Monday, May 23 2022 | Time 00:45 Hrs(IST)
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Business Economy


Don't impose anti-dumping duty on caustic soda, industry bodies write to PMO, Finmin

New Delhi, Dec 28 (UNI) Pre-empting government move to slap anti-dumping duty on caustic soda originating or exported from Japan, Iran, Qatar and Oman, sectoral industry bodies have urged the government to hold the decision.
The associations have argued that anti-dumping duty on the key item would hurt the aluminium industry, the key consumer of caustic soda.
"In view of the existing tariff and non-tariff barriers on caustic soda imports already in place, and in the best interest of Indian aluminium industry, we earnestly request for not imposing any anti-dumping duty on import of caustic soda originating in or exported from our friendly nations of Japan, Iran, Qatar and Oman," Aluminium Association of India (AAI) has written to Finance Ministry and Prime Minister's Office (PMO).
Another trade body Federation of Indian Mineral Industries (FIMI) has also made similar request stating that it has learnt from its members that Directorate General of Trade Remedies (DGTR) has recommended for anti-dumping investigations concerning imports of caustic soda from certain countries.
The government generally imposes anti-dumping duty on various items to promote local industry.
The industry bodies in their communication to Finance Ministry and PMO have noted that majority of India’s domestic production of caustic soda (Non-Captive) is in the Western region of the country, mainly in Gujarat, Maharashtra and Rajasthan whereas all major alumina producers are located in Eastern region of the country (Odisha, Andhra Pradesh, Jharkhand, Karnataka etc).
"This creates a huge logistics challenge resulting in high freight costs for transportation from western to eastern regions along with unavailability of sufficient rakes and network congestions," AAI has said.
They have further mentioned that transportation through road mode is not feasible over such long distances.
"As a result, the domestic suppliers have concentrated their supplies in the geographies near to their plant location. Moreover, the domestic caustic industry is not able to cater to the bulk requirement of aluminium industry requiring large shipment size of 8000 DMT to 10000 DMT which domestic suppliers are not able to supply. Thus, the domestic consumers are left with no other option but to import caustic soda to meet domestic requirements," the industry body has said.
The two industry bodies have also said that caustic soda imports in India are already restricted through various tariff and non-tariff barriers.
It has been claimed that post imposition of mandatory Bureau of Indian Standard (BIS) license for caustic soda imports, almost 95% of foreign caustic soda producers are already eliminated because they have not acquired the requisite BIS license for exporting caustic soda to India.
"The BIS Standards are therefore a significant non-tariff trade barrier in place to safeguard the domestic Caustic Soda industry and reduce imports of caustic soda based on the quality standards," AAI has said.
FIMI has said that with revival of economy back on track any further restriction on import of caustic soda will hamper the economic viability of Indian aluminium industry.
"The burden of any additional tariffs will be detrimental for the sustainability and cost competitiveness of aluminium industry as unlike other industries it cannot pass through the burden of escalated cost to end consumer as the global aluminium prices are governed by London Metal Exchange," stated FIMI.

Caustic soda lye is a major raw material for alumina production which is further used for production of aluminium metal. Caustic soda contributes to around 20% of alumina production cost.
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