The Hindu Business Line : Dumping duty on caustic soda to continue

New Delhi, Nov. 25 The Designated Authority in the Commerce Ministry has recommended continuation of the existing definitive anti-dumping duty on caustic soda imports from China and South Korea.

After a sunset review of the definitive anti-dumping duty on caustic soda from the subject countries, the Authority has stated that caustic soda originating in or exported from China has been exported to India below its normal value, resulting in dumping.

Though the performance of the domestic industry has improved during the continuation of anti-dumping duty on the subject goods, “any discontinuation of anti-dumping duties on the subject goods from China and South Korea is likely to recur injury to the domestic industry”, it held.

The Authority noted that following a complaint from Alkali Manufacturers’ Association of India a couple of years ago, both provisional and definitive dumping duty on imported caustic soda from the subject countries was imposed. Subsequently, an initiation of sunset review was notified in November last to scan whether the expiry of anti-dumping duty would lead to continuation or recurrence of dumping, injury or both.

Caustic soda is an inorganic, soapy, robustly alkaline and odourless chemical that finds application in various fields like manufacture of pulp and paper, newsprint, viscose yarn, staple fibre, aluminium, cotton, textiles, toilet and laundry soaps, detergent, dyestuffs, drugs and pharmaceuticals, petroleum refining.

Tracing causal link, likelihood of continuance or recurrence of dumping and injury, the Authority said that imports from the subject countries were not undercutting the price of the domestic industry according to DGCI&S data. It was, however, noticed that the imports from South Korea on the basis of data provided by co-operating exporter were higher than reported by DGCI&S, indicating the data of DGCI&S had not captured all imports and its prices.

The other source of data is World Trade Atlas. The data from this source show that not only imports from China were substantially higher, but also undercutting the domestic selling price in the range of 5 to 10 per cent. The underselling, however, was in the range of 20 to 25 per cent.

The Authority points out that the existing anti-dumping duty is in the form of reference price, which was based on non-injurious price worked out on the basis of cost of production/sale of the domestic industry. It said during the course of five years, the reference price became “irrelevant in view of the fact that cost of sales have increased considerably”. Hence, the authority argued that in view of positive determination of likelihood of dumping and injury on account of imports from subject countries, it is of the view that continuation of the measure is needed against imports from subject countries.

However, given the current level of dumping from subject countries and the better performance of the domestic industry, the Authority is of the view that the measure in force needs to be ‘revised’.

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