producer and exporter is collapsing under falling global demand for Chinese toys, rising production costs and product safety concerns.

On Wednesday, the official China Daily newspaper quoted a source close to the issue, who said that China would probably ask the WTO to probe whether the ban violates its laws. “The ban can’t hold water. The Indian side is doomed to lose in court if the Chinese government appeals to the WTO Dispute Settlement Body” the newspaper quoted Fu Donghui, managing director, Allbright Law Firm, Beijing, as saying.

According to the report, China considered the ban illegal and protectionist.

Chinese toys account for over half the toy retail market in India. In 2007, toy maker Mattel was forced to execute a worldwide recall of millions of made-in-China toys with unsafe levels of toxic lead paint.

Meanwhile, India Inc has said that the decision to ban the import of Chinese toys was taken to protect the health of the children and even if China dragged India to WTO, the ban is unlikely to be repealed. “So long as China does not have a firm system of checks and balances to ensure that their toys are non-toxic and safe for children, there is nothing to suggest that the ban in imports would be repealed at the WTO,” said Rajan Handa, managing director, OK Play India Ltd.

(With Sumant Banerji in New Delhi)