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Commerce ministry recommends imposition of anti-dumping duty on ATS-8 imported from China
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Laxmi Yadav, Mumbai
August 05 , 2022
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The Union commerce ministry has recommended imposition of anti-dumping duty on ATS-8, a chemical used in the drug industry imported from China with an aim to provide a level playing field for domestic industry vis-a-vis foreign manufacturers and exporters.
ATS-8 is also known as 4R-Cis-1, 1-Dimethylethyl-6-cynomethyl-2, 2-dimethyl-1, 3-dioxane-4-acetaate.
ATS-8 is a key intermediate for manufacture of Atorvastatin active pharmaceutical ingredient. Atorvastatin drug formulation is widely used to treat the lowering of excess cholesterol in human beings, which can otherwise lead to cardiovascular problems like heart attack and stroke, if not treated. This is a lifesaving drug finding classification under the National List of Essential Medicines (NLEM). The intermediate is manufactured in the form of bulk powder by the company and does not have any separate grades or type.
Arch Pharmalabs filed an application before the ministry's investigation arm Directorate General of Trade Remedies (DGTR) seeking an anti-dumping probe concerning imports of ATS-8 from China. The applicant, the sole producer of ATS-8 alleged that the dumping of the chemical has affected the domestic industry. ATS-8 is only produced in India and China, stated the applicant.
The DGTR on August 2, 2021 initiated anti-dumping investigation based on the data and information provided by the domestic industry, after prima facie satisfying itself that there is sufficient evidence of the dumping, injury and the causal link.
The directorate conducted an investigation from April 1, 2020 to March 31, 2021. The examination of trends in the context of injury analysis covered the periods from April 2017 to March 2020 and the period of investigation.
The DGTR in its final findings on August 1, 2022 observed that barring 2019-20, the import of ATS-8 from China has increased over the years. A total of 397 metric tons (MT) of ATS-8 have been imported from China in 2017-18 followed by 431 MT in 2018-19. However, the import of Chinese chemical declined to 303 MT in 2019-20 and this increased to 446 MT during the period of investigation i.e. April 2020 to March 2021.
The directorate stated that domestic industry is suffering low-capacity utilization and losses on account of import of the product from China.
“The domestic industry suffered injury on both volume and price fronts due to dumped imports from China. The market share of the domestic industry declined significantly in the period of investigation and capacity utilization was below par. The landed prices of imports had continuously and significantly increased throughout the injury period, except for the reduction in the period of investigation. The dumped imports forced the domestic industry to keep the net sales realization much below the landed price. This has caused financial losses to the domestic industry and its return on capital employed was negative during the investigation and injury period,” it added.
With an aim to protect domestic industry, DGTR has recommended imposition of an amount of USD 119.21 per metric ton as an anti-dumping duty on ATS-8 imported from China.
Drugmakers raised concerns over the directorate’s recommendation of anti-dumping duty imposition on import of Chinese chemical, saying that the price of the finished Atorvastatin Formulation is controlled by the Drug (Prices Control) Order, 2013 and they will have to bear the burden of anti- dumping duty.
Responding to them, DGTR said “The price increase as per the DPCO is also very minimal and is based on the Wholesale Price Index of 0.53568 per cent from 2020 to 2021. Therefore, such an increase will not cover the increase in costs due to the anti-dumping duty. AIS-8 may account for a meagre 1.5 per cent to 2 per cent cost of Atorvastatin drug and any anti-dumping duty will have only very minuscule effect on the end drug as the cost of intermediate in such drug as such is very small. The general public will not be impacted on account of ADD in any significant manner. At the same time ADD will ensure continued existence of the domestic industry which shall ultimately be in the benefit of users in India.”
While DGTR recommends the duty, the finance ministry takes the final call to impose the same.
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