China's anti-dumping duty surprises exporters

India's chemical sector exporters have been facing anti-dumping measures in several countries, with the latest being China.

The Asian superpower has slapped "temporary" anti-dumping duty ranging from 14 to 66 per cent against import of purified anhydride acid from India, South Korea and Japan for inflicting "substantial damage" to Chinese businesses in this sector.

Indian chemical manufacturers and exporters have been taken by surprise at the development. The Indian Chemicals Manufacturers Association has sought further details from the Indian embassy based in Beijing.

"It is still unclear about the exact product that China has levied anti-dumping duty on. Many companies manufacture anhydrous acid based products, but there are few who really export anhydride acid, directly," a chemical industry source said. "India exports derivatives of anhydrous acid or sub-products of it," he added.

While there have been lots of cases where Indian chemical companies have had to answer to allegations or face investigations for dumping in countries like China, it has now become a norm for countries to initiate anti-dumping measures to counter competitive products of Indian origin, industry sources said.

The Ministry of Foreign Trade and Economic Cooperation of China had said in a statement that investigations had shown substantial damage to local industries caused by the dumping of purified anhydride acid imported from three countries.

The ministry's initial judgement was based on anti-dumping investigation initiated on March 6 last year by relevant government departments.

It directed importers of purified anhydride acid made in these countries to pay cash deposits to Chinese customs. The exact amount of the cash deposit was, however, not mentioned.

The product is listed under "29173500" in the tariffs of the general administration of Chinese customs. MOFTEC also said final judgement on the issue would be made on the basis of further checks by the ministry and the State Economic and Trade Commission.

Purified anhydride acid is an intermediate product used in the production of vinyl acetate monomer, purified tetraphthalic acid and acetic anhydride. This is the second Indian item to be slapped with anti-dumping investigations and tariff after Chinese silk.

Some of the chemical manufacturers were of the view that it could be an attempt to thwart Indian exports in retaliation of the fact that India has recently initiated anti-dumping probe on imports of sodium hydroxide, commonly known as caustic soda, from Chinese Taipei, Indonesia and the EU (except France).

The Alkali Manufacturers' Association of India had filed the petition seeking anti-dumping probe on caustic soda imports from Chinese Taipei, Indonesia and the EU (except France).

Total imports of caustic soda during 2001-02 stood at 93,291 tonnes. The authority has also recommended a definitive anti-dumping duty on all imports of pentaerythritol from Canada, Japan and Taiwan.