Alleged vitamin C dumping by China: Pharma cos seeks imposition of anti-dumping duty
New Delhi: In a stringent view, the Government has launched an inquiry while examining a complaint moved by the largest producer of Vitamin C in India, Bajaj Healthcare, alleging that the domestic industry is impacted due to the dumping of Vitamin C from China.
This comes in wake of the complaint moved by Bajaj, which alleged that the domestic industry is impacted due to the dumping of Vitamin C from China PR and sought the imposition of anti-dumping duty on the imports. The complaint was reportedly also backed by other manufacturers of the product--Amoli Organics Pvt Ltd, Reckon Diagnostics Pvt Ltd, and SR Biochem
On the basis of prima facie evidence submitted by Bajaj Healthcare to the commerce ministry's investigation arm Directorate General of Trade Remedies (DGTR), a probe has been initiated.
To elaborate and simplify the cause of complaint, in international trade parlance, dumping happens when a country or a firm exports an item at a price lower than the price of that product in its domestic market. Dumping impacts the price of that product in the importing country, hitting margins and profits of the manufacturing firms.
Acting on the concern, the DGTR will now conduct the investigation for the period of 2019-2020 and will also look at the impact of the dumping on domestic vitamin C manufacturers for the period starting April 2016 till March this year.
As per DGTR notification, "The Applicant (Bajaj Healthcare) has claimed that its performance has been adversely impacted during the POI (period of investigation) leading to a decline in market share, profits, return on capital employed (ROCE) and cash profits."
"...the Authority, hereby, initiates an investigation to determine the existence, degree, and effect of any alleged dumping in respect of the subject goods originating in or exported from the subject country and to recommend the amount of anti-dumping duty, which if levied, would be adequate to remove the injury to the domestic industry," the notification dated 4 September added.
If DGTR will find that there is dumping and it is impacting the domestic manufacturer, it will recommend the amount of anti-dumping duty, which if levied, would be adequate to remove the injury to the domestic industry.
While the DGTR recommends the duty, the finance ministry imposes the same, reports PTI
According to global trade norms, a country is allowed to impose tariffs on such dumped products to provide a level-playing field to domestic manufacturers. The duty is imposed only after a thorough investigation by a quasi-judicial body, such as DGTR, in India. The imposition of anti-dumping duty is permissible under the World Trade Organization (WTO) regime. India and China are members of this Geneva-based organization, which deals with global trade norms.
The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a-vis foreign producers and exporters.
Bajaj Healthcare is one of India's manufacturers of vitamin C, which is ascorbic acid, as well as its derivatives. In its investor presentation last month, the company listed Sun Pharmaceutical Ltd, Pfizer Ltd, Abbott Healthcare, and GlaxoSmithKline Pharmaceuticals among its top clients for active pharmaceutical ingredients in the domestic market, reports Live Mint.