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In separate representations to the Finance Minister, Revenue Secretary and the PMO, industry associations Aluminium Association India (AAI) and Federation of Indian Mineral Industries (FIMI) have called for an urgent halt to the ongoing deliberations to impose anti-dumping duties on the import of caustic soda from Japan, Qatar, Oman and Iran.

The plea by the domestic user industries have been raised in reference to the DGTR recommendations for Anti-Dumping investigations concerning imports of ‘Caustic Soda’ originating in or exported from the four nations.

Caustic Soda is a key ingredient for multiple large, medium, and small industries in India, including textile, soap & detergent, and alumina producers.

The consumer industries rely on imports as the domestic caustic industry is unable to cater to the bulk requirements for some sectors, which range in shipment sizes of 8000MT (million tonnes) to 10000MT.

These industries are also dealing with high tariff barriers through the presence of an inverted duty structure, with caustic soda attracting a 7.5% basic custom duty while alumina attracts a 5% import duty.

Imports of Caustic Soda in India are already restricted through various tariff and non-tariff barriers. Any additional tariffs might help just one segment of the domestic industry, but likely result in irrevocable collateral damage to multiple key sectors, including Textiles, Soap & Detergent, Pharmaceuticals, Aluminium, Drugs Manufacturers, etc., the associations have said.

Adding to the challenge are the separate production and consumer centres that affect operations, they added.

While the major caustic soda producers in India are based in the western states of Gujarat, Maharashtra and Rajasthan and cater largely to consumers in their vicinity, the large alumina producers are concentrated to the eastern part of India, in states such as Odisha, Andhra Pradesh, Karnataka & Jharkhand. This makes transport of caustic soda by road or rail unfeasible as well as leading to safety concerns for bulk transportations via road.

Post imposition of the mandatory BIS license for Caustic Soda imports, almost 95% of foreign Caustic Soda producers are already eliminated because they have not acquired the requisite BIS license for exporting Caustic Soda to India.

As per data from Ministry of Industry and Commerce, there has been a significant decline in Caustic Soda imports, even less than during the pre-Covid period. During the current fiscal year 2022, total imports declined by 45%, imports from subject countries declined by 23%, as compared to pre-covid period, despite full capacity utilization of major consumers like Aluminium and other consumer industries of textiles, soap & detergent.

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