India Probes Chemical Imports from South Korea

New Delhi, Oct 14 (PTI) India has initiated a probe to ascertain if a significant spurt in imports of a chemical, used in the plastic industry, from South Korea is impacting the domestic producers.

A complaint regarding this has been filed under the pact by KLJ Plasticizers Ltd, which has sought complete withdrawal of the duty concessions on the imports of 'Non-phthalate Plasticizers in the form of Dioctyl Terephthalate (DOTP) and Diethylhexyl Cyclohexane (DEHCH)' from Korea.

The application was filed under the bilateral safeguard measures rules of the India-Korea free trade agreement. Under the pact, India has given customs duty concessions on this product. The pact was implemented in 2010.

The applicant has claimed that the imports have increased in both absolute and relative terms due to the phased reduction and elimination of the duty.

In a trade pact, two countries either significantly reduce or eliminate import duties on the maximum number of goods traded between them.

According to a notification of the commerce ministry's arm Directorate General of Trade Remedies (DGTR), the applicant has stated that an increase in imports has caused "serious injury" to the domestic industry.

The rate of increase in imports is higher than the rate of increase in demand.

"Having determined that there is sufficient prima facie evidence to justify initiation of the safeguard investigation, the authority considers it appropriate to initiate the investigation," it said.

In the probe, the DGTR would determine whether the imports from Kore? constitute increased imports due to the phased reduction and elimination of customs duty and whether the increased imports have caused or are threatening to cause serious injury to the domestic industry.

The finance ministry will take the final call to impose the duty. The duty helps in providing a level playing field to the domestic industry in terms of the pricing of the chemical in the domestic market.