India begins sunset review on PTA anti-dumping duty post HC order

However, these duties were rescinded by the central government in February 2020 in budget proposals. Reliance challenged this rescission in the High Court of Gujarat. The court quashed the notification and ordered the government to initiate a sunset review, affirming that the ADD on the product was leviable.

PTA, a basic raw material for polyester staple fibre, is already in short supply in the country, driving up prices of the raw material and its products like polyester staple fibre and various types of polyester yarn. PTA and its products are also facing restrictions on import due to Quality Control Orders (QCOs), causing PTA prices to soar above international rates.

RIL, along with MCPI Private Limited, argued in their application that anti-dumping duties should be continued on PTA, including its variants—Medium Quality Terephthalic Acid (MTA) and Qualified Terephthalic Acid (QTA)—imported from the Republic of Korea and Thailand. After investigation, the DGTR recommended duties on the product. Subsequently, the government imposed the duty on July 24, 2019, for a period of five years.

It is to be noted that the government imposed an anti-dumping duty on the import of PTA from several other countries in 2016 after due investigation. It levied duty on imports from remaining countries Korea and Thailand in July 2019. The government removed the duty in its Union Budget 2020 proposals. The premature removal of the duty was challenged by RIL and other companies in the Gujarat High Court.

In this matter, R K Vij, emeritus president of the Textile Association of India (TAI) and secretary general of the Polyester Textile and Apparel Industry Association (PTAIA), told Fibre2Fashion, “Domestic prices of PTA are hovering $90-100 per ton higher than international rates, which is weakening the spinning and weaving industry. The government should challenge the HC order in the apex court to provide much-needed relief to the downstream industry.”

He said that industry organisations are also contemplating challenging the order in the Supreme Court. However, it is better if the government challenges it, as it was the party in the HC case. The HC has not acknowledged the industry associations’ pleas to be made a party as consumers of the product.

Vij also raised concerns about the demand for bank guarantees from PTA importers by the customs authorities as the government has initiated a sunset review. The importers and consumers will have to face uncertainty regarding the costing of imported PTA as the sunset review is yet to reach a conclusion.

Fibre2Fashion News Desk (KUL)