India probing into alleged fibreboard subsidisation by five countries

India has initiated a probe into alleged exports subsidisation by Indonesia, Malaysia, Sri Lanka, Thailand and Vietnam on fibreboards, which is impacting the domestic industry, according to a notification.

The commerce ministry's investigation arm Directorate General of Trade Remedies (DGTR) has started the probe to examine whether the subsidy programmes of these five countries for exports of fibreboards are impacting the domestic industry.

Greenply Industries/ Greenpanel Industries, Century Plyboards (India) and Rushil Decor have filed an application on behalf of domestic industry before the directorate alleging subsidisation of fibreboards from these five countries.

They have requested for initiation of an anti-subsidy investigation for levy of countervailing duties on the imports of the goods, DGTR said in a notification.

According to the notification, it has found evidence of existence of "countervailable subsidies" on production and export of the goods.

Such subsidised exports by companies in these five countries are causing material injury to the domestic industry and there is a further threat of injury to them.

In view of this, "the authority hereby initiates an investigation into the alleged subsidisation and consequent material injury to the domestic industry," it said.

The directorate will determine the existence, degree and effect of alleged subsidisation.

If it will be established that subsidies by these nations is impacting the domestic industry, DGTR will recommend the amount of countervailing duty, which if levied, would be adequate to remove the injury to the domestic industry.

Fibreboard is a type of engineered wood product that is made out of wood fibres.

The petitioners have alleged that the producers/exporters of the goods in these countries have benefitted from the actionable subsidies provided at various levels by their governments, including the government of different provinces and municipalities in which producers/exporters are located.

The period of investigation is from April 2018 to March 2019 (12 months). However, the investigation will cover the data of 2015-18.

Under the global trade rules of the World Trade Organization (WTO), a member country is allowed to impose anti-subsidy to countervailing duty if a product is subsidised by the government of its trading partner.

These duties are trade remedies to protect domestic industry. Subsidy on a product makes it competitive in price terms in other markets. Countries provide this to boost their exports.

These five countries are important trading partners of India and they all are members of this Geneva-based multilateral organisation.