The government of India has abolished anti-dumping duty on a chemical called Purified Terephthalic Acid (PTA). However, there will be no tariff benefit as the government has also added PTA to the negative list of goods. PTA is an important raw material which is used in making various products, including polyester fabrics.
PTA makes up for around 70-80% of a polyester product and is, therefore, important to those involved in the manufacture of man-made fabrics or their components. The latest move has come after persistent demand from the manufacturing and textile industry to source PTA at an affordable rate.
Dumping refers to the sale by an exporter in one country of goods having been produced in another country for export to a third country at less than their normal value. Dumping results in overproduction and hence lower prices, a disadvantage for the importer. Anti-dumping measures are generally taken by countries against unfairly priced imports that injure their domestic industry.
Anti-dumping is a measure to rectify the situation arising out of the dumping of goods and its trade distortive effect. The use of anti-dumping measure as an instrument of fair competition is permitted by the World Trade Organisation (WTO).
The Directorate General of Trade Remedies is the apex national authority, under the Ministry of Commerce and Industry for administering all trade remedial measures including anti-dumping, countervailing duties and safeguard measures.
The Directorate General of Trade Remedies (DGTR) acts as an advocate for the domestic industry and exporters by helping them secure a level playing field in the international arena. It provides trade defence support to the domestic industry and exporters in dealing with increasing instances of trade remedy investigations instituted against them by other countries.
Mono Ethylene Glycol (MEG) is a raw material used in the manufacture of polyester and is under anti-dumping duty investigation initiated by the DGTR, recently. MEG is obtained by refining ethylene glycol, which is obtained from the petrochemical industry.
Monoethylene glycol (MEG), used in numerous products including paint and coatings, solvents, adhesives and detergents are the subject of dumping complaints before the Directorate General of Anti-Dumping and Allied Duties (DGAD).
Textile companies have approached DGTR against the imposition of anti-dumping duties on MEG as the step would lead to the same situation that developed after imposing anti-dumping duty on PTA.