Introduction:

The Ministry of Finance imposed anti-dumping duty on import of Sodium Chlorate from Canada, People’s Republic of China and European Union vide Notification[1] No. 53/2017-Customs (ADD), dated November 2, 2017, wherein it stated that there is dumping of Sodium Chlorate in India and import of it from these countries is suppressing the prices of the domestic industry.

Background:

M/s Gujarat Alkalies and Chemicals Limited and Teamec Chlorates Limited filed an application before the Designated Authority in accordance with the Customs Tariff Act, 1975, for initiation of anti-dumping investigation concerning imports of “Sodium Chlorate” originating in or exported from Canada, China and EU.

Evidence was provided by both the petitioners regarding material injury as a result of the alleged dumping in terms of increase in imports in absolute terms, deterioration in profitability and return on capital employed. The petitioner has also claimed adverse price effects evidenced by price depression and suppression.

In furtherance of sufficient prima facie evidence to the same, an investigation was initiated[2] on May 12, 2016 by the Indian Directorate General of Anti-dumping & Allied Duties, Ministry of Commerce and Industry which recommended the Ministry of Finance to impose this anti-dumping duty in order to remove injury to the domestic industry. On the basis of this recommendation, the Ministry of Finance has now imposed the anti-dumping duty.

The effects of imposition:

It can be said that this duty is intended to effectively protect the domestic industry of India from cheap dumped imports. The Ministry also mentioned in the notification that the price injury to domestic industry has been caused by dumped imports, with a significant positive injury margin due to price suppression. Further, the imposition of these duties balances out the price injury to domestic market.

Time for a Chinese Anti-dumping duty? :

Fair-trading practices need to be ensured in order to safeguard domestic producers so that they can improve and expand and give competition to such foreign exporters one day. Imposition of anti-dumping measures on products imported from Canada and EU is a rare case but it is not the first time India has imposed an anti-dumping duty on products imported from China.

India has already imposed anti-dumping duties on other chemicals, fabrics and steel imported from China. China’s low manufacturing cost of products can arguably intimidate any domestic producer. Anti-dumping duties are imposed in order to ensure a level-playing ground for domestic industry but there should not always be a significant positive injury margin to domestic industry due to price suppression in order to impose such a duty. Legislature can make a move and can come up with an anti-dumping duty against Chinese products which are significantly cheaper than average price of domestic products.

Not only India but even other countries, especially neighboring countries should at least consider imposition of such a tax against Chinese products to encourage production from domestic industry. This could be a massive incentive for domestic industry. It can, however, be said that if such a duty is imposed, it should exclude from its purview medical instruments and essential goods of public utility as low manufacturing costs of China of such products can actually benefit the country in need.