Final Finding issued in Bilateral Safeguard Investigation concerning imports of “Phthalic Anhydride” into India from Korea under India-Korea Comprehensive Economic Partnership Agreement (Bilateral Safeguard Measures) Rules, 2017

Product description – The product under investigation is “Phthalic Anhydride”, commonly used to produce Phthalate esters, which function as plasticizers. Phthalic Anhydride is an anhydride of Phthalic Acid and is commercially produced by catalytic oxidation of Ortho-xylene or Napthalene. It is colourless, solid, variously referred as Phthalic Anhydride flakes, Phthalic Anhydride (98% min.), Phthalic Acid Anhydrous, Phthalic Anhydride (99.8% min) etc.

HS Code – 2917 35 00

Uses – Phthalic Anhydride is used to produce phthalate esters, which function as plasticizers. Further, it is a chemical intermediate in plastic industry and is also used in the manufacturing of paint, pigment & dyes (CPC), unsaturated polyester resins, PU adhesives, alkyl resin, copper phthalocyanine blue crude, polyester polyols, halogenated anhydrides, polyetherimide resins, isatonic anhydride and insect repellent.

Countries involved – Korea RP

Applicants – IG Petrochemicals Limited and Thirumalai Chemicals Limited

Date of initiation – 1st October 2019

Period of investigation – April 2015- March 2016, April 2016-March 2017, April 2017-March 2018, April 2018- March 2019 and April 2019-September 2019

Date of levy of provisional duty (if any, with Customs Notification No.) – 11th May 2020 imposed through Notification No.29/2020- Customs dated 6th July, 2020.

Proposed duty – Bilateral Safeguard Measures recommended for a period of two years from the date of imposition of provisional duty.

Year Bilateral Safeguard Measures
First Year Increase the rate of customs duty @ 100% to the level of Most Favoured Nation applied rate of customs duty
Second Year Increase the rate of customs duty @ 75% to the level of Most Favoured Nation applied rate of customs duty

Key findings

  1. The imports of subject goods have increased significantly in absolute terms and in relation to gross imports in India, Indian production and consumption and were undercutting the domestic prices.
  2. The domestic industry has lost its production, sales and market share due to increase in Korean imports.
  3. The Korean imports benchmarked the prices of the domestic industry due to which the domestic industry was forced to sell at losses.
  4. Increased imports further caused a threat of injury to the domestic industry.