The Union finance ministry is likely to impose anti-dumping duty on import of antibacterial drug ciprofloxacin hydrochloride (HCL) from China to provide a level playing field for domestic industry vis-à-vis foreign manufacturers and exporters.
China accounts for 97.76% of the total imports of ciprofloxacin HCL in India. The drug is used to treat different types of bacterial infections, including skin infections, bone and joint infections, respiratory or sinus infections, urinary tract infections, and certain types of diarrhoea.
The Directorate General of Trade Remedies (DGTR), an investigation arm of Union ministry of commerce and industry, had initiated anti-dumping probe into import of antibacterial medicine from China in January this year following a complaint filed by Aarti Drugs which has 43 per cent share in total domestic production of ciprofloxacin HCL.
The complaint was supported by Godavari Drugs Limited, another producer of the product. Besides Aarti Drugs and Godavari Drugs, Aurobindo Pharma, Dr Reddy’s Laboratories, Neuland Laboratories, Emmennar Pharma, Sreepathi Pharmaceuticals and Sun Pharmaceutical Industries are some of the other producers of the antibacterial drug in India.
The DGTR has conducted anti-dumping investigation from April 2018 to June 2019. Over the years, import of the antibacterial drug from China has increased substantially. A total of 117 metric tonnes of ciprofloxacin HCL have been imported from China in 2015-16 followed by 171 metric tonnes in 2016-17, 217 metric tonnes in 2017-18 and 347 metric tonnes during period of investigation i.e. April 2018- June 2019.
Zhejiang Guobang Pharmaceutical Co. Ltd, Zhejiang Jingxin Pharmaceutical Import & Export Co Ltd, Zhejiang Langhua Pharmaceutical Co Ltd, Shangyu Jingxin Pharmaceuticals Co Ltd are some of the major Chinese exporters of ciprofloxacin HCL in India.
On the other hand, domestic industry’s antibacterial drug sale has declined over the years. The sale of ciprofloxacin HCL by domestic manufacturers stood at 908 metric tonnes in 2015-16, followed by 810 metric tonnes in 2016-17, 648 metric tonnes in 2017-18 and 1,007 metric tonnes during period of investigation which is an exception.
The DGTR in its preliminary findings recently concluded that the domestic industry has suffered price suppression on account of import of ciprofloxacin HCL from China. It has also led to low capacity utilization and losses of domestic manufacturers. Further, the return on capital employed of the domestic industry has become negative. The imports may impact the ability of the domestic industry to raise capital investments, it added.
With an aim to protect domestic industry, DGTR has recommended imposition of anti-dumping duty ranging from US$ 0.94 per kg to US$ 3.29 per kg in its preliminary findings. While DGTR recommends the duty, the finance ministry takes the final call to impose the same.
Commenting on dumping of Chinese ciprofloxacin HCL in India, Indian Drug Manufacturers’ Association (IDMA) executive director Ashok Madan said, “Anti-dumping duty will eliminate injury caused to the domestic industry by the unfair trade practices of dumping so as to re-establish a situation of open and fair competition in the Indian market, which is in the general interest of the country. Imposition of anti-dumping duty, therefore, would not affect the availability of the product to the consumers. The drug industry which used to import ciprofloxacin HCL from China at cheaper rate will buy it from domestic manufacturers after imposition of anti-dumping duty as there will be hardly any difference in cost of the product.”