Suo-moto probe by DGTR: Govt imposes countervailing duty on copper tubes, pipes

As a result of a suo moto investigation by the Directorate General of Trade Remedies, the government has imposed a countervailing duty for five years on copper tubes and pipes coming from Malaysia, Thailand and Vietnam. The duty was imposed to protect domestic players against subsidised imports from these countries.

"The countervailing duty imposed under this notification shall be levied for a period of five years (unless revoked, superseded or amended earlier) from the date of publication of this notification in the official gazette and shall be payable in Indian currency," the Department of Revenue has said in a notification dated April 28.

The duty imposed is in the range of 2.13 per cent of CIF (cost, insurance, freight) value to 14.76 per cent of CIF value.

The CIF value is the actual value of the goods when they are exported.

According to the Directorate General of Trade Remedies (DGTR), the volume of imports has increased in absolute terms.

The Finance Ministry takes the final call on whether to impose the duty, after being recommended by the DGTR.

In July/August 2020, the directorate received representations from the Bombay Metal Exchange, which expressed concern about the disappearance of domestic production of copper tubes and pipes and the rapid decline in production in India.

There has been an increase in imports from these countries due to a substantial subsidy system and tariff concessions available to their producers.

The industry is fragmented and dispersed, which has also raised concerns regarding the requirement of filing a fully documented petition.

Taking these representations into consideration, the DGTR launched an investigation on September 25, 2020, of subsidies given by Malaysia, Thailand and Vietnam on exports of copper pipes and tubes to India on a suo-moto basis without a fully documented petition.

Only in 2020, two trade remedy investigations were initiated by the Directorate on a suo-moto basis after more than two decades.

In most cases, the DGTR conducts an investigation into trade remedies on the basis of a fully documented petition, but in cases where a fragmented market exists, it may conduct suo-moto investigations to provide relief to the ailing domestic industry from such unfair trade practices to ensure a level playing field.

Countervailing duty is a country-specific duty imposed to safeguard the domestic industry against unfair trade subsidies provided by the local governments of the exporting nations.

Under the global trade rules of the World Trade Organization (WTO), a member country is allowed to impose anti-subsidy to countervailing duty if a product is subsidised by the government of its trading partner. 

(With Inputs from PTI)