Petrochem makers lobby for import protection

Asks for an anti-dumping duty (ADD) on purified terephthalic acid (PTA)

Chemical and petrochemical manufacturers have urged the central government to protect the home synthetic textile industry from foreign competition, and to specifically continue an anti-dumping duty (ADD) on purified terephthalic acid (PTA).

This is a sequel to the lobbying of user industries, including local synthetic yarn manufacturers, against the ADD, levied earlier this year. PTA, a raw material for polyester production, currently attracts ADD of $23.75-117 a tonne on its import from China, Korea, Thailand and the European Union.

"The duty protection was needed from cheap dumping from China, South Korea, Thailand and the EU. The domestic industry has in the past two years suffered material injury, resulting in losses to the extent of Rs 5 crore a day. The injury has threatened the very existence of some units," said Mahinder Singh, secretary-general of the Chemical & Petrochemicals Manufacturers' Association (CPMA).

PTA, a petrochemical product used for making polyesters, is produced in India by Mitsubishi and Reliance in the private sector and Indian Oil Corporation in the state sector. Before the levy, PTA was exported to India at allegedly "below normal value" and the domestic industry had "suffered material injury due to dumping". However, PTA users contested the findings, saying Reliance had been operating at over 100 per cent capacity.

PTA is used in making polyester staple fibre (PSF), polyester filament yarn (PFY) and film. In a representation to the commerce ministry, CPMA has sought to show that local prices of PTA and polyester products have been falling since the imposition of ADD. However, it says, the domestic polyester industry is suffering due to cheap "dumping" of fabric from China. Import of fabrics from China rose from $470 million in 2010-11 to $825 mn in 2013-14.

China, it complains, applies an 18 per cent customs duty on import of such fabrics. India has a customs duty of 10 per cent, with no specific duty on polyester fabrics. Import of PSF tripled to 16,785 tonnes in July-August, compared with 4,441 tonnes a year before. Similarly, purchases of PFY from abroad climbed 130 per cent to 8,965 tonnes in the past two months from a year earlier.