India has started investigation on imports of cheap (subsidized) paperboard coming from China and Indonesia. This step has been taken after the complaint of Indian Paper Manufacturers Association, which said that domestic companies are suffering losses due to cheap imports.
DGTR started formal investigation
The Directorate General of Trade Remedies (DGTR), working under the Commerce Ministry, has started investigation in this matter. The agency says that initial investigations have indicated that companies in China and Indonesia are getting government subsidies, due to which they are able to sell products at lower prices.
Market balance is deteriorating due to subsidies
The domestic industry alleges that companies from these countries get loans, tax exemptions, grants and other facilities. For this reason, they are affecting the profits and market share of Indian companies by sending cheap goods to India.
Possibility of anti-subsidy duty
If the investigation proves that Indian industry is suffering losses due to subsidies, then DGTR can recommend the government to impose countervailing (anti-subsidy) duty. This is expected to provide relief to domestic companies.
Important role in packaging sector
Multi-layer paperboard is extensively used in packaging of pharmaceutical, FMCG, food and beverages, electronics and cosmetics. Apart from this, it is also used in brochures, book covers and publishing industry.
Keep an eye on steel and aluminum too
Along with this, DGTR has also started the review (sunset review) of anti-dumping duty imposed on some steel and aluminum products coming from China. This investigation will assess whether cheap imports can increase again if duty is removed.
demand of big companies
Hindalco Industries has sought review on aluminum products and Jindal Saw, Kirloskar Ferrous and Maharashtra Seamless have sought review on steel products. They say that dumping is still going on and it is causing loss to the domestic industry.
what will happen next
Now DGTR will decide what is the impact of subsidy and dumping. On the basis of this, a decision can be taken to increase duty or impose new duty, so that Indian industry can get protection.