Ministry recommends anti-dumping duty on Chinese chemical

The commerce ministry has recommended the continuation of anti-dumping duty on a Chinese chemical used in food and pharma industry with a view to guard domestic players from cheap imports. 

In a notification, the ministry's investigation arm, the Directorate General of Trade Remedies (DGTR), has said there is a "positive" evidence of likelihood of dumping of Sodium Citrate and injury to the domestic industry if the existing anti-dumping duty were to be removed. 

"The designated authority considers it appropriate to recommend continuation of definitive anti-dumping duty" on the chemical, it has said. 

The directorate has recommended two duties USD 96.05 per tonne and USD 152.78 per tonne. The finance ministry takes the final decision to impose this duty. 

In its probe, the directorate has concluded there is a continued dumping of the product from China and "the imports are likely to enter the Indian market at dumped prices in the event of expiry of duty". 

The revenue department had imposed the duty in May 2015 for five years. It ends on May 19 this year. 

"Before the expiry of the said duty, Posy Pharmachem Pvt Ltd, constituting the domestic industry has filed a duly substantiated application before the authority... for initiation of sunset review investigation concerning imports of Sodium Citrate originating in or exported from China, alleging likelihood of continuation or recurrence of dumping and consequent injury to the domestic industry in case of cessation of existing anti-dumping duties," it added. 

In international trade parlance, dumping happens when a country or a firm exports an item at a price lower than the price of that product in its domestic market. 

Dumping impacts price of that product in the importing country, hitting margins and profits of manufacturing firms. 

According to global trade norms, a country is allowed to impose tariffs on such dumped products to provide a level-playing field to domestic manufacturers. The duty is imposed only after a thorough investigation by a quasi-judicial body, such as DGTR, in India. 

In its probe, the directorate has to conclude whether the imported products are impacting domestic industries. 

Imposition of anti-dumping duty is permissible under the World Trade Organization (WTO) regime. India and China are members of this Geneva-based organisation, which deals with global trade norms. China is a key trading partner of India. 

The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a-vis foreign producers and exporters.