In a major relief for thousands of domestic downstream industry players, the government has revoked six-year-old anti-dumping duties (ADD) on “flexible PVC (polyvinyl chloride) films” originating in China.

A notification issued by the Ministry of Finance on January 24, 2022 reads: “The Central Government revokes the anti-dumping duty imposed on ‘PVC Flexible Films’, originating in or exported from China and imported into India and hereby revokes the notification dated August 8, 2016.”

Previously, the Directorate General of Trade Remedies (DGTR), the investigative arm of the Department of Commerce, recommended the removal of ADD on PVC flex films imported from China. In its findings, the DGTR stated: “Even if there is continued dumping of flexible PVC film from China, the likelihood of continuation/recurrence of injury to the domestic industry should the duty be repealed could not be conclusively established due to a lack of sufficient independent corroborating evidence.

“For the past few years, we have asked the government to cancel the ADD levied on flexible PVC films imported from China. Due to the ADD tax, the availability of flexible PVC films had declined sharply as importers were unable to fill its China-created supply gap with other countries. India also imports a huge amount of PVD flexible resins from Southeast Asia. Now, the availability of flex PVC films will ease and suppliers who used to artificially raise prices by artificially invoking supply constraints, will no longer be able to do so. Its supply will be constant, which will help us to develop our long-term business plans,” said Rajesh Khandelwal, Director of Ankit Irrigation Pvt Ltd, a producer of PVC pipes and other products for various applications based in Jaipur.

Through a notification dated August 8, 2016, the Indian government had levied an ADD on the import of flexible PVC films from China as part of its continued dumping at a price significantly below the market price in force in India. In addition, the government considered the dumping margin and the injury margin to be positive and significant. Hence, there was a need to limit cheap PVC flexible films imported to India, especially from China.

The ADD was initially imposed for five years but was extended in August 2021, until January 31, 2022.

The government had levied an ADD of between US$34 and US$538 per ton of flexible PVC films, according to producers and exporters in China. PVC flexible film exports from Heytex Technical Textiles (Zhangjiag ang) Co. Ltd attracted an ADD of $34 per ton, but its import from other producers and exporters in China accompanied an ADD of up to US$538 per ton .

Products made of rigid PVC films such as cotton or canvas tarpaulins, PVC films, self-adhesive vinyls, one-way vision films or perforated window films, colored vinyls and fabric banners or fabrics. mesh were exempt from the ADD levy.

PVC flexible films are used to manufacture packaging materials in rigid and flexible forms. While flexible films can be used to create tamper evident seals for products such as consumer goods, food and beverage, and pharmaceuticals; rigid films are suitable for hulls.

Surendra Sharda, Director of Accura Polyplast Pvt Ltd, an Ahmedabad-based manufacturer of PVC pipes and a host of other products, said: “Resins, flexible films and all other PVC products will now become less Dear. PVC prices had risen significantly through October 2021 due to a sharp escalation in post-Covid (coronavirus pandemic) pent-up demand, amid supply disruptions over logistics issues, but have eased thereafter due to weak demand.

Due to this ADD, the cost of raw materials and finished products had risen sharply in the past few months. As a result, not only packaging materials, but also finished products made of PVC resins and films had become more expensive.

Its impact can be gauged by the fact that PVC processors in Gujarat have voluntarily declared not to participate in government project tenders due to authorities’ decision not to increase the minimum floor price based on the increase in raw materials.

“Now revoking the ADD would help these players participate in government tenders even if the floor price is not increased. Raw material prices will fall, which will ultimately reduce the effective cost of producing finished goods and provide producers with a workable profit margin,” Sharda said.

International trade standards allow a country to impose an ADD on a product or set of products when imported from one or more countries if the landed cost of the product(s) in question turns out to be significantly cheaper than the prevailing cost and therefore these imports cause injury to the domestic industry.

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