The Hindu Business Line : Dumping duty on POY from China mooted

Study report
China's share in total imports has increased from 2 per cent in 2001-02 to 79 per cent during the period of investigation.
In absolute terms, the imports have increased during the PoI to a level of almost 25 times of the imports in the base year 2001-02.
Further, the share of domestic producers has declined from 95.45 per cent in 2003-04 to 94.13 per cent during the PoI.

New Delhi , July 22

The Designated Authority in the Commerce Ministry has recommended imposition of provisional anti-dumping duty on partially oriented yarn (POY) from China.

POY is a yarn of polyester and is an intermediate, which is subject to further processing, for instance — texturing or draw twisting — to make it suitable for weaving or knitting into fabrics.

In response to a written complaint filed by the Association of Synthetic Fibre Industries represented by a dozen industries including Indo Rama Synthetics (India) Ltd, Central India Polyesters Ltd, Welspun Syntex Ltd and Garden Silk Mills Ltd, the Authority initiated a preliminary dumping probe.

After due probe, it found that the subject goods originating in or exported from China have been exported to India below their normal value and the domestic industry has suffered consequential material injury. The period of investigation was from April 1, 2004 to June 30, 2005.

Accordingly, it has recommended provisional anti-dumping duty equal to $486 per tonne on all types of POY being imported from China.

Official statistics

A scrutiny of the import volume as reflected by the official statistics published by DGCI&S shows that China's share in total imports has increased from 2 per cent in 2001-02 to 79 per cent during the period of investigation (PoI). In absolute terms, the imports have increased during the PoI to a level of almost 25 times of the imports in the base year 2001-02.

The Authority found that imports from China as percentage of domestic production have increased almost manifold from a level of 0.37 per cent in the year 2001-02 to 7.34 per cent during the PoI. Further, the share of domestic producers has declined from 95.45 per cent in 2003-04 to 94.13 per cent during the PoI.

It is also noted that over the same period the demand has grown by 36 per cent, reflecting that the domestic industry was unable to compass any growth in the demand spurt. It also demonstrates that it has been injured with respect to market share.

Stating that the landed value per tonne of imports has declined drastically during the PoI compared to 2002-03, the Authority said that this supervened at a time when the cost of raw material has increased as a result of the soaring crude oil prices.

Besides, the profitability of the domestic industry has become negative during the PoI and the return on investment and cash flows have declined to a meagre level.

Counters allegation

The Authority also countered the allegation of any trade restrictive practices followed by the Indian producers and other competing industries.

On the industry's inability to fill the gap between the domestic demand and its own production, it is observed that the imposition of anti-dumping duty does not amount to any kind of restriction on suppliers and producers for supplying the subject goods in the domestic market.

Moreover, it needs to be noted that the domestic industry has unutilised capacity to cater to the local demand if the competition in the market takes place at a fair price, the Authority held.

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