The Directorate General of Trade Remedies (DGTR) of India has formally commenced a sunset review investigation regarding the ongoing imposition of anti-dumping duties on imports of woven fabric with over 50 percent flax—referred to as flax fabric—originating from or exported by China and Hong Kong. This investigation, part of the DGTR sunset review on flax fabric dumping, has been initiated at the behest of Grasim Industries Limited – Jaya Shree Textiles, which advocates for the domestic sector. The corporation has presented prima facie evidence indicating that the elimination of levies may result in the reemergence of dumping and harm to Indian manufacturers.
In 2009, India instituted anti-dumping charges on flax fabric imports from China and Hong Kong, subsequent to the identification of substantial dumping and resultant injury. These duties were prolonged via two prior sunset reviews in 2015 and 2020. The present evaluation is the third investigation, intended to ascertain if the expiration of the current duty could lead to ongoing or resumed dumping and harm to the domestic industry, as stated by the DGTR in a notification.
The initial results of the sunset review inquiry indicate multiple significant concerns. The dumping of woven flax fabric persists, with notable and substantial dumping margins recorded for both China and Hong Kong. The domestic industry has incurred financial losses due to heightened import volumes, ongoing price undercutting, and price repression, which have impeded its capacity to recuperate costs and obtain adequate returns.
It has been determined that imported and domestically manufactured items are technically and commercially interchangeable, categorizing them as ‘like articles’ under anti-dumping regulations. Furthermore, China is classified as a non-market economy, and the normal worth of the products has been determined based on the domestic producer’s expenses and justifiable profit margins.
The evaluation will examine imports from October 2023 to September 2024, while injury trends will be evaluated from April 2021 to March 2024. As the DGTR sunset review on flax fabric dumping unfolds, the future of this critical industry hangs in the balance, with significant implications for Indian manufacturers.
