The government has re-imposed anti-dumping duty on linen fabric imported from China and Hong Kong after an elaborate investigation established entry of the fabric at a price below its normal value was hurting the domestic industry, two officials said.
This is the third time since 2009 the government imposed anti-dumping duty on flax or linen fabric with more than 50% flax content that originated from China and Hong Kong, the officials said requesting anonymity.
The anti-dumping investigation concerning imports of flax or linen fabric from China and Hong Kong was first initiated by the Directorate General of Trade Remedies (DGTR) in October 2008 and based on its recommendations the finance ministry had levied an anti-dumping duty on the product in December 2009, one of the officials said. The DGTR was earlier known as the Directorate General of Anti-dumping and Allied Duties. It is an integrated single-window agency for providing comprehensive and swift trade defence mechanism in India.
After five years, the authority initiated the first sunset review investigation on this matter and again recommended the re-imposition of anti-dumping duty on imports of flax fabric from China and Hong Kong. Based on the findings, the levy was extended in August 2015 for another five-year period, the official said.
After receiving feedback from the domestic textile industry, the DGTR undertook a second sunset review of the matter in December 2019 and found continuance of dumping of flax or linen fabric from China and Hong Kong. The investigation concluded that the discontinuance of the levy would lead to a reoccurrence of dumping and hurt the domestic industry. Based on its findings, the finance ministry on Tuesday re-imposed the levy for another five-year period, he said.
“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] and $1.14 per meter [for imports from Hong Kong],” he said.
Divakar Vijayasarathy, founder and 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. “Without adequate safeguard measures such as anti-dumping duty, the domestic industry would eventually crumble, being unable to compete with the unrealistic prices,” he said.
“India has always had this issue with China and 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 and truly become Aatma Nirbhar [self-reliant],” he added.
Sandeep Agarwal, managing director of Alps Industries Limited and a member of the Trade Promotion Council of India (TPCI), said the move would hamper Indian exports. “We are sourcing linen yarns and 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 and garments will start looking for alternatives outside India and might even have to help develop this industry in other countries. Once developed, it will be hard for Indian weavers and garmenters to bring them back,” he said.
