India may impose safeguard duty on import of sodium nitrite, a chemical used by textiles and pharma industries, to protect domestic producers from "serious injuries" caused by the rising inward shipments.
Acting on a complaint of domestic producers of the chemical, the Directorate General of Safeguards (DGS) in the Finance Ministry carried a probe and concluded there has been a significant increase in imports and recommended levy the of the safeguard duty.
"Increased imports of sodium nitrite into India have caused and threaten to cause serious injury to the domestic producers and it will be in the public interest to impose safeguard duty on imports of Sodium Nitrite for a period of one year and three months," said the DGS in its 'Final Findings'.
It has recommended the duty at the rate of 30% ad valorem for the first year and 28% ad valorem for last three months, which is "considered to be the minimum required to protect the interest of domestic industry".
Sodium nitrite is imported from several countries, and primarily from China and Germany. China constituted 81% of total imports in India in 2012-13.
Safeguard duty is a WTO-compatible temporary measure that is brought in for a certain time-frame to avert any damage to domestic industry from cheap imports.
The final findings and the recommendations of DGS is considered by the Standing Board on Safeguards headed by Commerce Secretary. Then the views of the Board are placed before the Finance Minister for approval in respect of safeguard duties and to the Commerce Minister for imposition of quantitative restrictions.
The chemical is mostly used in pharmaceutical, dye, meat processing and textiles industries, among others.
The imports increased from 14,290 MT in 2009-10 to 22,162 MT in 2012-13. The domestic producers had a market share of 55% in 2010-11 which declined to 41% in 2012-13. On the other hand, the market share of import increased from 35% in 2010-11 to 45% in 2012-13.
The domestic producers of the chemical include Deepak Nitrite Ltd (Pune), Punjab Chemicals & Pharmaceuticals Ltd (Chandigarh), National Fertilizers Ltd (Noida), and Rashtriya Chemicals and Fertilizers (Sion, Mumbai). Deepak Nitrite Ltd is the last producers of the chemical in the country.
The DGS used data for the period 2009-10 to 2012-13 for the investigations.
