India initiates probe against alleged dumping of pharma raw material by Chinese firms

New Delhi: India has initiated a probe into alleged dumping of a pharma raw material, Ceftriaxone Sodium Sterile, from China, following complaints by domestic manufacturers.

Nectar Life Sciences and Sterile India have filed an application before the Commerce Ministry’s investigation arm Directorate General of Trade Remedies (DGTR) seeking initiation of the probe.

According to a DGTR notification, the applicants have contended that material injury is being caused to the domestic industry due to dumped imports from China. They requested imposition of anti-dumping duty on the import.

Ceftriaxone Sodium Sterile is an active pharmaceutical ingredient (API) or raw material used for formulation for treating disease like lower respiratory tract infection, skin infection, and intra-abdominal infection.

“On the basis of the duly substantiated written application by the domestic industry, and having satisfied itself, on the basis of the prima facie evidence submitted by the domestic industry, about dumping of the subject goods originating in or exported from the subject country (China)…the authority, hereby, initiates an investigation,” it said.

In the probe, the directorate will determine the existence, degree and effect of alleged dumping in respect of the product from China.

If DGTR finds that there is dumping of the product which is impacting domestic manufacturers, it will recommend the amount of anti-dumping duty, which if levied, would be adequate to remove the injury to the domestic industry.

While DGTR recommends the duty, the Finance Ministry imposes it.

The period of investigation is April 2019-March 2020. It would also look into the data of April 2016-19 period.

In international trade parlance, dumping happens when a country or a firm exports an item at a price lower than the price of that product in its domestic market.

Dumping impacts the price of the product in the importing country, hitting margins and profits of manufacturing firms.

According to global trade norms, a country is allowed to impose tariffs on such dumped products to provide a level-playing field to domestic manufacturers. The duty is imposed only after a thorough investigation by a quasi-judicial body, such as DGTR in India.

The imposition of anti-dumping duty is permissible under the World Trade Organization (WTO) regime. India and China are members of the Geneva-based organisation, which deals with global trade norms.

The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a-vis foreign producers and exporters.