Seven weeks after initiating anti-dumping investigations on imports of Polyvinyl Chloride (PVC) Suspension Resins, India exempted select grades of the plastic raw material purchased from overseas from the ambit of scrutiny. The exemption was based on comments received from overseas producers and Indian importers, regarding the availability of these products in India and the potential consequences of levying anti-dumping duty on finished products made using these raw materials.
A notification issued by the Directorate General of Trade Remedies (DGTR), under the Department of Commerce of India’s Ministry of Commerce & Industry, stated, “Homopolymer of Vinyl Chloride Monomer (suspension grade) also known as PVC Suspension Resin is manufactured through suspension polymerisation process with K-value between 55 and 77. The following products are excluded from the scope of the product under consideration, which include Ultra-low K-value PVC Suspension Resins (K-value upto 55), Ultra-high K-value PVC Suspension Resins (K-value above 77), Cross-linked Poly Vinyl Chloride, Chlorinated Poly Vinyl Chloride, Vinyl Chloride Vinyl Acetate Copolymer (VC-Vac), Poly Vinyl Chloride Paste Resin, Mass Polymerisation PVC, and Poly Vinyl Chloride Blending Resin.”
The decision followed a formal meeting convened by the DGTR, attended by various industry stakeholders such as producers, importers, and users of PVC Suspension Resins. In the meeting, industry stakeholders raised concerns about the possible impact of the anti-dumping duty levy on these varieties of PVC Suspension Resins. Participants submitted their comments based on an invitation from the DGTR to finalise the scope of the Product Under Consideration (PUC) and the Personal Communication Network (PCN) methodology. PCN is a methodology laid down to compare identical types of Product Under Consideration in any trade remedial investigation. The objective of developing this method is to allow fair comparison for dumping and injury margin calculations.
| Country-wise share in India’s 1.96 MTPA PVC imports |
| Country | Absolute import quantity (‘000 tonnes) | Share in India’s overall import (%) |
| 2021-22 | 2022-23 | 2021-22 | 2022-23 |
| Japan | 280 | 304 | 20 | 16 |
| Taiwan | 259 | 304 | 18 | 16 |
| China | 209 | 645 | 15 | 33 |
| South Korea | 175 | 160 | 12 | 8 |
| USA | 6 | 152 | 0 | 7 |
| Thailand | 95 | 109 | 7 | 6 |
| Indonesia | 48 | 57 | 3 | 3 |
| Vietnam | 37 | 28 | 3 | 1 |
| Others | 318 | 201 | 22 | 10 |
| Total | 1,427 | 1,960 | 100 | 100 |
Source: Reports
However, the DGTR clarified, “There is no requirement of PCN wise analysis in the present investigation. Accordingly, the Authority had decided to proceed with the investigation without PCNs. It is also informed to all interested parties that this is the final PCN/PUC notification. Further, no modification/ comments/ arguments would be entertained by the authority regarding PCNs.”
Meanwhile, the authority has requested all interested parties to file questionnaire responses of PCN/PUC in accordance with the requirement of the Directorate of Trade Remedies by May 28, 2024, being the anti-dumping duty a time bound process. According to participant, the responses from the industry stakeholder will help the authority to draft the industry-friendly anti-dumping policy of PVC Suspension Resins without causing any injury to the domestic producers.
The investigationIn March 2024, India initiated an investigation based on complaints filed by domestic producers alleging material injury caused by cheap imports of PVC Suspension Resin from China, the United States, Indonesia, Japan, Korea, and Thailand. Exporters from these countries have been asked to respond through the PCN with justifications within 15 days. The investigation aims to protect the interests of domestic manufacturers without compromising the interests of downstream players.
A notification issued by the DGTR under the Ministry of Commerce and Industry, reads, “An application has been filed by Chemplast Cuddalore Vinyls Ltd, DCM Shriram Ltd, and DCW Ltd before the designated authority for the initiation of an anti-dumping investigation and imposition of appropriate anti-dumping duty (ADD) on imports of ‘PVC Suspension Resin’ originating in or exported from China, Indonesia, Japan, Korea, Taiwan, Thailand, and the United States.”
Accounting for 25-30 percent of India’s 1.6 million tonnes of cumulative production capacity, these applicants allege that material injury is being caused to the domestic industry due to the alleged dumped imports originating from the aforementioned countries, and have requested the imposition of anti-dumping duties. The product under consideration is Homopolymer of Vinyl Chloride Monomer (suspension grade) also known as ‘PVC Suspension Resin’ or ‘Poly Vinyl Chloride (PVC) Resin’, ‘Suspension Grade’ or ‘PVC Suspension Resin’. In this resin, various polymer chains are not linked to each other.
| India’s PVC demand-supply (million tonnes) |
| Financial year | Domestic demand | Total capacity | Operating rate (%) |
| 2029-30 (f) | 6.0 | 4.0 | 81 |
| 2028-29 (f) | 5.6 | 3.5 | 83 |
| 2027-28 (f) | 5.2 | 3.5 | 75 |
| 2026-27 (f) | 4.9 | 3.0 | 77 |
| 2025-26 (f) | 4.6 | 2.0 | 88 |
| 2024-25 (f) | 4.3 | 1.7 | 90 |
| 2023-24 (f) | 4.0 | 1.6 | 89 |
| 2022-23 (p) | 3.7 | 1.6 | 90 |
| 2021-22 (a) | 2.8 | 1.6 | 89 |
Source: Reports; a = Actual, p = Projection, f = Forecast
PVC Resins manufactured through bulk mass polymerization, emulsion polymerization, and micro-suspension polymerization processes are excluded from the scope of the production under consideration. Products that are excluded from the scope of investigation include Cross-linked Poly Vinyl Chloride, Chlorinated Poly Vinyl Chloride (CPVC), Vinyl Chloride Vinyl Acetate Copolymer (VC-Vac), Poly Vinyl Chloride Paste Resin, Mass Polymerization PVC, and Poly Vinyl Chloride Blending Resin.
PVC Suspension Resins are produced using suspension polymerization technology. To produce PVC Suspension Resin, Vinyl Chloride Monomer (VCM) is converted into Vinyl Polymer through polymerization processes. VCM is either produced using ethylene dichloride (EDC) or by using Calcium Carbide (carbide). PVC produced vide the ethylene route as well as the carbide route is included within the scope of the product under consideration. PVC Suspension Resins are commonly used in manufacturing various products like pipes and fittings, flexible hoses, films/sheets, bottles, profiles, wire and cables, footwear etc.
Product alignmentThe applicant companies have stated that there are no significant differences in the domestically produced PVC Suspension Resin and imported one from China, the United States, Indonesia, Japan, Korea, and Thailand. The PVC Resin produced by the domestic industry and imported from these countries are comparable in terms of physical and chemical characteristics, manufacturing process and technology, functions and uses, product specifications, pricing, distribution and marketing, and tariff classification.
Meanwhile, Indian producers have claimed that the two are technically and commercially substitutable and the consumers are using both the products interchangeably. Thus, for the present investigation, the product produced by the domestic industry has been considered as like article to the product being imported from China, the United States. Indonesia, Japan, Korea, and Thailand.
Interestingly, Indian producers have claimed that the nine-month period from October 1, 2022, to June 30, 2023, is appropriate for the present investigation as dumping of the product under consideration intensified in the October-December 2022 quarter. Accordingly, the application has been filed considering the period of investigation for which dumping started in India till the latest period for which the data was available. Hence, the authority has widened the scope of investigation which will cover from October 1, 2022, to September 30, 2023, and the injury will cover the period financial year (FY) 2020-21, FY2021-22, and FY2022-23.
Domestic industryThe three domestic complainant companies Chemplast Cuddalore Vinyls Ltd, DCM Shriram Ltd, and DCW Ltd are the primary producers of PVC Suspension Resin in India. These companies have neither imported PVC Suspension Resin from the alleged dumping countries during the period of investigation nor are they related to any other producer/exporter of subject goods in the subject countries or any importer in India.
There are two more producers of PVC Suspension Resin in India such as Finolex Industries Ltd and Reliance Industries Ltd. They have neither supported nor opposed the present application. Further, the applicants have claimed that these producers were also involved in importing the product under consideration in India from the subject countries during the period of investigation. The applicants have claimed that such producers should not be considered eligible to constitute the domestic industry.
In any case, even if the two producers are considered eligible, as per the evidence available on record, the production of the applicants accounts for a major share in the overall domestic production of the like article in India. Therefore, DGTR has considered the applicants i.e. Chemplast Cuddalore Vinyls Ltd, DCM Shriram Ltd, and DCW Ltd, as domestic industry.
Computation procedureIndian producers have submitted that China should be treated as a non-market economy. Therefore, Chinese producers should be directed to demonstrate that the market economic conditions in the industry for the production and sales of PVC Suspension Resin. Unless Chinese producers show the prevalence of such market economic conditions, their normal value should be determined with the procedures applicable in India.
Consequently, the normal value has been constructed for initiating the investigation based on the estimates of the cost of production in India duly adjusted with selling, general, and administrative expenses, along with a reasonable profit margin. Indian producers have claimed that they had made efforts to determine the normal value for subject countries on direct selling prices in these countries. However, they were not able to find any evidence of the same.
Furthermore, PVC Suspension Resin is being dumped in India from all major sources and hence, imports into Indian territory cannot be considered. There are no dedicated codes for PVC Suspension Resin. Consequently, it was not possible to determine normal value, based on exports from such countries to other countries. The Authority, for the initiation, has prima facie determined the normal values for Indonesia, Japan, Korea, Taiwan, Thailand, and the United States on costs of production of the applicants’ companies in India duly adjusted for selling, general and administrative expenses, and reasonable profits.
Comparing normal valueMeanwhile, the investigating authority has compared the normal value and the export price at the ex-factory level, which prima facie establishes that the dumping margin is above the ‘de minimis’ level and is significant to the product under consideration imported from Indonesia, Japan, Korea, Taiwan, Thailand, and the United States. Thus, there is sufficient prima facie evidence that PVC Suspension Resin from these countries is being dumped in the domestic market by the exporters.
Indian producers have claimed that the volume of PVC Suspension Resin imports has increased significantly in absolute terms as well as production and consumption in India. Evidence clearly shows that increasing imports are undercutting the prices of the domestic industry. The cost of sales as well as the selling price of the domestic industry increased in 2021-22 as compared to the base year and declined thereafter in 2022-23. The selling price of PVC Suspension Resin declined much more than the cost of sales of the domestic industry. Thus, the imports have suppressed and depressed the prices of the domestic industry.
While the volume parameters of the domestic industry have shown an increase, the market share of the domestic producers and traders as a whole has declined since 2021-22. The profitability of the domestic industry has deteriorated, and it has incurred financial losses during the period of investigation. The cash profits and return on investment earned by the domestic producers have declined significantly. Further, the imports have adversely affected the ability of the domestic industry to raise capital investments, and the dumping margin for exporting countries is positive and significant.
DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com
