I have been following the developments in the polyester industry with some interest since they are a micro example of how policies in this country are tailor-made to benefit the chosen ones. A glaring example is the imposing of anti-dumping duties on PTA which will push up input costs in the already beleaguered polyester industry, squeezing their margins further.
Bombay Dyeing claimed injury due to DMT dumping and Reliance showed its interest in the case to indicate future injury when its second PTA plant would go on stream. Bombay Dyeing had sought imposition of anti-dumping duty on the basis of injury caused to manufacturers of DMT a like product to PTA (theory opposed by experts since PTA and DMT have different end users and have been defined by WTO as different products both chemically and technically.)
The anti-dumping cell did not use the data for Reliance on the pretext that the company had imported PTA in 1995 and so did not qualify as a domestic industry whose interests were threatened. And yet, most curiously, while the investigating agency used the figures for DMT for investigation, the duty has only been imposed on PTA for the sole benefit of Reliance.
Reliance, incidentally, is the only PTA manufacturer in the country and is making very healthy profits. It uses 65 per cent of its production for captive consumption and sells the remaining 35 per cent in a market where demand far exceeds supply. Till date, the demand for both PTA/DMT in the country is more than the domestic production.
The anti-dumping cell has also wrongfully attributed the decline in the capacity utilisation of Bombay Dyeing in the investigating period (May-June 96) as an economic indicator affecting domestic industry. If they had checked the figures for October 1996, they would have known that Bombay Dyeings capacity utilisation had decreased due to expansion activities. A situation which was rectified in October, as shown by the capacity utilisation for the month a record 106 per cent.
There is, therefore, no rationale for imposing anti-dumping levy on PTA given the crisis situation prevailing in the polyester industry. But then, when did the government ever base its actions on reason. And after all, isnt Reliance the first among equals.
