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India slaps safeguard duties on Chinese aluminum, soda ash

Post Time:Mar 18,2009Classify:Industry NewsView:394

Late last week, the Indian commerce ministry slapped safeguard duty on cheap aluminum and soda ash imports from China and is likely to initiate the same on twelve more products soon.

The Directorate General of Safeguards (DGS), which is under the wing of the finance ministry, in order to protect the local industry, has slapped a 35 per cent safeguard duty on aluminium sheets and 22 per cent duty on aluminium foils, in the wake of cheap Chinese imports.

Under normal circumstances, the import duty on primary aluminium is 5 per cent, while value-added items such as rolled products and foils, attracts a duty 20 per cent.

The DGS has also said in late January that it will slap a 31 per cent safeguard on soda ash imported from China, although it is yet to issue the notification for it.

The safeguard duty on Chinese imports of aluminum was imposed after the Aluminum Association of India along with the largest maker of the metal in India, Hindalco and public sector undertaking companies, Balco and Nalco lodged a complaint with the commerce ministry, accusing China of dumping cheap aluminum in the country, which was detrimental to the local industry.

After due investigation, the DSG then imposed the safeguard duty for 200 days on aluminum imports from China to protect local industry from predatory pricing.

Hindalco market share in aluminium foils is 55 per cent, which is used in packaging while its share in flat-rolled aluminium is approximately 70 per cent, a metal used by the automobile and the light engineering industries.

Between April-December, the country imported 275,321 tonnes of aluminum compared to an import of 377,607 tonnes for the whole of the last fiscal.

The Indian aluminum manufacturers said that during the April-December period, the monthly production had declined from 107 per cent to 90.3 per cent and the market share of domestic industry in flat-rolled aluminum products declined from 85 per cent in 2005-06 to 77.3 per cent in the April-December period of 2008.

During the same April-December period of 2008, the Chinese imports of aluminum products rose to nearly three times by 15 per cent.

Tata Chemicals along with other manufacturers of soda ash had also filed a complaint with the commerce ministry of China dumping cheap soda ash in the country, which during the April-October 2008 quarter, was about 4,041 metric tonnes.

But this surged during November 2008, when Chinese imports of soda ash reached 10,000 metric tonnes while in December the import was 15,000 metric tonnes.

These heavy imports from China led to inventories with Indian manufacturers rising to 20 per cent between November 2008 and January 2009.

The government is also looking at applying safeguard duty for a period of 200 days on nearly 12 other products in the chemicals and base metals sector from China and other countries since the imports of these products have surged considerably in the past months.

Source: domain-b.comAuthor: shangyi

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