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India starts probe into export of certain Chinese yarn

21
Jul '20

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India has begun a probe into alleged low-cost imports of a certain type of yarn from China, which is reportedly affecting the domestic industry. The Directorate General of Trade Remedies (DGTR) initiated the probe to assess if the subsidy programme of China for export of viscose rayon filament yarn above 60 deniers is affecting the Indian industry.

The Association of Man-Made Fibre Industry of India (AMFII) had filed an application with the DGTR on behalf of the domestic industry for anti-subsidy investigation on the import of this yarn from China.

Alleging material injury to the domestic industry due to subsidised imports from China, the applicant has requested for imposition of countervailing duty on these imports, according to a news agency report.

The product resembles silk, cotton and wool in its feel and texture. It is used to make woven fabrics, and home furnishings. It is a popular choice for making fabrics like georgettes, crepes and chiffons.

“On the basis of the duly substantiated written application by or on behalf of the domestic industry, and having satisfied itself, on the basis of the prima facie evidence submitted by the domestic industry, substantiating subsidization” of the yarn originating in or exported from China, “the authority hereby initiates an investigation to determine the existence, degree and effect of alleged subsidies…and to recommend the amount of countervailing duty, which, if levied, would be adequate to remove the injury to the domestic industry,” the DGTR notification said.

The period for investigation is from April 2019 to March 2020. However, it will cover the data from 2016 to 2019.

Under the global trade rules of the World Trade Organization (WTO), a member country is allowed to impose anti-subsidy or countervailing duty if a product is subsidised by the government of its trading partner.
These duties are trade remedies to protect domestic industry. Subsidy on a product makes it competitive in price terms in other markets. Countries provide subsidies to boost their exports.

Fibre2Fashion News Desk (DS)

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