The move is aimed at guarding domestic players from the increase in imports that are subsidised by the neighbouring nation.
The investigation has been initiated by the Directorate General of Trade Remedies(DGTR), an arm of the commerce ministry.
Gujarat Fluorochemicals has filed an application before the DGTR alleging subsidisation of the product from China and requested for initiation of an anti-subsidy investigation for levy of countervailing duties on the imports.
The applicant has alleged that the producers/exporters of the product have benefited from the actionable subsidies provided at various levels by the Chinese government, including the governments of the different provinces and municipalities, the DGTR has said in a notification.
The alleged subsidies consist of direct or potential direct transfer of funds or liabilities.
The applicant has claimed that subsidised imports of the product are materially retarding the establishment of the domestic industry.
The authority prima facie finds “sufficient evidence” of subsidisation of the goods from China, injury to the domestic industry and causal link between the alleged subsidisation and injury exist to “justify initiation of an anti-dumping investigations” to determine the existence, degree and effect of subsidisation and to recommend the amount of countervailing duty,” it said.
There are various applications of Fluoroelastomers in sectors including industry, automotive and aerospace.
The period of investigation is January 2017 – December 2017 (12 months). It would also cover the data of 2014-17.
Countervailing duty is a country-specific duty, which is imposed to safeguard domestic industry against unfair trade subsidies provided by the local governments of the exporting nations.
India has already imposed countervailing duty as well as anti-dumping duties on various kinds of steel from China to protect domestic players, which are facing problems.
It is India’s one of the biggest trading partner, however, the trade balance is tilted in China’s favour.