The level of safeguard duty recommended for the chemical used for manufacturing epoxy resins, pesticides and certain pharmaceutical formulations is 22 per cent for the first year, 15 per cent for the second year and 9 per cent for the third year.
The application for imposition of safeguard duty on ECH had been filed by Tamil Nadu Petroproducts following which investigations were started by the DG (safeguards) office in March 2002.
In the final findings of the investigations, it was observed that import duties were brought down sharply from 65 per cent in 1995-96 to 25 per cent in 2001-02 following which there was a sharp reduction in import prices of ECH from $ 1,528 per mt in 1996-97 to $ 1,059 per mt in 1999-2000.
Import of the product too surged in the period. Imports increased from 1,931 mt in 1997-98 to 4.971 mt in the first ten months of 2001-02. On pro-rata basis the import of ECH during the current year 2001-02 works out to 5,965 mt.
During the period under consideration, TPL produced 3,595 mt of ECH in 1996-97, 2349 mt in 1997-98, 951 mt in 1998-99 and in 1999-2000, 3,620 mt in 2000-01 and 2,997 mt of ECH in 2001-02 (up to January, 2002) which on pro-rata basis works out to 3596 mt for the whole of 2001-02.
The increase in production during 2000-02 after a sharp fall in the previous two years was due to an alliance with Ciba Geigy for setting up a joint venture company for manufacture of epoxy resins. The company sourced its requirement of ECH exclusively from TPL.
The investigations pointed out that while domestic consumption from 1996-97 to 2001-02 increased by 206 per cent, domestic production of ECH has remained almost stagnant during the period.
It concluded that increased imports of ECH into India had caused and further threatened to cause serious injury to the domestic producers of ECH and it would be in public interest to impose safeguard duty for a period of three years.