Commerce ministry recommends continuation of anti-dumping duty on import of phenol from EU

New Delhi, August 9, 2021:

The Union commerce ministry has recommended continuation of anti-dumping duty on phenol imported from European Union to protect domestic players from cheap imports.

Phenol is a basic organic chemical used in ply and pharmaceutical industries.

In a notification on July 30, 2021, the ministry’s investigation arm Directorate General of Trade Remedies (DGTR) said there is a likelihood of continuation of dumping of phenol from EU and injury to domestic players if the existing anti-dumping duties are allowed to cease.

The directorate has recommended a duty in the range of US$ 66.76 per metric tonne on phenol imported from EU.

The finance ministry takes the final decision to impose this duty. In its probe, the DGTR has concluded that there is sufficient evidence to indicate that the cessation of the duty at this stage will lead to continuation of dumping and injury to the domestic industry.

Earlier in 2016 the Central Board of Excise and Customs (CBEC) had imposed definitive anti-dumping on import of phenol from EU, Singapore, Korea RP for five years.

Deepak Phenolics Limited (DPL) and Hindustan Organics Chemical Limited (HOCL) had on September 8, 2020 filed an application requesting initiation of sunset review of antidumping duty imposed earlier and seeking continuation of duty against imports of phenol from EU and Singapore.

The applicants stated that the expiry of the measure was likely to result in continuation of dumping of the product and consequent injury to the domestic industry.

However, the applicants submitted that since Korea's injury margin is negative, they do not wish to pursue the case against Korea.

Acting on the applicants’ appeal, DGTR initiated a probe to review the need to continue imposition of anti-dumping duty on import of phenol from EU and Singapore.

Pending conclusion of the investigation, the anti-dumping duties were extended upto and inclusive of June 7, 2021 vide Notification No. 11/2021-Customs (ADD) dated March 3, 2021. Further, anti-dumping duties were extended upto and inclusive of October 31, 2021 vide Notification No 33/2021 -Customs (ADD) dated June 3, 2021.

During the probe, the authority observed that the imports of phenol in the current period of investigation were at dumped prices despite anti-dumping duty in existence. Further, dumping margin and injury margin was positive for both EU and Singapore.

“The dumping has significantly deteriorated the domestic industry's performance in respect of profits, cash profits and return on capital employed. It is also seen that these imports from EU are undercutting the prices of the domestic industry, while price undercutting on account of imports from Singapore is negative,” said DGTR in its findings.

The period of investigation (POI) for the purpose of the present review was July 1, 2019 to June 30, 2020. The injury period under investigation covered the period from 2016-17, 2017-18 and April 2018 – June 2019, and the POI.

The authority further observed that imports from Singapore declined significantly over the course of the injury period, and imports of the product from Singapore constituted less than 1 per cent of the total imports of product during the POI.

“As regards the EU, it is noted that the volume of imports has increased significantly during the period of investigation despite the existence of an anti-dumping duty. In the event of cessation of anti-dumping duty, the exports from EU to India are likely to increase,” it stated.

Hence the authority recommended imposition of definitive anti-dumping duty on the imports of phenol from EU.

As there is no likelihood of continuation or recurrence of dumping and injury on account of imports of phenol from Singapore, no anti-dumping duty is recommended against producers and exporters from Singapore, it stated.

Antidumping duty aims at removing unfair advantages gained by dumping practices, preventing the decline of the domestic industry and helping maintain availability of wider choice to the consumers of phenol.

Countries initiate anti-dumping probes to determine if the domestic industry has been hurt by a surge in below-cost imports. PharmaBiz