Less than a year after the Centre removed anti-dumping duties on imports of Viscose Staple Fibre (VSF) from China and Indonesia to make the domestic yarn and garments industry more competitive, the Directorate General of Trade Remedies (DGTR) is set to hold an oral hearing later this month to re-examine the issue and give a fresh finding.

This follows the order given by the Customs Excise and Service Tax Appellate Tribunal (CESTAT) asking the designate authority to re-investigate whether the cessation of anti-dumping duty would likely lead to a continuation or recurrence of injury so as to warrant the imposition of anti-dumping duty for a further period of five years.

“The domestic user industry of VSF had established in the sunset review of the anti-dumping duties carried out by the DGTR last year that anti-dumping duties on the raw materials were making the entire value chain uncompetitive and making garments expensive for the Indian consumer. It is worrying that now the DGTR is looking at a review of the decision to remove the anti-dumping duties,” a Delhi-based garment manufacturer told BusinessLine.

The anti-dumping duty on VSF (up to $0.512 per kg) was enforced by the Finance Ministry in August 2016 for five years. In its sunset review of the duties, the DGTR concluded that there was no justification for recommending their continuation as the domestic industry enjoyed a dominant position in the Indian market and the market share of imports from Indonesia and China was low. The anti-dumping duty was subsequently withdrawn.

Oral hearing

However, now the DGTR has called for an oral hearing on July 26, of all stakeholders through video conferencing to discuss whether there was a case for extending anti-dumping duties on VSF for another five years. This is based on an anti-dumping appeal filed by the Association of Man-Made Fibre Industry of India on behalf of the domestic industry, mostly dominated by a single player. The government wants to be sure that the domestic industry producing VSF is not suffering injury due to the item being dumped by producers in China and Indonesia into India.

“Last year’s decision to remove anti-dumping duties on VSF was very important as downstream producers were facing a major profitability issue. But since its removal, both domestic users and producers are doing well. Because of other issues such as the Russia-Ukraine war and high cotton prices, profitability may have been affected a bit. But the removal of anti-dumping duties was helpful over-all,” said Durai Palanisamy, Executive Director, Pallavaa Group, Tamil Nadu.

Palanisamy said that various user industry associations would present their cases again to the DGTR in the oral hearing.