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India starts investigation into rise in Korean synthetic rubber imports

An application has been filed by Reliance Industries Ltd alleging increased imports of 'Polybutadiene Rubber' from Korea causing serious harm to the domestic producer

rubber, plant
Photo: Shutterstock

India has initiated a probe into an alleged increase in imports of a Korean synthetic rubber, used in tyre making, which is impacting domestic industry following a complaint by Reliance Industries Ltd.

According to a notification of the Directorate General of Trade Remedies (DGTR), under the commerce ministry, an application has been filed by Reliance Industries Ltd alleging increased imports of 'Polybutadiene Rubber' from Korea causing serious harm to the domestic producer.

After determining that there is prima facie evidence to justify initiation of the safeguard investigation, the directorate said it considers appropriate to initiate the investigation to determine whether the imports are increasing in such a way that it can hurt domestic industry.

The probe is being carried out under India-Korea Comprehensive Economic Partnership Agreement, which is kind of a free trade pact.

The product is used in manufacturing of tyres and an additive to improve the mechanical strength of plastics.

It said that the petitioner accounts for 100 per cent of total Indian production, as it is the sole producer of this rubber in India.

The period considered for the purposes of present investigation is from April 2015 to June 2019.

"The authority finds that there is prima facie evidence that imports of the product have increased significantly causing serious injury to the domestic producers of the like article in India and there is causal link between increased imports from Korea and the serious injury caused to the domestic industry," the notification has said.

In the probe, if it was established that the increase in imports have impacted domestic players, the directorate would recommend imposition of safeguard duty on the imports.

The finance ministry will take the final call to impose the duty.

This duty is imposed as part of trade remedy measures and it is permitted under the global trade rules of the World Trade Organisation. India and Korea both are members of this organisation.

The duty helps in providing a level-paying field to the domestic industry in terms of pricing of the chemical in the domestic market. Pricing is a key component after quality of products in any market.

The bilateral trade between the two countries increased to USD 21.5 billion in 2018-19 from USD 20.1 billion in the previous fiscal. Trade balance is highly in favour of Korea.