India: DGTR proposes anti-dumping duties on Chinese aluminium foil

The Directorate General of Trade Remedies (DGTR) has proposed provisional anti-dumping duties on aluminium foil imports from China, following concerns from domestic producers such as Hindalco. These duties, ranging from $653/tonne (t) to $873/t depending on the Chinese producer, are subject to final approval by the Ministry of Finance.

An anti-dumping investigation was initiated in March 2024, focusing on aluminium foil up to 80 microns thick and excluding foil thinner than 5.5 microns used in non-capacitor applications. It covered the period from October 2022 to September 2023. Previously, anti-dumping duties had been imposed in 2015, but they lapsed in March 2022, leading to a surge in imports from China, which, domestic producers argue, has negatively impacted the local industry.

DGTR's findings reveal that Chinese aluminium foil, sold below market value, captured a 30% share of the Indian market despite sufficient domestic production capacity. Domestic production during the review period was 69,572 t, from a total capacity of 132,140 t.

Domestic consumption of aluminium foil increased by 106%, but imports from China surged by 178%, while local producers' sales grew by only 29%. The influx of low-priced imports forced Indian producers to reduce their prices below production costs, resulting in financial losses and stunted growth. Certain types of aluminium foil, including those used for beer bottles, insulation, and tea bags, were excluded from the investigation.

The assessment of demand and imports reveals that amid the steady rise in demand for the product in India, imports from China increased by a dramatic 2.78X during the period of investigation (POI) compared to the base year. Imports from China alone jumped from 22,213 t in 2019-20 to 61,745 t in the POI, significantly impacting the domestic industry. While total imports rose from 66,235 t to 94,033 t over the same period, Chinese imports accounted for 66% of the total during the POI, up from 34% in 2019-20.

Although the domestic industry's market share improved from 17% in 2019-20 to 25% in the POI, the share of subject imports also increased from 15% to 31%. Overall demand in India grew from 145,726 t in 2019-20 to 196,266 t in the POI, while installed capacities expanded from 146,973 t to 289,735 t. Subsequently, the demand-supply gap widened to 93,469 t over the POI, highlighting a significant imbalance between supply and demand due to the influx of imports.

The DGTR concluded that the rise in Chinese imports and its impact on market dynamics justified the proposed provisional duties to protect the Indian aluminium foil industry.