India may impose anti-dumping duty on a Chinese chemical

India may impose anti-dumping duty on imports of a certain type of industrial pigment, used as coating material to give shining effect, as the commerce ministry has initiated a probe for alleged dumping of the product from China.

The probe is initiated after a complaint by domestic manufacturer Sudarshan Chemical Industries, which claimed that it is the sole producer of 'natural mica based pearl industrial pigments excluding cosmetic grade' in India.

The company has filed an application before the ministry's Directorate General of Trade Remedies (DGTR) for initiation of the anti-dumping investigations on imports of the product from China.

The manufacturer has alleged that due to dumped imports from the neighbouring country, it is being impacted.

DGTR in a notification has said that on the basis of the prima facie evidence submitted by the domestic firm, "the authority, hereby, initiates an investigation to determine the existence, degree and effect of any alleged dumping" of the product from China.

In its probe, if the directorate would concluded that there is a dumping of the product, it would recommend imposition of the duty. The revenue department takes the final decision to impose the levy.

In international trade parlance, dumping happens when a country or a firm exports an item at a price lower than the price in its domestic market.

Dumping impacts price of that product in the importing country, hitting margins and profits of manufacturing firms.

According to global trade norms, a country is allowed to impose tariffs on such dumped products to provide a level-playing field to domestic manufacturers. The duty is imposed only after a thorough investigation by a quasi-judicial body, such as DGTR, in India.

Imposition of anti-dumping duty is permissible under the World Trade Organisation (WTO) regime. India and China are members of this Geneva-based organisation, which deals with global trade norms.

The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a-vis foreign producers and exporters.