In a move that will give a boost to the domestic man-made fibre (MMF) sector, the Directorate General of Trade Remedies has recommended anti-dumping duty on polyester spun yarn from units based in China, Indonesia and Vietnam ranging between $4 per tonne and $281 per tonne for five years.

“...having established positive dumping margin as well material injury to the domestic industry caused by dumped imports from subject countries (China, Indonesia, Vietnam), except Nepal, the Authority is of the view that imposition of anti-dumping duty is necessary to offset dumping and injury,” the DGTR, under the Commerce & Industry Ministry, noted in its final determination.

The duties will have to be notified by the Finance Ministry before they are officially imposed.

Dumping duty

Dumping is said to take place when imports are at prices lower than the normal value or the price at which the item is sold in the domestic market of exporting country. Material injury is caused when the domestic industry suffers losses due to dumping. Anti-dumping duties can be imposed only when both dumping and material injury are established, per WTO rules.

“The determination of anti-dumping duties on polyester spun yarn will be a big help for the domestic spun yarn industry that is finding it difficult to find its own feet against giants of China, Indonesia and Vietnam,” said Sanjay Jain from the Confederation of Indian Textile Industry.

The DGTR carried out the anti-dumping investigations against polyester spun yarn following an application filed by eight domestic producers that was supported by 30 other manufacturers.

In its final report, the authority concluded that the product under consideration had been exported from all identified countries, except Nepal, at a price below the normal value, thus resulting in dumping.

The imports increased in absolute terms as well as in relation to production and consumption and were undercutting the prices of the domestic industry. As a result the prices of the domestic industry were getting suppressed leading to material injury, the report added.

“There is causal link between dumping of product under consideration from subject countries except Nepal and injury to the domestic industry,” it said.

In response to apprehensions of the user industry of a possible price increase following the imposition of anti-dumping duties, the DGTR report noted that the items are manufactured by fragmented industry comprising a large number of domestic producers in the country. “Thus, even after imposition of anti-dumping measure, the inter-se competition among domestic producers would ensure that the subject goods continue to be available to users at competitive prices,” it said.

Injury margin

However, since the injury margin determined in the present investigation was substantially lower than the dumping margin, the duty recommended was based on injury margin as per lesser duty rule, the report added.

The DGTR thus recommended anti-dumping duties ranging from $4 per tonne to $281 per tonne on polyester spun yarn imported from China, Indonesia and Vietnam with the duties varying between units and countries. These duties, once implemented, will be applicable for five years.

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