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India defends ban on Chinese toys

AFP, New Delhi
India on Friday defended its ban on Chinese toy imports, saying it acted out of safety fears, following a report that Beijing might challenge the move before the Wo rid Trade Organisation.
India prohibited the import of Chinese toys such as dolls, cars, trains and puzzles on January 23 for six months, triggering trade tensions between the world's two biggest emerging economies.
The ban was implemented on the grounds of public health and safety". Commerce and Industry' Minister Kamal Nath told reporters in the Indian capital, adding the action was "compliant" with WTO rules.
"India is a responsible country and before we take anv action we make sure that it should be WTO-compatible," Nath said.
His statements came after the state-run China Daily earlier in the week reported Beijing would likely ask the WTO Dispute Settlement Body if the Indian ban violated the trade body's rules.
The case, affecting at least a quarter-of-a-billion dollars' worth of toys, is a sign that China will use WTO rules more often to fight new trade barriers as the global credit crisis makes nations more protectionist, the paper said.
The ban comes as countries around the world hit by economic slowdowns have begun the rush to protect domestic industries.
India's toy industry’, which employs two million people, has long protested about the flood of cheaper Chinese toy imports. Chinese products have grabbed 60 percent of India's toy market.
But a major Indian industry body denied the Chinese ban was for any reason except for safety.
"India is WTO-compliant if it bans Chinese toy's on health grounds," said Anjan Roy, economic advisor to the Federation of Indian Chambers of Commerce and Industry.
"This ban is to protect children's safety, we're not being protectionist," he told AFP
He noted there was already a consumer case filed before a Mumbai court questioning the safety of Chinese toys and that China's toy industry has come under close scrutiny since millions of goods were recalled globally last year amid fears they were made with toxic lead paints or had design flaw’s.
Under WTO rules, China will have to seek "consultations" with India before taking it to the top global trade law enforcement body, Indian Commerce Secretary G.K. Pillai said.
India's ban comes as China's toy exports have taken a beating from the global financial crisis with demand shrinking in its key US and European markets.
Meanwhile, plugging potential loopholes in the ban, India's Commerce Ministry said it had alerted customs authorities to make sure Chinese toys did not enter Indian ports through a third country.
"The prohibition shall be applicable on all such toys which have originated from China, irrespective of the country of import," the ministry said.
Commerce Minister Nath insisted the toy ban would not sour expanding trade and economic ties between the neighbours, who fought a brief, bitter border war in the 1960s, because "this (ban) is a matter of public... rather than commercial concern."