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The Directorate General of Trade Remedies (DGTR) under the Ministry of Commerce and Industry on Friday recommended the imposition of an anti-dumping duty on aluminium foils imported from China, after observing that Chinese imports had captured 30 per cent of the Indian market despite sufficient domestic capacity.
This follows a request for an inquiry from Hindalco, one of India’s largest aluminium manufacturing companies, on the grounds of injury to domestic companies. Other applicants included Shyam Sel & Power Ltd, Venkateshwara Electrocast Pvt. Ltd, and Ravi Raj Foils Ltd.
Anti-dumping investigations are conducted by countries to determine whether domestic industries have been harmed due to a surge in cheap imports. The Ministry of Finance makes the final decision on whether to impose duties.
The DGTR stated that imports of “aluminium foil up to 80 microns, excluding aluminium foil below 5.5 microns for non-capacitor applications,” are undercutting the prices of the domestic industry. This price undercutting has forced the domestic industry to reduce its selling price below the cost of production, the DGTR said.
The foil is used as a packaging material for the conservation and preservation of edible and food products. The recommended duty ranges between $619 per tonne and $873 per tonne.
“The combined capacities and production of these domestic producers during the period of investigation (POI) were 1,32,140 MT and 69,572 MT, respectively, against known Indian capacity and production of 2,89,735 MT and 1,26,495 MT. These companies thus collectively command about 45 per cent of capacity and 54 per cent of production in the POI,” the order dated 30 August read.
Notably, other companies, in their views submissions to the DGTR, warned against the “creation of a monopoly”.
“If duties are imposed, it will adversely affect downstream producers and lead to an inability to source the subject goods with good product quality and lead times, impacting the ability of downstream producers to meet customer demands. Due care should be taken to prevent the creation of a monopoly,” the industries’ submission to the DGTR stated.
The industry warned that an anti-dumping duty would increase the cost of downstream finished goods, making the Indian downstream industry unviable. Moreover, imports of finished goods from other countries would increase, causing injury to the flexible packaging industry in India.
Despite several efforts to curb imports from China, goods are increasingly making their way from the neighbouring country. Imports from China have already crossed $60 billion during the first seven months of 2024, which is 10 per cent higher than the $55 billion recorded during the same period last year. Imports from China in FY24 exceeded $100 billion.
