Alleged dumping of chemicals under lens

There has been a rise in investigations by the government into alleged dumping of chemicals and petrochemicals.

Anti-dumping investigation is usually initiated on petitions from a company or a group of companies complaining of increased imports into their markets here. Of late, such complaints have increased. In the past two months, the department of revenue has imposed anti-dumping duty on 10 new items, mainly in chemicals and petrochemicals (solvents, dyes and so forth) .

Dumping is defined as an unfair trade practice, with goods exported to another country at a price lower than its normal value. Thus anti-dumping, as approved by the World Trade Organisation, is a measure to restore fair trade by imposing additional "anti-dumping” duty on the imported goods to remove the price anomaly between these and domestic products.

Analysis shows the revenue department had, over the past two years, imposed anti-dumping duty on one or only two new items per month, while the others were renewals of earlier impositions. In 2010, however, new duties have been imposed on 26 items, mostly on industrial chemicals. On most, duty has been imposed for five years.

The ministry of commerce has also got feedback from the ministry of chemicals and fertilisers about heavy dumping of chemicals and petrochemicals by various European countries. The explanation is that India is one of the few markets witnessing increasing demand for petrochemicals and chemicals. Added to this is inadequate domestic capacity.

In 2008-9, the anti-dumping directorate got 31 applications for imposing duty on new items, of which eight were rejected and duty was imposed in 23 cases. In 2009-10, another 53 applications were received, of which 28 got rejected and duty was imposed on the rest. In 2010-11, till now, around 50 applications have been received.

Currently investigations are on for 60-odd products. Some of these are phenyl methyl pyrazole (from China), hexanelactum (Japan, EU), acetone (Japan, EU, Russia, China), acrylic fibre, barium carbonate, polyester yarn, polypropylene (EU, China), butadiene rubber (EU), azodicarbonamide (China), caustic soda, bus truck radials, carbon black for rubber, diethyl thiophosphiryl chloride (China), ethylene, propylene (EU, Brazil, China), phosphorus-based chemicals and cold rolled flat products of steel (EU, Japan, South Africa, US).

There has been no major anti-dumping duty imposed on Indian exports for some time.

"The last major duty was imposed on steel and steel items by Europe in 2008. Unlike 2005-06, this time India has to face the burden of heavy imports, since overseas markets for these European companies are reeling under slowdown and industrial capacity is running below normal,” said officials.