The recent decision by the Indian Ministry of Commerce and Industry to impose anti-dumping duties on imports of polypropylene from the Kingdom of Saudi Arabia and Oman is unprecedented and in violation of the World Trade Organization (WTO) rules and regulations, according to Dr. Abdulwahab Al-Sadoun, Secretary General of the Gulf Petrochemicals and Chemicals Association (GPCA).
"India ignored the feedstock cost provided by Saudi Arabia and came up with its own overstated estimates of the production cost of polypropylene, even though the Kingdom's feedstock pricing mechanism is completely in compliance with WTO agreements – a fact that was independently verified at the time of the Saudi Arabia's accession to the WTO in 2005", said Dr. Sadoun. The Indian approach artificially inflated the normal value, leading to the determination of the anti-dumping margins, he added. He noted the methodology employed by India was in breach of the WTO Anti-Dumping Agreement and the WTO legislation on Prevention of Unfair Competition in Importation and that the Indian decision would be struck down by a WTO dispute settlement panel.
He stressed that the GCC region is not engaged in dumping in India or anywhere by any means. "On the contrary, we are strongly committed to enforcing our professional and moral obligations to the WTO and the global community at large."
"While the application of anti-dumping duties on polypropylene by the Indian government is intended to unfairly protect large Indian petrochemicals companies from global competition, especially during these tough times, there are many factors that suggest the support provided to these large industries will be at the expense of Indian downstream industries and average consumers," he emphasized.
In this context, he pointed out that the protectionist measure undertaken by India will artificially reduce competition in the Indian polypropylene market and strengthen monopolistic positions. Such an increase in the domination of large polypropylene producers will unilaterally disadvantage a wide range of crucial Indian downstream industries that use polypropylene in production and will make these industries less competitive both in the domestic and global markets. Higher costs incurred by the downstream industries will also lead to higher prices for average Indian consumers.
He cautioned that the economies of India and the Gulf are inextricably linked through networks of trade. Hence, putting up protectionist fences and impeding the flows of goods and services will unnecessarily increase frictions and reduce economic growth in these regions in the long term.
Dr. Sadoun indicated that GCC will take appropriate measures to put an end to this false dumping claim against GCC by resorting to a range of options available to them, including dispute resolution through the WTO dispute settlement system. To that end, the GPCA is consulting actively with governments in the GCC region.
