In the global trade system, anti-dumping, as a form of trade protection, is often utilized by governments worldwide to safeguard their domestic industries. However, when this measure is excessively or improperly employed, it can lead to trade wars and instability in the global market. From 1995 to 2023, the total number of anti-dumping cases imposed on China globally reached a staggering 1,614. Among these, India topped the list with 298 cases, surpassing traditional trade giants like the U.S. and the EU. This is not just a number but reflects India’s vigilance and concerns regarding Chinese products. In India’s anti-dumping investigations against Chinese exports, the top three industries targeted are chemical raw materials & products, pharmaceuticals, and non-metallic products.
Regaring chemical raw materials, India has long been employing anti-dumping strategies against Chinese polyether polyols.
In 2003, India initiated an anti-dumping investigation on polyether polyols originating from China, South Korea, and Taiwan; in November 2004, India made an affirmative final ruling on this case.
In 2009, India’s Ministry of Commerce and Industry (MoCI) made a final ruling of the anti-dumping sunset review on polyether polyols originating from China, South Korea, Taiwan, and Brazil, imposing a minimum price undertaking of USD 2,601/tonne.
On August 28, 2014, India initiated a second sunset review investigation on the same case.
In 2015, India made a sunset review final ruling on polyether polyols originating from China, South Korea, and Taiwan, recommending the withdrawal of anti-dumping measures due to the withdrawal of appeals against the investigation into these products’ origins.
On March 28, 2024, MoCI issued a notice, affirming the imposition of anti-dumping duty on Flexible Slabstock Polyol of molecular weight 3000-4000 originating from or imported from China and Thailand. It recommended a definitive anti-dumping duty of USD 534/tonne on import of flexible slabstock polyol produced by Wanhua Chemical Group in China. For other Chinese producers the recommended anti-dumping duty was USD 608/tonne. In the case of Thailand, it recommended anti-dumping duty of USD 470/tonne on import from GC Polyols Company Ltd and USD 480/tonne for other producers.
As two of the world’s largest economies, trade relations between China and India have always been closely watched. Under the downward pressure of global economy and the rise of trade protectionism, some countries are adopting more conservative trade policies. India’s anti-dumping investigation into polyether polyols from China is a response to this trend.
On one hand, India’s economy is rapidly developing, with increasing demand for polyether polyols in sectors like construction and automotive manufacturing. However, India’s domestic capacity for polyether polyols is limited, leading to heavy reliance on imports to meet market demands. On the other hand, China faces an increasingly pressing issue of excess polyether polyol capacity. Suppliers are actively seeking overseas expansion to address this overcapacity. India, as a major importer of chemical products, is bound to be a significant destination for China’s polyether polyols exports.
However, the export growth of polyether polyols from China has had a certain impact on the Indian market. On one hand, India has relatively low self-sufficiency in basic raw materials such as crude oil, ethylene, and styrene. Issues such as poor infrastructure leading to unstable power supply, congested transport systems, and inadequate port facilities highlight constraints on the development of local polyurethane chemical industry. India only has two polyether polyol facilities - Manali Petrochemicals and Expanded Incorporation - with a total capacity maintained at 77ktpa. Indian polyether polyol producers face competitive pressures from Chinese counterparts, which could potentially seize the market and even affect the survival of some small and medium-sized enterprises. On the other hand, the influx of a large amount of Chinese exports may lead to an oversupply of polyether polyols in India, triggering price competition and market turmoil.
India has imposed anti-dumping measures to address the impact of Chinese polyether polyol exports. Through measures like anti-dumping duties, the Indian government aims to protect domestic industries from excessive competition from foreign products. However, anti-dumping measures may not be the best solution to the problem. While they may temporarily alleviate pressure on the domestic industry in India, they could lead to more trade disputes and market instability in the long run. More importantly, this approach could damage trade relations between China and India and even affect cooperation between the two countries in other areas.
Therefore, resolving the trade dispute over polyether polyols between China and India requires efforts from both sides. Chinese exporters should focus on improving product quality and technological levels to enhance the core competitiveness of their products to win the trust of Indian consumers. Meanwhile, India should vigorously promote the development and innovation of the domestic chemical industry, increase the competitiveness of local enterprises, and reduce dependence on imported products. Furthermore, both countries should enhance communication and cooperation to find the best way to resolve the issue through dialogue and negotiation.
In the context of global economic integration and trade liberalization, trade relations between China and India are particularly important. Handling the polyether polyol trade dispute with a rational and pragmatic approach can not only protect interests of the two countries but also be essential for the healthy development of the global chemical industry.
