India probes alleged increase in imports of PVC resin from Japan

India has initiated a probe into an alleged increase in imports of a certain type of PVC resin, used in various sectors including construction and medical devices, from Japan following complaints by domestic firms.

According to a notification of the Directorate General of Trade Remedies (DGTR), an application was filed by DCW, DCM Shriram and Chemplast Cuddalore Vinyls for initiation of a probe into imports of 'PVC (polyvinyl chloride) Suspension Grade Resin' from Japan.

The application was filed under the India-Japan FTA, officially dubbed as Comprehensive Economic Partnership Agreement, it said.

Under a free trade agreement (FTA), two countries reduce or eliminate customs/import duties on the maximum number of goods traded between them.

The applicants have requested for immediate imposition of bilateral safeguard measures in view of the significant increase in imports of the product.

They have also claimed that the market share of the domestic industry has declined whereas market share of the imported resin has increased.

"After determining that there is prima facie evidence to justify initiation of the safeguard investigation, the Director-General considers appropriate to initiate the investigation in order to determine whether the imports of the product from Japan constitute increased imports and whether the increased imports have caused or are threatening to cause serious injury to the domestic industry," it said.

The period considered for the investigation is April 2016 to March 2020.

"It is noted that the increase in imports of the product is significant during the period of investigation and is continuing the increasing trend witnessed post the commencement of the tariff reduction with effect from August 2011," it added.

If it is established in the probe that the increase in imports has impacted domestic players, the directorate would recommend imposition of safeguard duty on the imports. The finance ministry will take the final call to impose the duty.

The product is used in building and construction, automotive, and medical industries.

The safeguard duty duty is imposed as a part of trade remedy measures and it is permitted under the global trade rules of the World Trade Organization. Both India and Japan are members of this organisation.

The duty helps in providing a level-paying field to the domestic industry in terms of pricing of a product in the domestic market. Pricing is a key component after quality of products in any market.

The bilateral trade between India and Japan fell to USD 16.96 billion in 2019-20 from USD 17.6 billion in the previous fiscal year. Trade balance is highly in favour of Japan.