DGTR recommends anti dumping duty on aluminum foils imported from China

Highlights:

• In a significant move to safeguard the domestic aluminium industry, the Directorate General of Trade Remedies (DGTR) under the Ministry of Commerce and Industry has recommended the imposition of an anti-dumping duty on aluminium foils imported from China.
• This recommendation comes after an investigation revealed that Chinese imports have captured 30% of the Indian market, despite the presence of sufficient domestic production capacity.
• The inquiry was initiated following a request from Hindalco, one of India’s leading aluminium manufacturers, along with other key players such as Shyam Sel & Power Ltd, Venkateshwara Electrocast Pvt. Ltd, and Ravi Raj Foils Ltd.
• These companies argued that the surge in cheap Chinese imports was causing significant injury to the domestic industry.
• Understanding Anti-Dumping Investigations: Anti-dumping investigations are a critical tool used by countries to determine whether their domestic industries are being harmed by a flood of cheap imports.
• These investigations assess whether the imports are being sold at a price lower than their normal value, thereby undercutting the prices of domestic products.
• In India, while the DGTR conducts the investigation, the final decision to impose duties rests with the Ministry of Finance.
• Details of the DGTR’s Findings: The DGTR’s investigation focused on aluminium foil with a thickness of up to 80 microns, excluding foil below 5.5 microns used for non-capacitor applications.
• The findings revealed that the influx of these Chinese aluminium foils was severely undercutting the prices of the domestic industry, forcing Indian producers to sell at prices below their cost of production.
• The DGTR has recommended a duty ranging from $619 to $873 per tonne on these imports.
• According to the DGTR, the combined capacities and production of the domestic producers during the period of investigation were 1,32,140 metric tonnes (MT) and 69,572 MT, respectively.
• This accounts for approximately 45% of the total capacity and 54% of the total production in India during the investigation period.
• Concerns from the Industry: However, the recommendation has not been without controversy. Several companies have warned that imposing such duties could lead to the creation of a monopoly in the aluminium foil market.
• They argue that the duty might increase the cost of downstream finished goods, making the Indian downstream industry uncompetitive.
• Furthermore, there are concerns that this move could lead to a rise in imports of finished goods from other countries, which would harm the flexible packaging industry in India.
• Wider Trade Context: The recommendation comes amidst a broader context of increasing imports from China, which have surged despite various efforts to curb them.
• In the first seven months of 2024 alone, imports from China have crossed $60 billion, marking a 10% increase from the same period last year.
• For the fiscal year 2023-24, imports from China exceeded $100 billion, highlighting the growing trade reliance on the neighboring country.

Prelims Takeaways:

• DGTR