The Commerce and Industry Ministry on Monday initiated a probe into alleged low-cost imports of a certain type of yarn from China, which is impacting the domestic industry.
The Commerce Ministry's investigation arm Directorate General of Trade Remedies (DGTR) has started the probe to assess if the subsidy programme of China for exports of 'Viscose Rayon Filament Yarn above 60 deniers'' is impacting the Indian industry.
Association of Man-Made Fibre Industry of India (AMFII) has filed an application before the DGTR, on behalf of domestic industry, for anti-subsidy investigation on the imports of this yarn from China.
The applicant has alleged that material injury to the domestic industry is being caused due to subsidized imports from China and has requested for imposition of countervailing duty on these imports.
The product resembles silk, cotton and wool in its feel and texture. It is used in making woven fabrics, home furnishings, knitting and others. It is a popular choice for making fabrics such as georgettes, crepes and chiffons.
"On the basis of the duly substantiated written application by or on behalf of the domestic industry, and having satisfied itself, on the basis of the prima facie evidence submitted by the domestic industry, substantiating subsidization" of the yarn originating in or exported from China, "the authority hereby initiates an investigation to determine the existence, degree and effect of alleged subsidies...and to recommend the amount of countervailing duty, which, if levied, would be adequate to remove the injury to the domestic industry," the DGTR said in a notification.
If it is established that subsidies by China are 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 period for investigation is from April 2019 to March 2020. However, it will cover the data of 2016-19.
Under the global trade rules of the World Trade Organization (WTO), a member country is allowed to impose anti-subsidy or 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 subsidies to boost their exports.
India and China both are members of the Geneva-based multi-lateral organisation. China is a major trading partner of India.