New Delhi: The Directorate General of Trade Remedies (DGTR) will initiate safeguard investigation to determine if import of synthetic rubber from South Korea was harming the domestic manufacturers. Reliance Industries, the sole manufacturer of the rubber in India, had pleaded with the body that imports of ‘polybutadiene rubber’ were harming the local industry. The rubber is used to make tyres.
DGTR felt there is prima facie evidence to justify initiation of the safeguard investigation, according to a release posted on its website. The period considered for the purposes of present investigation is from April 2015 to June 2019.
RIL claims that imports of the product have increased in absolute terms as well as in relation to production and consumption in India. DGTR said it is noted that there is significant increase in imports of synthetic rubber in recent period. The rate of increase in imports of subject goods is considered significant considering the duration, the quantum, the total imports and the consumption in India, it said.
Interested parties will have 30 days to file their responses the DGTR notice. Such exercises undertaken by the DGTR usually take a year to complete.
Polybutadiene rubber (also referred to as PBR) is a synthetic rubber that is a polymer formed from the polymerization of the monomer 1,3-butadiene. It is used in the manufacture of tyres mainly and is also used as an additive to improve the mechanical strength of plastics such as polystyrene and acrylonitrile butadiene styrene.
The product is produced in more than one grade. RIL has identified five grades, differentiated on the basis of the catalyst used in production. As per the company, the grades may be identified as: neodymium, cobalt, nickel, titanium and lithium. It does not produce two grades, ie, titanium and lithium.
DGTR falls under the department of commerce in Ministry of Commerce and Industry and its recommendations are final.
India has a free trade agreement with South Korea called the Comprehensive Economic Partnership Agreement (CEPA) and the increase in imports is a fallout of that. India had a trade deficit of $5 billion in 2009-10 with South Korea and CEPA became effective on 1 Jan, 2010. The deficit has since jumped to $12 billion as of 2018-19.