India Imposes Anti-Dumping Duty on Chinese Chemicals

In what can be termed as a strategic exercise to save the domestic industry and rectify a rising trade imbalance, India has declared anti-dumping duties on four of its major chemical imports that are mostly of Chinese origin. The move which is being implemented by a number of official announcements shows that the government is seeking to crack down on unfair trade which is posing a challenge to domestic production.

Central Board of Indirect Taxes and Customs (CBIC), taking the suggestion of Directorate General of Trade Remedies (DGTR) has imposed duties on PEDA, Acetonitrile, Vitamin A Palmitate and Insoluble Sulphur. The chemicals are abundantly implemented not only in pharmaceutical industries but also in agriculture and tyre manufactories and the new order is likely to give protection greatly to Indian manufacturers.

The recent trade protection by India is just at a time when there is a lot of worry with respect to the increased prevalence of Chinese imports on key industrial activities. One of the major reasons that the government has given regarding this move is that of predatory pricing by foreign manufacturers. These obligations are meant to make competition even among the domestic firms in light of the dumping of goods by the foreign firms below their normal value.

The move also falls in line with the larger agenda of India to increase its local production capacities as a part of its ‘Make in India’ campaign and lessen its dependence on China, especially when the latter country has achieved such an immense bilateral trade imbalance ratio. India registered a trade gap of 99.2 billion with China in the financial year 202425 and this was enhanced by the fall in Indian exports to China by 14.5 percent.

Breakdown of New Anti-Dumping Duties

The duties that Kalvikhugsi will be imposing differ depending on the product and country of origin indicating a subtle position not a general move.

PEDA (used in herbicides)
Duty Range: $1,305.6 – $2,017.9 per tonne
Country: China
Acetonitrile (used in pharmaceuticals)
Duty: Up to $481 per tonne
Countries: China, Russia, Taiwan
Vitamin A Palmitate (used in food and supplements)
Duty: Up to $20.87 per kg
Countries: China, EU, Switzerland
Insoluble Sulphur (used in tyre manufacturing)
Duty: Up to $358 per tonne
Countries: China, Japan

These obligations will be in place within five years which will provide a stable playing field in which domestic manufacturers have the time to shift and compete.

Legal Framework and WTO Compliance

Anti-dumping is a worldwide acceptable practice through World Trade Organization (WTO) which both India and China belong to. It is the right of countries to provide such duties, through elaborate investigations that prove that local industries are being hurt through unfair trade practices.

In India, there are investigations by the DGTR which reviews the data of local manufacturers and importers in finding the levels of injury margins, and the accounting of dumping. The DGTR after the thorough investigations have made recommendations to the CBIC, an act that formalized the levying of duties.

Strategic Importance of Targeted Chemicals

The four targeted chemicals are of great importance to the industries in which they are used:

PEDA is crucial in agrochemicals, particularly in the production of herbicides.
Acetonitrile serves as a solvent in pharmaceutical synthesis and research labs.
Vitamin A Palmitate is a dietary supplement and food fortification agent.
Insoluble Sulphur enhances the quality and durability of tyres, essential for the automotive sector.

By paying special attention to these key inputs, the government is sending out the message that it is willing not only to preserve chemical manufactures, but also the downstream industries which rely on them.

It is how India has positioned its trade world, nimble, aggressive, industry-focused, and this is the latest compliance as well. Instead of wide bans, New Delhi is setting the targeted reaction that needs to be balanced around WTO commitments and national interest. It also conveys a solid message to trading partners regarding India ‘s readiness to resort to trade defense measures when it deems it appropriate.

Analysts consider this as a step towards the bigger realigning nature of Indians in terms of economic intercourse with China, which would be self-sufficient, manufacture-resilient as well as reasonable market conditions.