Safeguarding the interest of local manufacturers from cheap imports, the government of India has levied an anti-dumping duty (ADD) on low-density polyethylene (LDPE) imports from Qatar, Saudi Arabia, Singapore, Thailand, United Arab Emirates and the United States of America.

A notification issued on April 1 by the Ministry of Commerce and Industry said that the ADD would be levied equivalent to the quantum of damage Indian companies suffered during the three years between the financial year 2016-17 and 2018-19. Levied for a period of five years from the date of notification, the ADD was fixed between US$17.05 and US$216.76 a tonne on various producers and suppliers from the aforementioned countries depending upon the quantum of damage done to Indian companies.

Source: Ministry of Commerce and Industry

The complaint was raised by the Chemicals and Petrochemicals Manufacturers Association (CPMA) on the basis of Indian user industries importing large quantities of LDPE from these countries at a price that was substantially lower than the prevailing price in the international and domestic markets. According to the notification, Reliance Industries Ltd, which is a member of CPMA and a producer of LDPE in India, provided the prescribed information in the application.

The Authorities on the basis of complaints raised initiated an investigation through a notification on October 23, 2020, and sought details on the prices and quantity dispatched to Indian importers by the overseas companies based in the aforementioned countries. Also, information was sought from the domestic producers and users industries seeking justification of such import.

“The Authority determined that dumping margin for exports from Qatar and UAE was negative. Thus, imports from Qatar and UAE into India have not been dumped imports. Hence, the investigation is terminated against exports of the subject goods from the UAE and Qatar. LDPE was being dumped into India from the USA, Saudi Arabia, Singapore, and Thailand. Considering the normal value and the export price of the product under consideration, the dumping margin has been determined for the subject countries. The dumping margin was positive and significant for subject countries,” said the notification.

Source: Ministry of Commerce and Industry

In fact, the volume of imports into India declined in 2018-19, as the domestic industry increased its capacity. However, during the period of investigation, imports increased, in absolute terms as well as in relation to production and consumption. LDPE imports from these countries were undercutting the prices of the domestic industry, the authorities found.

The investigation discovered that the imports have suppressed and depressed the prices of the domestic industry, as the landed price and selling price of the domestic industry declined despite an increase in raw material price. Also, the capacity, production, and capacity utilization of the domestic industry increased. The domestic sales of the domestic industry increased till 2018-19 but declined marginally in the period of investigation.

The domestic industry has maintained its market share by lowering its selling price to match the dumped imports. The inventories of the domestic industry increased over the period and profits, the cash profits and the return on capital employed of the domestic industry declined significantly during the injury period.

The investigation finds that while the volume parameters of the domestic industry are not affected by the imports, the price and profitability parameters show a significant adverse impact. This implies that while the domestic industry was able to increase its market share, it was forced to compromise on its profits and reduce its prices to achieve the same. This is because imports entered the market at prices below the prices of the domestic industry.

“The price of imports has declined, despite an increase in the price of ethylene. It is, therefore, evident that while the domestic industry has not suffered an injury in terms of its volume parameters, the imports have adversely impacted the profitability of the domestic industry. Thus, the domestic industry has suffered a material injury,” said the notification.

Source: Polymerupdate