India probing alleged dumping of Chinese glass wool

India has initiated a probe into alleged dumping of glass wool, used in construction and air conditioning industry, from China following a complaint from the domestic industry.

The commerce ministry's investigation arm Directorate General of Trade Remedies (DGTR) has found sufficient evidence of dumping of the product from China to start the probe.

"The authority hereby initiates an investigation into the alleged dumping, and consequent injury to the domestic industry...to determine the existence, degree and effect of alleged dumping and to recommend the amount of anti-dumping duty, which if levied, would be adequate to remove the injury to the domestic industry," the DGTR has said in a notification.

While DGTR recommends the duty, the finance ministry will take the final call to impose the same.

The anti-dumping duty, if imposed, would help guard domestic players against cheap imports of the product.

The period of investigation is 2018-19. However, the data of 2015-18 would also be looked into by the directorate to understand the impact of imports.

UP Twiga Fiberglass Ltd has filed the application for imposition of anti-dumping duty on imports from China.

The product finds major uses in construction of metal and concrete building, heating, ventilation and air conditioning system to provide cooling services to buildings, acoustic application, shipbuilding, transport industry including railways and automobiles.

China is a key trading partner of India. The bilateral trade between the countries dipped to USD 87 billion in 2018-19 from USD 89.7 billion in 2017-18.

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 exporting 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.

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.