The anti-dumping duty on a Chinese chemical, used in food and pharma industry, may be extended as the commerce ministry has recommended continuing the safeguards to protect domestic players from cheap imports.
The revenue department in May 2015 had imposed the anti-dumping duty on imports of the chemical, sodium citrate, from China for five years.
The duty period ends on May 19, 2020.
The application for continuation of the duty on imports of sodium citrate from China was filed by Posy Pharmachem Pvt Ltd. It was supported by Adani Pharmachem, Alpine Labs, India Phosphate and Sunil Chemicals.
In a notification, the commerce ministry's investigation arm Directorate General of Trade Remedies (DGTR) has said there is a "positive" evidence of likelihood of dumping of the chemical and injury to the domestic industry if the existing anti-dumping duty would be removed.
"The designated authority considers it appropriate to recommend continuation of definitive anti-dumping duty" on the chemical, it has said.
The directorate has recommended two duties USD 96.05 per tonne and USD 152.78 per tonne. The finance ministry takes the final decision to impose this duty.
In its probe, the directorate has concluded there is continued dumping of the product from China and "the imports are likely to enter the Indian market at dumped prices in the event of expiry of duty".
The applicant, it said, has requested for initiation of sunset review investigation concerning imports of Sodium Citrate coming from China, alleging likelihood of continuation or recurrence of dumping and consequent injury to the domestic industry in case of cessation of existing anti-dumping duties.
In international trade parlance, dumping happens when a country or a firm exports an item at a price lower than the price of that product in its domestic market.
Dumping impacts the price of that product in the importing country, hitting margins and profits of manufacturing firms.
According to global trade norms, a country is allowed to impose tariffs on such dumped products to provide a level-playing field to domestic manufacturers. The duty is imposed only after a thorough investigation by a quasi-judicial body, such as DGTR, in India.
In its probe, the directorate has to conclude whether the imported products are impacting domestic industries.
The imposition of anti-dumping duty is permissible under the World Trade Organization (WTO) regime. India and China are members of this Geneva-based organisation, which deals with global trade norms. China is a key trading partner of India.