The recent imposition of anti-dumping duty on caustic soda imports from China and South Korea may lead to an increase in the price of the product in the Indian domestic market, feel some experts.
Following a petition filed by Alkali Manufacturers’ Association of India, the government in June this year imposed anti-dumping duty on caustic soda, a chemical used in textile processing and dyeing. The anti-dumping duty ranges from ‘nil’ to $ 48.39 per dry tonne depending on the producer and country of export (China or South Korea).
“With the levy of anti-dumping duty on caustic soda, the local industries will benefit immediately. But now, the local producers will hike selling prices as much as the import duties,” Jim Rogers, chairman of Rogers Holding Ltd and author of ‘Street Smarts – Adventures on the Road and in the Markets’ told Fibre2Fashion.com
On being asked about the scenario of demand for caustic soda in India being higher than its supply, he said that the local manufactures will eventually add supply. But in the meantime, the excess demand will be met by higher-priced imports, and all consumers will have to suffer higher prices.
Opposing the levy of anti-dumping duty, Manikam Ramaswami, chairman and managing director of Loyal Textiles commented, “In my opinion, we should not have anti-dumping duties on any product that is made by only a handful of manufacturers, as it leads to cartelisation and increased prices.”
“If there is any genuine dumping and if more than 25 per cent of the country’s requirement is coming from imports (to an extent dumping happens), the few domestic manufacturers who make that product may be given direct subsidies based on sales output,” he suggested.
India has an estimated annual caustic soda manufacturing capacity of three million tonne. It imported 550,000 tonne caustic soda in 2014-15 compared to 400,000 tonne in 2013-14. (MCJ)