ASSOCHAM opposes levy of anti-dumping duty on PTA

The Associated Chamber of Commerce and Industry of India (ASSOCHAM) has strongly opposed imposition of anti-dumping duty on imports of Purified Terephthalic Acid (PTA) as the domestic user industry is struggling to survive due to wide gap in demand and availability and exports will suffer severely.

In a note submitted to the government, ASSOCHAM has stated that the capacity utilization by the domestic industry for the past several years has been more than 100% and there still exists a significant demand and supply gap in India which is to be necessarily filled by imports.

Currently, the PTA is being imported from China, European Union, Korea and Thailand. The chamber says during 2012-13, the total industry production was 34, 76,144 (MT), imports were 6,47,959 (MT) as against the demand of 41, 24,103 (MT) excluding captive consumption by the PTA producers.

In the above context, Mr. D S Rawat Secretary General ASSOCHAM said, if anti-dumping duty was imposed, it will render the imports extremely expensive for purchase by the users of PTA and the user industry in India will become uncompetitive.

The price of paraxylene (PX) increased substantially during 2011-12 and 2012-13 while the price of naphtha (raw material for the production of PX) did not increase at the rate in which prices of PX increased during 2011-12 and 2012-13. However, the increase in prices of Naphtha was commensurate with increase in prices of PTA.

The imposition of anti-dumping duty on PTA will severely curb the production of downstream products such as polyester filament yarn, polyester staple fibre and synthetic textiles. The above products also contribute significantly to total exports from India. The EU market may soon be closed to Indian exports of the above products due to the anti-subsidy investigation on PSF imports currently being conducted by EU. PSF exports from India to EU were 63241 MT in 2012, thus highlighting the significance of exports of only one of the numerous downstream products of PTA.

There is an absolute as well as a proportional decline of imports of PTA from China, EU, Korea and Thailand over 2010-11, 2011-12 and 2012-13. In addition, the landed value of PTA from China, EU, Korea and Thailand has increased consistently and substantially over 2009-10, 2010-11, 2011-12 and 2012-13.

Domestic Producer is engaging in "profit booking" by producing naphtha and Paraxylene (PX) in one plant, and then selling PX at artificially high rates to the other plant for the manufacture of PTA. The anti-dumping investigation is also aimed at supplementing this practice of profit booking by the imposition of anti-dumping duty and achieving double profit booking.

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