Centre urged not to impose duty on caustic soda imports from 'friendly countries'

Federation of Indian Mineral Industries (FIMI) and Aluminium Association of India have urged the Centre not to impose anti-dumping duty on the import of caustic soda originating in or exported from "friendly nations" of Japan, Iran, Qatar and Oman.

Both the associations, in their multiple memorandums to Union Finance Minister Nirmala Sitharaman, requested that additional restrictions on caustic soda, a major raw material for textile, soaps and detergent, alumina production could hamper economic viability and delay the ongoing revival of economic activity, besides disrupting the entire supply chain of SMEs

Anti-dumping duty recommended on friendly nations could impact bilateral relations and invite retaliatory tariffs on Indian exports, MSMEs and end-consumers may be affected by higher input costs of essential commodities, the memorandum stated. The associations also submitted their memorandum to the Union Finance Secretary and Prime Minister's Office.

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Consumers industries are forced to rely on imports of caustic soda as the domestic caustic industry is unable to cater to the bulk requirements for some sectors, which range in shipment sizes of 8,000 metric tonnes (MTs) to 10,000 MT. They are also dealing with high tariff barriers through the presence of an inverted duty structure, with caustic soda attracting a 7.5 per cent basic custom duty while alumina attracts a 5 per cent import duty, the statement said.

"At this juncture, with revival of economy and post-pandemic industrial activity back on track, any further restriction on one of the major raw materials for aluminium will hamper the economic viability of Indian aluminium industry to the extent of closure of operations thereby affecting the overall economy. The burden of any additional tariffs will be detrimental for the sustainability and cost competitiveness of the aluminium industry as, unlike other industries, it cannot pass through the burden of escalated cost to end consumers as the global aluminium prices are governed by London Metal Exchange,” the memorandum stated.

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