The Aggressor and Injured are the Same Persons in the PSF Anti-dumping Case

- Arun Goyal -

Reliance and Indo Rama have a monopoly on the staple fibre industry. According to the finding of the DG anti-dumping in 2000, the two controlled 82 percent of the industry. Reliance has opted out in the definition of complainant, unlike in the earlier plaints when it was very much on the scene. Nonetheless, it will be protected by the anti-dumping duty. Reliance claims to be the biggest producer of polyester fibre and yarn in the world accounting for 3.5 percent of world production. It has a 65,000 tonne plant for PSF in Malaysia. Indo Rama has a large presence in Thailand and Indonesia with a factory rivalling Reliance in terms of capacity and quality.

Both Thailand and Malaysia are named in the anti-dumping plaint filed. Now this becomes a case where both the injured party and the accused are the same person! One can expect that the Thailand and Malaysia based arms of the two conglomerates will furnish data to show that their prices were not injurious during the period of investigation and hence the anti-dumping duty should apply only to their competitors in the two countries. Thus Reliance and Indo Rama can undercut competitors and avoid the anti-dumping customs duty.

There is another angle, Indian industry was able to produce the domestic price data in the dumping countries to the anti-dumping authorities as in 2000, yet, 17 years later, it is not able to get the domestic price in these very countries, even as its members Reliance and Indo Rama are major players in the two of the accused dumping countries. They tell the anti-dumping authority that “reliable information in the public domain is not available in the subject country.” The claim has been accepted by the Government agency so that a very high artificial price is constructed based on the assumed costs. This will result in good dumping margin and consequently high anti-dumping duty for the next five years.

The protection to PSF will hurt the users as well as the textile exporters who will lose the viability in the competitive world market. The power loom weavers who use blended yarn will be specially affected. Reliance had tried to get the duty slapped in year 2000 and there was even a final finding in its favour. But following the protests of the users who armed themselves with a string of stay orders from various High Courts, the Government stayed its hand and did not issue to customs notification to implement the perverse finding of the anti-dumping authority in Ministry of Commerce. This time round, the fight will be more difficult since the authority has already accepted artificial construction of the domestic price in the dumping country. It has also accepted that petitioners account for a major share of the industry when the two majors Reliance and Indo Rama are themselves in the list of those accused of dumping.

The only saving grace is that dyed PSF is excluded from the description of goods subject to dumping investigation. China specializes in this area hence the users will have alternate access to some extent to cut their costs through low price import.

The investigation of the anti-dumping authority will be fast, one can expect a stiff anti-dumping duty within six months unless the users move the courts and the government for stay of the impost.