Feb. 9 (Bloomberg) -- China said it was “seriously concerned” at Indian barriers to its exports, highlighting global trade tensions as the worst financial crisis since World War II sends demand plummeting.

India’s use of sanctions may have “a serious impact on bilateral trade relations,” Ministry of Commerce spokesman Yao Jian said in a statement on the ministry’s Web site today. India imposed a six-month ban on imports of Chinese toys last month.

“Buy American” provisions in a U.S. economic stimulus package were watered down last week after warnings from President Barack Obama and foreign leaders that they risked triggering a trade war. British Prime Minister Gordon Brown described “a retreat into protectionism” as the biggest danger facing the world economy.

“There’s always a certain amount of tension -- it’s just a little more heavy, given the strains that most economies are facing,” said David Cohen, Singapore-based director of Asian economic forecasting at Action Economics in Singapore. “The fear is that, as the recession deepens, there will be more pressure coming from the protectionist side.”

India banned imports of Chinese toys for six months on Jan. 23 for health reasons, Indian Commerce Minister Kamal Nath said Feb. 6.

“This is a matter of public concern rather than commercial concern,” Nath said, adding that the measure was “fully compliant” with World Trade Organization rules.

China will probably ask the WTO to investigate the ban, the official China Daily newspaper reported Feb. 5.

Toxic Toys

India’s move came after the U.S. Congress last year passed the first overhaul of consumer protection laws in almost two decades in response to a spate of recalls of Chinese-made toys. Mattel Inc. recalled more than 21 million Chinese-made toys in 2007 because of excessive lead content.

More than 4,000 Chinese toy companies closed last year because of waning demand and tighter safety standards, the official Xinhua News Agency reported Feb. 7.

India has initiated 17 trade actions, including 10 anti- dumping probes, against Chinese imports such as penicillin, hot- rolled steel, vehicle axles and linen since October, the Chinese ministry said today. It also cited additional Indian restrictions on imports of products including steel, chemicals and textiles.

The World Bank predicts global trade will contract this year for the first time since 1982. India’s exports declined for a third straight month in December and China’s fell by the most since 1999.

“I believe China won’t implement a ‘Buy China’ policy,” Vice Commerce Minister Jiang Zengwei said at a press conference in Beijing today. “We just need to boost consumption, whether it’s through domestically made goods or foreign-made goods. We will treat them equally without discrimination. Why in the current climate should we resort to protectionism?”