India has initiated a probe into alleged exports subsidisation by Malaysia on an aluminium product, following a complaint by the domestic industry, according to a notification. The commerce ministry's investigation arm Directorate General of Trade Remedies (DGTR) has started an anti-subsidy investigation to examine whether Malaysia's subsidy programmes for exports of 'aluminium primary foundry alloy ingot' into India are impacting the domestic industry.
The product is primarily used for automobile and steel applications. Vedanta Ltd and Bharat Aluminium Company Ltd have filed an application before the directorate seeking initiation of the probe of subsidised imports of the product originating in or exported from Malaysia.
They have alleged that subsidised imports from Malaysia are causing material injury to the domestic industry and have requested the imposition of countervailing duties on the imports, DGTR has said in a notification. "On the basis of the duly substantiated written application by domestic industry, and having satisfied itself, on the basis of the prima facie evidence, substantiating subsidisation of the subject goods" exported from Malaysia, "the authority hereby initiates an investigation," it said.
The directorate will determine the existence, degree and effect of alleged subsidisation. If it is established that subsidies by the country are impacting the domestic industry, DGTR will recommend the amount of countervailing duty, which if levied, would be adequate to remove the injury to the domestic industry.
The period of investigation is from April 2019 to September 2020 (18 months). However, the investigation 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 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 provide this to boost their exports. Malaysia is a key trading partner of India.