Context:

• Recently, the government has abolished anti-dumping duty on a chemical called Purified Terephthalic Acid (PTA).
• It was also being mentioned by the Finance Minister in her Budget speech.

About Purified Terephthalic Acid (PTA):

• It is important for those who are in the manufacturing sector of man-made fabrics or their component – makes up for around 70-80% of a polyester product.
• It is a crucial raw material used to manufacture polyester coatings resins for use in the formulation of general metal, appliance, automotive, industrial maintenance, and coil coatings.
• What is Dumping?  It is said to occur when the goods are exported by a country to another country at a price lower than the price it normally charges in its own home market. This is an unfair trade practice which can have a distortive effect on international trade.
• What is Anti-dumping? It is a measure to rectify the situation arising out of the dumping of goods and its trade distortive effect.
• Anti-dumping duty is used as an instrument of fair competition which is permitted by the World Trade Organisation (WTO).

Reason for the Controversy:

• The domestic companies facing with limited domestic suppliers of PTA because of their costlier product less attractive for their domestic and international buyers.
• An increase in imports of the products they had been producing, as there was no safeguard against imports of cheaper versions of these downstream polyester-based products.
• The abolition of Anti-Dumping Duty on PTA has come after persistent demand from the manufacturing and Textile Industry.

• Other raw materials: Mono Ethylene Glycol (MEG), another raw material used in the manufacturing of polyester, is currently the subject of another anti-dumping duty investigation initiated by DGTR recently.

Directorate General of Trade Remedies:

• The anti-dumping duty on PTA was imposed after domestic manufacturers approached the Directorate General of Trade Remedies (DGTR).
• It is the apex national authority under the Ministry of Commerce and Industry.
• It administers all trade remedial measures including anti-dumping, countervailing duties and safeguard measures.
• It provides trade defence support to the domestic industry and exporters in dealing with increasing instances of trade remedy investigations instituted against them by other countries.