India rejects exemption of Special PVC from anti-dumping duty

The Directorate General of Trade Remedies (DGTR) under the Union Ministry of Commerce and Industry, has dismissed the industry’s proposed inclusion of special polyvinyl chloride (PVC) under the anti-dumping duty (ADD) levy to protect the interest of domestic producers. The authority, with integrated single window agency for providing a comprehensive and swift trade defence mechanism in India, finds the domestic producers’ claim as ‘baseless’ to exclude special PVC from the ambit of ADD duty levy.

“The special PVC produced by the domestic industry are like articles to the product under consideration imported from the subject country within the scope and meaning of the ADD rules. Hence, it is held that the grades claimed by Epigral Ltd do not warrant exclusion from the scope of product under consideration (PUC),” said a DGTR notification issued last week.

The notification further added, “After examination of submissions made by all the interested parties and perusing the material placed on record, the authority concludes that there is no exclusive, clearly identifiable category of PVC suspension resin which is unique for manufacturing of chlorinated PVC (C-PVC). PVC suspension resins claimed as special by Epigral Limited for manufacture of C-PVC resin can be used for other applications and there are other PVC resins which have been used for manufacture of the C-PVC resin. In view of this, the two are technically and commercially substitutable.”

The issue
Chemplast Cuddalore Vinyls Ltd, DCM Shriram Ltd, and DCW Ltd, jointly filed an application before the designated authority for initiation of an anti-dumping investigation concerning imports of PVC Suspension Resins, originating in or exported from China, Indonesia, Japan, Korea, Taiwan, Thailand, and the United States of America. Responding to this application, DGTR initiated ADD investigation vide its notification on March 26, 2024, aiming to determine existence, degree and effect of the alleged dumping of special PVC, originating in or exported from these countries, and to recommend the amount of ADD, which if levied, would be adequate to remove the alleged injury to the domestic industry.

After examination, the submissions made by all other interested parties, the authority concluded that there is a need for imposition of provisional anti-dumping duty in order to offset dumping and injury to the domestic industry, pending completion of the investigation. Accordingly, DGTR issued preliminary findings on October 30, 2024, recommending imposition of provisional ADD on imports of Suspension PVC from the aforementioned countries.

Following the notification recommending ADD levy, India’s major Suspension PVC and C-PVC producer and importer, Epigral Ltd, filed a writ petition before the Gujarat High Court alleging that the submissions made by the company were not considered prior to the issuance of the preliminary findings and the grades specified by it should have been excluded from the scope of the ADD levy. On November 29, 2024, the Gujarat HC in its judgement empowered DGTR to decide the merit of Epigral’s claim and pass the order accordingly.

Submissions by Epigral
There is a need to exclude special grades of PVC suspension resins used for manufacturing of C-PVC as the same are not offered by the domestic industry. The grades produced by the domestic industry are not technically and commercially substitutable with grades imported into India. Additionally, the company believes that special grade PVC is designed for very high porosity which is suitable for uniform chlorination for C-PVC. Such grade has different kinds of formulation to ensure long term heat stability of C-PVC resin which is not there in the case of the general grade of PVC.

The company further mentioned that Formosa Plastics Corporation produces and exports specialty grade PVC S65C, which has higher apparent density than PR065 grade of DCW Ltd. This allows for achieving high productivity and output for end users of C-PVC. Formosa’s S65C offers higher plasticizer absorption as compared to PR065, with large particle size the homogeneity of chlorine distribution is disrupted. PR065 leads to a shorter gelation speed which is not favourable for C-PVC manufacturing. Additionally, Epigral submitted dozens of other factors claiming to exclude special grade PVC from the ambit of ADD levy.

Submissions by Formosa Plastic Corporation
Taiwan-headquartered Formosa Plastic Corporation submitted that grade S65C suspension PVC is primarily utilized for production of C-PVC. The cold plasticizer absorption of S-65C is 27.9 percent, compared to 25.6 percent for normal grade K65 PVC, indicating its superior absorption capabilities. The mean particle size for grade S65C is 132μm, while grade K65 PVC has a mean particle size of 118μm. Particle size distribution shows grade S65C has thinner skin with uniform porosity and high cold plasticizer absorption. This allows chlorine to diffuse evenly during the chlorination process.

DCW does not produce this grade and has imported a significant quantity of S65C. Thus, the grades used for production of C-PVC should be excluded from the scope of the ADD levy. Formosa has endorsed the submissions placed by Epigral Ltd. While Thai Polyethylene Co Ltd opposed the ADD levy on any grade of PVC, Hanwha Solutions Corporation opposed Epigral's claim by saying, “Any exemption of any specialty grade is unjustified and against the purpose of the ADD investigation.

Finally, it was held that special grades of PVC are required in order to manufacture C-PVC, and such grades are neither available in India nor manufactured by domestic producers. According to DGTR, “Epigral has not approached domestic industry or bought special PVC from the domestic industry. Its scarcity for C-PVC was also not communicated to the domestic industry. Hence, the claim that domestically produced grades cannot be used for C-PVC is not established and therefore, is untenable.”


DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com