The Designated Authority (DA) on anti-dumping in the Ministry of Commerce initiated a series of investigations on nylon filament yarn and fully oriented polyester filament yarn by a series of notices issued on 4 July and 27 June. The producers way that dumping actions at prices below those prevailing in their own countries from China and other ASEAN countries has caused injury to them. The DA found merit in the allegations and launched investigations, two probes which are likely to result in protective duties equivalent to the dumping margin to stop price under cutting.

Nylon filament yarn

In the nylon filament yarn (NFY) case, the probe covers yarn specifications suitable for consumer goods like hosiery and saris. Industrial yarn of the high tenacity kind or for tyre cord fabric in the auto industry is excluded. (Earlier attempts on Nylon Tyre cord from ASEAN and East Asia by SRF, the industry leader, did not find favour with the DA). Now the four producers of textile quality NFY - Modipon, JCT, Shree Synthetics and GSFC - have moved the DA for justice. Century Enka has provided outside support to the four party coalition while Baroda Rayon has taken a position of neutrality. China, Taiwan, Malaysia, Indonesia, Thailand and Korea are named as the main aggressors.

One can reasonably expect stiff duty on the yarn in the next six months. The likelihood is highest in the case of China where the normal price is to be constructed on the basis of assumed costs which will yield a high dumping margin given the use of the high cost USA as the country of comparison! Our investigations show that the imports of NFY for textile industry is a few crores which too will dry up following the protective duty.

International prices of NFY have risen by minimum 30 percent in the last four months in the wake of the spiral in global crude prices and the cascading effect down the line on petroproducts in the caprolactam-nylon 6-NFY chain. The audit price protects the value addition in the domestic sector which sources caprolactam domestically from GSFC and others. The customs duty of 15 percent too is quite steep and adds to the effect international price protection.

The anti dumping duty measure will be another protective layer at the cost of the users in the downstream textile industry who must face competition in the global market on the foundation of artificially high price filament yarn.

Polyester filament yarn

In the parallel episode in the anti dumping soap opera, six producers, some of them are in the NFY episode as well, of fully oriented polyester yarn, known in trade as fully drawn yarn, have asked for protection from dumped yarn from Taiwan, Korea, Malaysia and Thailand origin. Welspun Gujarat, Century Enka and Garden Silk are the prominent applicants but the giant Reliance is not in the picture. The hero behind the scene and may appear on stage at the appropriate time. The PFY application has been accepted by the DA and investigations proceedings initiated on 27 June.

It may be recalled that partially oriented polyester (POY) yarn is already under the cover of anti dumping after the Reliance led petition succeeded with the DA. Polyester staple fibre (PSF) is the only prominent textile intermediate now outside the anti dumping circle in the polyester segment. In this case, the spinners were able to beat back Reliance in a series of writ petitions before the High Courts.

The arguments of rising international prices, high protection and significant value addition in the upstream in the NFY case also apply in the fully drawn polyester case. However, the matter is more serious here since polyester is the main fibre in the synthetic industry and government created tariff walls of a semi permanent nature will distort the affairs of the industry for a long time to come. The government should think seriously from the public interest point of view before imposing the anti duty burden on the back of the growing down stream fabric industry.

Saccharin

The battle over the market for the sweet tooth has moved to Saccharin from sugar where the high protective duties and bogus duty free licences in the name of export production coexist with spiralling domestic prices. On 4 July, the DA has accepted the petitions of three producers in Mumbai and Gujarat and initiated dumping investigation on saccharin, the artificial sweetener widely used in the food, beverage and pharma industry. China is the only exporter named in the investigation. As usual, the normal value to arrive at the domestic price in the land of the dragon will be constructed artificially on  the basis of the so called international costs to make sure that the investigation yields positive findings in favour of the three producers.

It is noteworthy that the food industry, inspite of the wide production base, is losing its low cost character due to the application of restraints in the name of protection. Thus the prices of sugar, and saccharin, are artificially high. Edible oil is under near 100 percent duty protection. Fuel is controlled by the public sector companies working in tandem with Reliance. It is no wonder that exports in June are up by only 14 percent and the gallopping growth of the earlier months seems to be faltering. Liberalization and opening out of the economy is hardly the agenda today, the object is to create new generation hurdles which will give protection to the primary and intermediate producers and also give business to officials and lawyers.

Airport infrastructure

Access to a working telephone is a fundamental right in sensitive areas like airport reception. Yet in the departure and arrival lounge of the Mumbai and Delhi domestic airports, there is only one working telephone operating at the rate of one minute for each one rupee coin! So much for service level to the user who pays separately for passenger and security services to the public airport authority!