The Directorate General of Trade Remedies (DGTR), under the Department of Commerce, has recommended to increase the rate of customs duty on Polybutadiene Rubber, excluding its titanium and lithium grades, originating in Korea for two years in order to safeguard the domestic industry from significant jump in import of the product. 

 

For the first year, the DGTR has recommended to “increase the rate of customs duty to the level of 100 per cent of Most Favoured Nation applied rate of customs duty” and 75 per cent in the second year, it added. The probe was carried out under India-Korea Comprehensive Economic Partnership Agreement.

 

Reliance Industries Ltd had filed the application before the directorate in accordance with a free trade agreement (FTA) between India and South Korea for initiation of bilateral safeguard investigations concerning increased imports of this rubber. The probe was started in November last year.

 

“After examining the above, it is concluded that the imports of the product from Korea have increased and constitute "increased imports" within the meaning of the Rules and Korea-India CEPA. The increased imports have caused serious injury to the domestic industry. There exists a causal link between the increased imports of the originating good due to the reduction or elimination of custom duty under the Korea-lndia CEPA and serious injury to the domestic industry,” the DGTR said in its notification dated October 22, 2020.

 

The DGTR says in its finding that ‘It is seen that whereas earlier it were import price from rest of the world which were lower than or equal to the import price from Korea, from 2017-18, when the Korean exports received full duty concession benefits, it was Korean prices which were lower than the import price from rest of the world. Further, the landed price of imports from Korea RP has been lower than the selling price of the domestic industry, thus establishing that the domestic industry and other suppliers in the market have been forced to benchmark its prices with the import prices from Korea RP.

 

The Director General notes that none of the interested parties have provided any verifiable evidence and information on how invoking present bilateral measures will lead to unbearable adverse impact. The interested parties have only made assertions that the product is an intermediate product and the imposition of duties will have an impact on the user industry. But these parties have not presented any relevant data. Against this, the domestic industry has worked out the impact of imposition of proposed safeguard measures on the prices of tyres, it is seen that the impact on the final prices of tyres is quite insignificant, the notifications notes.