The government has found sufficient evidence that China is dumping a key medicine — ciprofloxacin hydrochloride — below cost in the Indian market and hurting the domestic pharmaceutical industry, two officials aware of the development said. The medicine is used to treat bacterial infections, including skin, bone, respiratory and urinary tract infections, and certain types of diarrhoea.
After a thorough investigation, the government has found that the volume of ciprofloxacin hydrochloride imported from China has increased significantly and at a pace that is undercutting prices in the domestic industry, the officials cited above said, requesting anonymity.
China alone accounts for about 98% of the total Indian imports of the medicine. “Domestic medicine had a price disadvantage of up to $3.3 per kg over Chinese products,” an official of a pharmaceutical association said on condition of anonymity.
Even as domestic manufacturing capacity of the medicine has increased, actual production and sales of local industry have declined and the market share of Chinese ciprofloxacin hydrochloride in India has increased, causing losses to the Indian pharma industry, the officials said.
“DGTR (Directorate General of Trade Remedies) on June 15 provisionally concluded that the domestic industry has suffered material injury and its preliminary findings favoured the imposition of an anti-dumping duty on Chinese import,” one of the officials said. DGTR may take a final view on the matter after hearing all interested parties again next month, he added.
DGTR, previously known as the Directorate General of Anti-dumping and Allied Duties, is an arm of the ministry of commerce and industry and acts as a single-window agency providing a level playing field to domestic industry against unfair trade practices.
The finance ministry will consider imposing an anti-dumping duty on the Chinese medicine if DGTR recommends such a step, the second official cited above said. DGTR had initiated the investigation against the dumping of ciprofloxacin hydrochloride from Chine in January after domestic manufacturers accused the neighbouring country of engaging in an unfair trade practice.
Dumping is an unfair trade practice that entails the export of a product at a price lower than its value and is countered by a punitive duty, which is an acceptable measure under multilateral trade agreements, the second official said. Complaints have been received by domestic industry that China was dumping severalproducts . All such complaints are being investigated, he said.
HT reported on May 11 that India could extend anti-dumping duties and safeguards on more than two dozen Chinese goods ranging from calculators and USB drives to steel, solar cells and Vitamin E amid concern that a flood of imports would kill domestic manufacturers who will lose duty protection soon against such products. Anti-dumping duties on these products were imposed five years ago and are expiring this year.
India has taken a tough position against unfair Chinese trade practices as it is committed to protecting domestic industry under the government’s Make in India campaign, the officials said. India-China bilateral trade is heavily tilted in favour of China. According to trade figures released by the General Administration of Customs of China (GACC) in mid-January 2020, India’s trade deficit with China was $56.77 billion in 2019; bilateral trade amounted to about $92.68 billion last year, a 1.6% annual increase.
“Dumping of goods below their actual cost harms the domestic industry, and anti-dumping duty is one of the means to protect local manufacturing from such unfair trade practices,” Indian Drug Manufacturers’ Association (IDMA) executive director Ashok Madan said.