DGS rejects request for safeguard duty on filament yarn

A Finance Ministry panel has decided against the industry demand to impose safeguard duty on import of a filament yarn used in denim jeans, sportswear and T-Shirts.
Solan-based Indorama Industries had moved the Directorate General of Safeguards (DGS) for imposition of the duty on imports of 'Bare Elastomeric Filament Yarn' into the country to protect domestic producer against "serious injury or threat of serious injury" caused by the increased inbound shipments.
However, after a probe lasting seven months to gauge the impact of the import on domestic industry, the DGS in the Revenue Department did not recommend imposition of the duty.

"In view of the discussions detailed above and the conclusions reached, safeguard duty on the imports of the 'Bare Elastomeric Filament Yarn of all deniers and varieties' is hereby not recommended and the investigation in this case is terminated," the DGS said in its final findings.
Safeguard duty is a temporary protectionist measure, which is brought in for a certain timeframe to avert any damage to the domestic industry from cheap imports.
The filament yarn is imported into India primarily from Vietnam, Korea, China, Singapore, Taiwan and Thailand.

The DGS concluded the imports have decreased in absolute terms and in relation to production and consumption in India.

"The volume of imports of bare elastomeric filament yarn decreased during the period of investigation (2012-13 to 2013-14).
"It is thus concluded that there is no surge in imports during the period of investigation, both in absolute terms as well as in relation to domestic production," it said.
Indorama, which claimed to be the sole domestic producer of the product, had requested for immediate imposition of safeguard measures for a period of three year.
The DGS also noted that recently the government, by reducing Custom duty, on raw material required for manufacture of bare elastomeric filament Yarn, from 5 per cent to Nil has already "provided a relief" to the domestic industry, which will 'improve their position further".

It has concluded that the domestic industry had a market share of 8 per cent in 2012-13 (Q1), which rose to 31 per cent during 2013-14 (Q4) whereas the market share of import decreases from 92 per cent in 2012-13 (Q1) to 69 per cent in 2013-14 (Q4).
Imports of the yarn decreased from 2,488 million tonnes in first quarter of 2012-13 to 2,086 million tonnes in fourth quarter of 2013-14. However, it increased to 2,543 million tonnes in the first quarter of the current fiscal.