The Govt has re-imposed anti-dumping duty on linen fabric imported from China & Hong Kong after an elaborate investigation established entry of the fabric at a price below its normal value was hurting the domestic industry, 2 officials said.
This is the 3rd time since 2009 the Govt imposed anti-dumping duty on flax or linen fabric with more than 50 per cent flax content that originated from China & Hong Kong, the officials said requesting anonymity.
The anti-dumping investigation concerning imports of flax or linen fabric from China & Hong Kong was first initiated by the Directorate General of Trade Remedies (DGTR) in Oct 2008 & based on its recommendations the Finance Ministry had levied an anti-dumping duty on the product in Dec 2009, one of the officials said. The DGTR was earlier known as the Directorate General of Anti-dumping & Allied Duties. It is an integrated single-window agency for providing comprehensive & swift trade defence mechanism in India.
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After 5 years, the authority initiated the first sunset review investigation on this matter & again recommended the re-imposition of anti-dumping duty on imports of flax fabric from China & Hong Kong. Based on the findings, the levy was extended in Aug 2015 for another 5-year period, the official said.
After receiving feedback from the domestic textile industry, the DGTR undertook a 2nd sunset review of the matter in Dec 2019 & found continuance of dumping of flax or linen fabric from China & Hong Kong. The investigation concluded that the discontinuance of the levy would lead to a reoccurrence of dumping & hurt the domestic industry. Based on its findings, the finance ministry on Tuesday re-imposed the levy for another five-year period, he said.
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He said that “The anti-dumping duties on flax or linen fabric having flax content of more than 50% are imposed at the rates of $2.36 per meter [for Chinese imports] & $1.14 per meter [for imports from Hong Kong]
Divakar Vijayasarathy, founder & managing partner at consulting firm DVS Advisors LLP, said that the present matter is an extension of existing anti-dumping duty to protect the domestic industry from unfair Chinese onslaught.
He said, “Without adequate safeguard measures such as anti-dumping duty, the domestic industry would eventually crumble, being unable to compete with the unrealistic prices".
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“India has always had this issue with China & the unfair dumping as well contributes to furthering the trade deficit. In addition to these measures, the government should facilitate in reducing the cost of domestic production which would enable the domestic industry to compete globally & truly become Aatma Nirbhar [self-reliant],” he added.
Sandeep Agarwal, managing director of Alps Industries Limited & a member of the Trade Promotion Council of India (TPCI), said the move would hamper Indian exports.
He said that “We are sourcing linen yarns & fabrics as our raw material for home furnishing products. The anti-dumping duty might create a shortage of linen yarn/fabrics in the short-term. Foreign companies looking to source linen fabrics & garments will start looking for alternatives outside India & might even have to help develop this industry in other countries. Once developed, it will be hard for Indian weavers & garmenters to bring them back".
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