The government may initiate an inquiry against alleged large-scale dumping of poor-quality Chinese polyvinyl chloride (PVC) resins — the raw material for healthcare items and water pipes — that are feared to contain Group I carcinogens, even as makers of locally produced good quality PVC have had to slash prices by 27% since mid-May to stay competitive, at least four people aware of the development said.

PVC is a raw material for healthcare products, and agricultural and water pipes. PVC pipes are extensively used for laying pipeline infrastructure of the government’s flagship scheme Jal Jeevan Mission (JJM), which has already covered 100 million rural households with clean drinking water connections.

“It is leant from the industry that there has been a surge in poor-quality PVC resin imports from China and the matter will be probed,” one government official working in an economic ministry said, requesting anonymity.

Another official associated with JJM said pipes are used for the mission only after they pass stringent quality tests. “Durability is an essential element of JJM, which has a stringent quality control system in place. However, the government has efficient mechanisms to curb poor quality imports of any material that could be harmful for consumption,” he said, asking not to be named. On August 19, Prime Minister Narendra Modi said 100 million rural households have been connected with a piped clean water facility.

According to the first official, the Directorate General of Trade Remedies (DGTR) may look into the matter as some domestic firms have flagged the issue. Email queries on this matter sent to DGTR, ministries of commerce, finance and Jal Shakti elicited no response. Domestic producers of petrochemicals, such as Reliance Industries, GAIL India, Chemplast Cuddalore Vinyls Ltd and DCW Ltd did not respond to email queries.

Representatives for two domestic petrochemical firms, speaking on the condition of anonymity, confirmed that they have approached the authorities with plea to check influx of poor-quality Chinese PVC resins. Chinese PVC resin imports have gone up from 6,000 tonnes in February to up to 1 lakh tonnes a month, one of them said. “While India is deficient in PVC and needs imports, the dubious quality of carbide-based PVC is a major concern,” this person added.

PVC resin can be made either through the process involving ethylene or through coal-based carbide. Chinese PVC resin is made from carbide-based resin, taking advantage of the country’s large coal deposits. Such Chinese products have high amount of residual vinyl chloride monomer (VCM), which is classified by the International Agency for Research on Cancer (IARC) as a Group I carcinogen, the representative said.

According to the second representative, China has started dumping PVC into India since the removal of additional anti-dumping duty (ADD) in February this year and the intensity has gone up to about 90,000-100,000 tonnes per month after the government cut import duty on May this year. “Since then, domestic firms have reduced PVC rates by ₹50 per kg from the ₹143.20 per kg level that existed before April .”

In order to calm raging inflation, which surged to 7.8% in April, the government on May 21 slashed import duties on various raw materials of plastic products, including PVC from 10% to 7.5%. Meanwhile, domestic industry also reduced PVC rates substantially. “In Ahmedabad, rate of PVC was ₹127.20 per kg before the duty cut, which has now come down to ₹92.20 per kg. A duty cut of 2.5% should result in drop of rates by only ₹3 per kg,” the second representative said, implying that Chinese PVC is being dumped in India.

“Government has to prevent sub-standard material from entering India. It should make BIS standard for PVC mandatory so that only quality material gets sold within the country,” this person added.

Source: Hindustan Times