Finance ministry may impose anti-dumping duty on import of vitamin C from China

Mumbai, September 8, 2021 :

The Union finance ministry is likely to impose an anti-dumping duty on vitamin C imported from China to provide a level playing field for domestic industry vis-a-vis foreign manufacturers and exporters.

Vitamin-C is primarily used by the pharmaceutical's companies for production of various medicines. vitamin C is one of the basic and preliminary medicines against Covid as prescribed by Indian Council for Medical Research (ICMR) and is widely used in Covid.

Vitamin C is an essential nutrient involved in the repair of tissue and the enzymatic production of certain neurotransmitters found in various foods. It is required for the functioning of several enzymes and is important for immune system function. It also functions as an antioxidant.

India and China are the only manufacturers of vitamin C bulk rug. Other countries in the world purchase vitamin C bulk drug from India and China and sell the formulation.

The Directorate General of Trade Remedies (DGTR), an investigation arm of Union ministry of commerce and industry, had initiated anti-dumping probe into import of vitamin C API from China on September 4, 2020 following a complaint filed by Bajaj Healthcare which has a 46 per cent share in total domestic production of vitamin C.

The complaint was supported by three other producers of vitamin C API in India-- Amoli Organics Pvt Ltd, Reckon Diagnostics Pvt. Ltd. and SR Biochem.

The price ceiling imposed under the Drugs (Price Control) Order, 2013 (DPCO) is for formulation and not on API or bulk drugs.

The DGTR conducted an anti-dumping investigation from April 2016 to March 2020. Since 1998 the authority has imposed an anti-dumping duty on import of vitamin C. The product was attracting antidumping duty US$ 3.74 per kg imposed via customs notification no. 38/2015-Customs (ADD) dated August 6th, 2015 which was in force till August 5, 2020.

Despite imposition of antidumping duty, the import of vitamin C from China has increased over the years. A total of 783 metric tonnes of vitamin C have been imported from China in 2016-17 followed by 1288 metric tonnes in 2017-18, 1171 metric tonnes in 2018-19 and 868 metric tonnes during the period of investigation i.e. April 2019 March 2020.

China has a near monopoly on world vitamin C production. The Chinese manufacturer gets 13 per cent tax back from the Chinese government when they export vitamin C.

The DGTR in its preliminary findings recently concluded that the production and capacity utilization of the domestic industry increased, however, the domestic sales have declined on account of import of vitamin C from China.

The authority noted that though the domestic industry's inventory level has increased, the performance of the industry has significantly deteriorated in respect of profits, cash profits and return on capital employed due to the Chinese import.

With an aim to protect domestic industry, DGTR has recommended imposition of anti-dumping duty ranging from US$ 3.20 per kg to US$ 3.55 per kg in its preliminary findings. While DGTR recommends the duty, the finance ministry takes the final call to impose the same.

The imposition of anti-dumping duty is permissible under the World Trade Organization (WTO) regime. India and China are members of this Geneva-based organisation, which deals with global trade norms. PharmaBiz