India is planning to change the rules of origin clauses in free trade pacts, including the South Asian Free Trade Agreement, as the country fears that with the US-China trade war escalating, Beijing may divert its manufactures into the Asian markets.

India’s trade deficit with China has already increased to $62.9 bn in 2017-18 out of a bilateral trade worth $89.6bn in the last fiscal. The country does not have any free trade pact (FTA) with India. However, policy makers feel that Beijing may use other countries in South East Asia and South Asia, such as Bangladesh, with which India has FTAs.

As India has not imposed any sourcing restrictions on less developed countries (LDCs), analysts believe China can well use the LDC route. Besides Bangladesh, within Asia, Nepal, Afghanistan, Myanmar, Maldives and Cambodia are LDCs.

The country has increased its basic customs duty on printed circuit boards, including populated, stuffed and loaded PCBs, as well as camera modules and connectors used in mobile phones to 10 per cent from zero, seen as part of a bid to kick-start the much hyped "Make in India" campaign.