India may increase import duty on a chemical from Korea

By: |
September 29, 2020 10:43 PM

The increase in duty was recommended by the commerce ministry's investigation arm DGTR after concluding a probe into an alleged increase in imports of the chemical from South Korea following complaints by domestic firms.

The finance ministry will take the final call to impose the duty. 

India is likely to increase import duty on Phthalic Anhydride, a chemical used in insecticides and plastic industry, for two years from South Korea with an aim to guard domestic players from jump in the inbound shipments. The increase in duty was recommended by the commerce ministry’s investigation arm DGTR after concluding a probe into an alleged increase in imports of the chemical from South Korea following complaints by domestic firms.

According to a notification issued by the Directorate General of Trade Remedies (DGTR), IG Petrochemicals Ltd and Thirumalai Chemicals Ltd had filed an application for initiation of the bilateral safeguard probe. In its conclusion, the directorate has stated that increased imports of the product have caused “serious injury” to the domestic industry.

The investigation on the imports was conducted under India-Korea Comprehensive Economic Partnership Agreement (Bilateral Safeguard Measures) Rules, 2017. It is a kind of a free trade agreement.

“The authority recommends increasing the rate of customs duty on imports of subject goods originating in Korea to the level of Most Favoured Nation (MFN) applied rate of customs duty on the subject goods as on the date of application of bilateral safeguard measure or MFN applied rate of customs duty on the subject goods on the day immediately preceding the date of entry into force of the Trade Agreement, whichever is less,” it said.

The measure is recommended for a period of two years. For the first year, the directorate has suggested to “increase the rate of customs duty @ 100 per cent to the level of most favoured nation applied rate of customs duty”. For the second year, it has recommended to “increase the rate of customs duty @ 75 per cent to the level of Most Favoured Nation applied rate of customs duty”.

The finance ministry will take the final call to impose the duty. The bilateral trade between the two countries slightly dipped to USD 20.5 billion in 2019 from USD 21.5 billion in the previous fiscal. Trade balance is highly in favour of Korea

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