India may impose up to $4.83 per kg anti-dumping duty on Chinese flax yarn

India may impose anti-dumping duty of up to $4.83 per kg on a certain kind of flax yarn, used in apparel industry, from China for five years with a view to guard domestic players from cheap imports from the neighbouring country.

The commerce ministry's investigation arm Directorate General of Trade Remedies (DGTR) has conducted a probe of alleged dumping of 'flax yarn of below 70 lea count' from China, following a complaint from Jaya Shree Textiles unit of Grasim Industries.

In its final findings of the probe, the DGTR has concluded that due to dumped imports, the domestic industry has suffered material injury.

"The authority considers it necessary to recommend imposition of definitive anti-dumping duty on the imports... for five years," the DGTR has said in a notification.

The recommended duty ranges between $1.30 per kg and $4.83 per kg. The decision to finally impose the duty was taken by the finance ministry.

Flax yarn is used for making flax fabric, which has applications in apparel sector such as dresses, jackets, shirts and home textiles.

Countries carry out anti-dumping probe to determine whether their domestic industries have been hurt because of a surge in below-cost imports.

As a counter measure, they impose duties under the multilateral regime of World Trade Organization (WTO).

The duty is also aimed at ensuring fair trading practises and creating a level-playing field for domestic producers with regard to foreign producers and exporters.

India has already imposed anti-dumping duty on several products to check cheap imports from countries including China, with which India has a major concern of widening trade deficit.

The deficit has increased to $63.12 billion in 2017-18 from $51.1 billion in 2016-2017.