Commerce ministry recommends continuation of anti-dumping duty on chemical from EU, US

New Delhi: The commerce ministry has recommended continuation of anti-dumping duty for five years on a chemical used in pharma and agro industries, imported from the European Union and the US.

The move is aimed at guarding domestic manufacturers of 'Methylene Chloride' from cheap imports from the European Union (EU) and the US.

Continuation of the duty was recommended by the ministry's investigation arm Directorate General of Trade Remedies (DGTR), which conducted a probe into the alleged dumping of the chemical from these two regions.

In its findings, DGTR concluded that there is a "continued dumping" of the product from the EU and the US and that is causing injury to domestic industry here.

Despite the anti-dumping duty in force, the financial performance of the domestic industry has deteriorated, DGTR said in a notification.

"The authority recommends continued imposition of anti-dumping duty...For a period of five years concerning all imports of the subject goods originating in or exported from the EU and the US," it said.

It also concluded that during the period of investigation (January-December 2017), the domestic industry has shown negative growth in terms of the economic parameters such as production, sales, and profitability.

"The dumped imports from the EU and the US continue to cause injury to the domestic industry," it added.

Gujarat Fluorochemicals and Chemplast Sanmar had filed application before DGTR for review and continuation of the duties on these imports. The companies alleged continuation of dumping of Methylene Chloride from the EU and the US.

The duty recommended by DGTR ranges between USD 0.32-0.36 per kg. The finance ministry takes the final call for imposition of the duty.

In May 2014, the government had imposed anti-dumping duty on these imports from the US and the EU to protect the domestic industry.

Countries initiate anti-dumping probes to check if domestic industry has been hurt because of a surge in below-cost imports. As a counter-measure, they impose the duty under the multilateral WTO (World Trade Organisation) regime.

Imposition of anti-dumping duty might affect the price levels of the product in India. However, fair competition in the Indian market will not be reduced by the anti-dumping measures, DGTR said.

The imposition would remove the unfair advantages gained by dumping practices, prevent injury to the domestic industry and help maintain availability of wider choice to the consumers of subject goods.