Anti-Dumping Measures and Economic Impact

Current Situation

Industry associations and government ministries in India are advocating for a pause on anti-dumping investigations into several chemical intermediaries due to price surges and shortages fueled by the West Asian conflict.

• In April, the government exempted import duty on 40 petrochemical products to ensure domestic supply.
• The Textile Ministry has requested a halt on anti-dumping investigations related to elastomeric fibre yarn and viscose rayon filament yarn.

Trade Policy and Anti-Dumping Measures

The chemical manufacturing sector in India is highly protected through anti-dumping measures, primarily targeting Chinese products.

• 51% of anti-dumping measures target chemical industries, with China being a major subject.
• From January 2021 to June 2025, India notified 226 anti-dumping investigations.

Domestic Production and Dependency

The Department for Promotion of Industry and Internal Trade (DPIIT) has urged the petrochemical industry to increase domestic production of highly import-dependent items.

• These items account for over $50 billion in annual imports.
• Most listed items are intermediate products used in various sectors such as automotive and textiles.

Economic Challenges for MSMEs

There's a significant divide between large manufacturers and MSMEs concerning anti-dumping duties, which often lead to higher input prices for small businesses.

• Niti Aayog reports that chemicals are integral to 80,000 downstream products in India.
• Industry voices argue that anti-dumping duties and QCOs are politically motivated.

Structural Challenges in the Chemical Sector

India faces structural challenges in its chemical sector due to its reliance on cheap imports from China.

• India had a $31 billion trade deficit in chemicals, with imports worth $75 billion.
• The chemical sector is expected to grow significantly, with market size projections reaching up to $1,000 billion by 2040.

Global Competitiveness

India's participation in the global chemicals market is relatively small despite being a significant producer.

• India accounts for only 3 to 3.5% of global chemical consumption.
• There's a greater focus on upstream, large-volume outputs, limiting diversification into specialty chemicals.

Strategic Recommendations

To enhance global competitiveness, strategic interventions are necessary within India's chemical industry.

• There is a need to diversify into high-value downstream products.
• Aligning with international trends could unlock the sector’s full potential.