Product Description- The product under considerationisViscose Rayon Filament Yarn/Thread above 75 deniers with permissible tolerance limits’ classifiable under customs classification 5403, excluding yarn produced through Spool Spun Technology and ready to use embroidery thread on a small bobbin that can be installed on an embroidery machine, and which is classifiable under customs classification 5401.

HS Codes – The product is classified under Chapter 54 of the Custom Tariff Act, 1975 under subheadings of the tariff custom classification as 5403. The product is majorly imported under 54031090, 54033100, 54033200, 54033300, 54033990, 54034110, 54034150, 54034190, 54034911, 54034912, 54034913, 54034919 and 54034990.

Country involved- China PR

Applicant – Association of Man-Made Fiber Industry Limited and Grasim Industries Limited.

Period of investigation – 1^st October 2023 to 30^th September 2024

Injury period – 2021-22, 2022-23, 2023-24 and the period of investigation

Margins and recommended Duties:

Key findings:

1. The product under consideration is Viscose Filament Rayon Yarn (VFY) above 75 deniers. The scope excludes yarn produced through Spool Spun Technology and ready-to-use embroidery thread classifiable under customs classification 5401.
2. There are significant technological and cost differences among the three production processes.
3. The capital cost per unit of production is substantially higher for SSY than for CSY and PSY. Yarn produced through SSY technology is not imported from China and primarily caters to deniers below 75.
4. Embroidery thread classifiable under 5401, which is ready to use, is excluded from the scope of the product. However, any product classified under 5403 is included within the scope of the product under consideration.
5. The scope of the product under consideration does not include 75 deniers.
6. VFY is traded and classified based on the declared denier. However, the determination of denier for imports is being undertaken with permissible tolerances.
7. The application has been filed by the Association of Man-Made Fibre Industry of India and Grasim Industries Limited. The other producer namely Cygnet Industries Limited have supported the application. The domestic industry accounts for a major proportion of total Indian production.
8. The dumping margin for the participating producer Xinxiang Chemical Fibre Co. Ltd. is in the range of 0-10%, for Jilin Chemical Fiber Co. Ltd. it is 10-20%, and for Yibin Group it is 5-15%.
9. The volume of imports from the subject country has increased in both absolute and relative terms.
10. Despite an increase in raw material costs, the import price from the subject country declined.
11. Due to dumped imports, the domestic industry was compelled to suspend production. While demand for the product increased, the domestic industry was unable to obtain remunerative prices and was consequently forced to suspend production on a significant number of machines during the period of investigation.
12. With the decline in import prices during 2023-24, the profitability of the domestic industry deteriorated sharply and turned into significant losses. These losses increased further during the period of investigation.
13. The domestic industry recorded a negative return on investment during the period of investigation.
14. The other known factors have not caused injury to the domestic industry.
15. The degree of fluctuation in import prices, along with growing demand in India, shows that the user industry is capable of passing on any increases in costs.
16. Imports of the product under consideration account for about 25,000 MT out of the total Indian demand of VFY is around 1,00,000 MT. Therefore, imposition of ant-dumping duties would have negligible impact.
17. The demand-supply gap in the country does not bar the domestic industry from seeking redressal from dumped imports, nor does it justify exports at dumped prices.