In a significant relief for domestic producers, the government of India has imposed quota restrictions on imports of Polyvinyl Chloride (PVC) Suspension resins with Residual Vinyl Chloride Monomer (RVCM) content above 2 parts per million (PPM) (PVC Suspension resins). The imposition of these restrictions is aimed at curbing the dumping of PVC Suspension resins, which has been on the rise primarily from China, Taiwan, the United States, and Russia, causing significant harm to Indian producers.
A notification issued by the Ministry of Commerce and Industry, under the guidance of the Directorate General of Trade Remedies (DGTR), has introduced quarter-wise quantitative restrictions on PVC Suspension resins from major countries. In the first quarter from April to June, the quota has been fixed at 54,203 tonnes, while the second, third, and fourth quarters of the financial year have quotas at 54,920 tonnes, 55,646 tonnes, and 56,382 tonnes, respectively.
Furthermore, the notification specifies individual import quotas for each quarter from China, Taiwan, the United States of America, and Russia. China, for instance, has an import quota of 20,494 tonnes for the first quarter, followed by slightly higher quantities of 20,765 tonnes, 21,039 tonnes, and 21,317 tonnes in the second, third, and fourth quarters, respectively. Similarly, separate quotas have been assigned for each quarter for imports of PVC Suspension resins from Taiwan, the United States of America, and Russia.
| Quota restrictions (tonnes) |
| Particulars | Quarter |
| 1st | 2nd | 3rd | 4th |
| Total* | 54,203 | 54,920 | 55,646 | 56,382 |
| Imports from China | 20,494 | 20,765 | 21,039 | 21,317 |
| Imports from Taiwan | 15,100 | 15,299 | 15,502 | 15,707 |
| Imports from the USA | 9,690 | 9,818 | 9,948 | 10,079 |
| Imports from Russia | 8,920 | 9,038 | 9,157 | 9,279 |
| Imports from other developing countries | Countries as per the list below are exempted from the imposition of safeguard measures** |
| Imports from other developed countries | No known imports of the product under consideration above 2 PPM |
Source: Government of India notification
*Polyvinyl Chloride (PVC) Suspension resins with Residual Vinyl Chloride Monomer (RVCM) content above 2 parts per million (PPM)
**The quota has been determined by taking an average of import volumes of the product in India for three years preceding the most recent period. The figure arrived has been apportioned on a quarterly basis by considering the growth of demand over the period
Aggrieved by a sudden increase in imports, which has been labeled as dumping, India’s two primary producers, Chemplast Cuddalore Vinyls Limited and DCW Ltd, filed a complaint before the respective authorities on July 15, 2022. They sought quantitative restrictions on the import of PVC Suspension resins to protect the interest of domestic producers. The complainants alleged that the dumping of PVC Suspension resins has severely harmed domestic producers as they were compelled to reduce selling prices due to cheap imports.
Investigations conducted by the DGTR revealed a substantial and rapid increase in imports of PVC Suspension resins over a very short period. Import volume of PVC Suspension resins surged between January and June 2022. Compared to the fiscal years FY2019-20 and 2020-21, import volumes have doubled in the most recent period. Overall, imports of PVC Suspension resins during the considered period have increased by approximately 115 percent in absolute terms. This clearly indicates a recent, sudden, sharp, and significant surge in imports.
“Since the increase in imports is attributed to the lower production costs in China resulting from unforeseen developments, the adjustment plan provided by the applicants consists of measures to reduce the cost of production. These measures aim to make the domestic industry competitive against imports of PVC Suspension resins. The imports of PVC Suspension resins have undercut the prices of the domestic industry and put pressure on the selling prices in the local market. To maintain its customer base, the domestic industry has been forced to lower its prices,” the notification said.
During the period of increasing imports, the market share of imported goods witnessed a substantial increase in India. The domestic industry has suffered a significant injury in the most recent period, with profits, cash profits, and profits as a percentage of selling price experiencing substantial declines. Additionally, the inventories of the domestic industry have increased.
“The Imposition of safeguard measures, in the form of quantitative restrictions, would be in the public interest. It will prevent serious injury to the domestic industry while having an insignificant and bearable impact on the downstream industry, as the demand for PVC Suspension resins would continue to be met through imports,” said the notification.
An industry official, who preferred to remain anonymous, stated, “India’s primary PVC Suspension resins producers have suffered greatly due to rising imports. Therefore, we sought protection from the government, considering that imports meet over 55 percent of India’s PVC demand. Further, increasing imports would have discouraged domestic producers and increased India’s dependence on imports, which contradicts the government’s ‘Make in India’ initiatives. The primary producers are truly grateful to the government for imposing quantitative limits on imports as a safeguard measure. This will ensure that India’s demand is met without negatively affecting domestic producers.”
DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com
