India Increases Anti-Dumping Duty On Chinese Fumed Silica

New Delhi, Aug 13 (KNN) India's trade regulatory authority has raised anti-dumping duties on untreated fumed silica imports from a Chinese manufacturer after determining that the company was circumventing existing protective measures.

The Directorate General of Trade Remedies (DGTR) concluded that Shandong Dongyue Silicone Material had been absorbing previously imposed anti-dumping duties by reducing export prices, thereby undermining the intended market protection for domestic producers.

The revised duty structure imposes a rate of USD 1,296 per metric tonne on Shandong Dongyue, representing a substantial increase from the previous rate of USD 1,018 per metric tonne.

This adjustment is expected to elevate the landed cost of Chinese fumed silica in the Indian market, potentially creating more favourable conditions for domestic manufacturers.

The enhanced duties will remain in effect unless successfully challenged through legal proceedings.

The regulatory action stems from a comprehensive anti-absorption review investigation launched on December 31, 2024.

The investigation was initiated following allegations by Indian manufacturer Cabot Sanmar Limited, which claimed that the Chinese exporter had systematically reduced its pricing to neutralise the impact of anti-dumping duties originally implemented in November 2021.

The initial anti-dumping measures on untreated fumed silica imports from China and South Korea were established following a 2020 investigation that documented evidence of dumping practices and resulting harm to Indian producers.

The product, a synthetic amorphous silica, serves as a critical component in various industrial applications including silicone sealants, coatings, adhesives, and pharmaceutical products.

During the review period spanning July 2023 to June 2024, DGTR analysis revealed that Shandong Dongyue's export prices to India decreased by 30.5 percent, a decline significantly steeper than the company's cost of sales reduction of 22.7 percent and price decreases in other export markets of 24.1 percent.

This pricing pattern, combined with rising raw material and utility costs exceeding 18 percent in some cases, suggested a deliberate strategy to offset duty impacts through price manipulation.

The Chinese exporter disputed these findings, attributing price reductions to global market conditions including oversupply, reduced post-pandemic demand, and currency fluctuations.

The company also argued that its product carried lower commercial value compared to other market grades. However, Indian authorities and domestic producers countered that the price decline specific to India exceeded reductions in other markets and could not be justified by global cost trends.

Following its assessment under the lesser duty rule principle, the DGTR finalised its recommendation to increase duties for Shandong Dongyue while maintaining existing duty structures for other Chinese producers, with the exception of Wacker Chemicals Fumed Silica (Zhangjiagang), which continues to benefit from zero-duty status. South Korean producer OCI also retains its duty-free classification.

The modified duty regime will remain effective until November 10, 2026, maintaining consistency with the original five-year implementation period established in 2021.

(KNN Bureau)