The commerce ministry's investigating arm - the directorate general of anti-dumping and allied duties (DGAD) in a notification has said "sufficient prima facie evidence of dumping" of the product from China exists to justify initiation of 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 any alleged dumping and to consider recommending an amount of anti-dumping duty, which if levied, would be adequate to remove the injury to the domestic industry," the notification added.
If established that dumping has caused material injury to the domestic players, the directorate would recommend imposition of the dumping duty on the yarn.
Anti-dumping duties are levied to provide a level playing field to local industry by guarding against below-cost import.
The period of investigation covers April 2016 and March 2017.
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.
They are not a measure to restrict import or cause an unjustified increase in the cost of products.