India starts probe into alleged subsidy on clear float glass by Malaysia

The government has initiated a probe into alleged subsidised exports of a particular glass category from Malaysia, which is impacting the domestic industry.

The commerce ministry's investigation arm Directorate General of Trade Remedies (DGTR) has started the probe to see whether the subsidy programmes of Malaysia for exports of clear float glass is impacting domestic industry.

Saint-Gobain India, Sisecam Flat Glass India, Asahi India Glass and Gold Plus Glass Industry have filed an application before the directorate for imposition of anti-subsidy of countervailing duty on imports of this glass being manufactured and exported by Malaysia.

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

Such subsidised imports are causing material injury and there is a further threat of injury to the domestic industry through their volume and price effects.

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

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

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

The product finds major uses in construction, refrigeration, mirror and automobile industries. It is a superior quality of glass.

The petitioners have alleged that the producers/exporters of the glass in Malaysia have benefitted from the actionable subsidies provided at various levels by the Malaysian government, including the government of different provinces and municipalities in which producers/ exporters are located, it added.

The period of investigation for the 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 Organistaion (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 provides this to boost their exports.

India and Malaysia both are members of this Geneva-based multi-lateral organisation. Malaysia is a major trading partner of India. Both have also implemented a comprehensive free trade agrement since 2011.

The bilateral trade between the countries have increased to USD 17.25 billion in 2018-19 from USD 14.7 billion in the previous fiscal. Trade balance is in the favour of Malaysia.