DGTR to impose Countervailing Duty on Copper Tubes, Pipes from Malaysia, Thailand, Vietnam

The Trade Ministry has recommended imposing a five-year countervailing tariff on copper tubes and pipes from Malaysia, Thailand, and Vietnam, in order to protect domestic players from subsidised imports from these countries. The ministry’s investigation arm, the Directorate General of Trade Remedies (DGTR), indicated in its findings following an inquiry that the investigation was launched on its own initiative and that all relevant parties were notified.

The DGTR went on to say that the local industry, these nations’ embassies, exporters, importers, and other interested parties were given the chance to contribute positive information on the subject of subsidisation, harm, and causative relationship.

In a notification, the DGTR stated, “Having commenced and conducted an inquiry into subsidisation, harm, and causal link…the authority is of the view that application of countervailing duty is necessary.”

The proposed duty is between 2.3 percent and 14.76 percent of the CIF (cost, insurance, freight) value.

“The authority recommends imposing definite countervailing duty…for a five-year term,” it continued.

The finance minister will now make the final decision on whether or not to impose the tax.

According to the DGTR, the volume of imports has increased both in absolute terms and in relation to Indian consumption.

The Directorate received representations from the Bombay Metal Exchange in July/August 2020, expressing worry about the disappearance of domestic manufacture of copper tubes and pipes, as well as a significant fall in output in India. According to the Exchange, this is owing to a major increase in imports from these countries as a result of large subsidies/benefits provided to their producers as well as tariff concessions.

They also expressed concern about the requirement to file a properly documented petition, citing the fragmented and dispersed nature of the business.

Taking into account the representations, the DGTR launched an investigation on September 25, 2020, into government subsidies awarded on a suo-moto basis by the governments of Malaysia, Thailand, and Vietnam on copper pipe and tube exports to India without a fully documented petition.

After more than two decades, the Directorate started two trade remedy investigations on an ad hoc basis in 2020.

Normally, the DGTR investigates trade remedies on the basis of a fully documented petition, but in exceptional circumstances, such as when the industry is fragmented and dispersed, the DGTR resorts to suo-moto investigations to provide relief to the ailing domestic industry from unfair trade practises and ensure a level playing field.

A countervailing duty is a country-specific tax levied to protect domestic industry from unfair trade subsidies supplied by exporting countries’ local governments.

A member country may impose anti-subsidy to countervailing tariff if a product is subsidised by the government of its trading partner, according to the World Trade Organization’s (WTO) global trade regulations.

These tariffs are trade remedies aimed at safeguarding home industries. A subsidy on a product makes it more competitive in other markets in terms of pricing. This is provided by countries in order to enhance their exports.