Centre imposes duty on aluminium wires imports from Malaysia

The commerce ministry has recommended imposition of countervailing duty on certain types of aluminium wires from Malaysia for five years, a move aimed at guarding domestic players from imports that are subsidised by that country. The ministry's investigation arm Directorate General of Trade Remedies (DGTR) in its findings after a probe stated that imposition of definitive countervailing duty is required to offset subsidisation. "The authority recommends imposition of definitive countervailing duty...for a period of five years," DGTR said in a notification.

The authority considers it necessary to recommend imposition of the duty on the imports, it added. The finance ministry takes the final call on imposition of the duty. The directorate carried out the probe following complaints from Vedanta Ltd and Bharat Aluminium Company Ltd. They had filed a petition on behalf of domestic producers for initiation of anti-subsidy investigation. DGTR has concluded that the domestic industry has suffered injury due to subsidised products from Malaysia. It has recommended a duty of 6.87 per cent and 16.5 per cent.

Countervailing duty is a country-specific duty imposed to safeguard the domestic industry against unfair trade subsidies provided by the local governments of the exporting nations. Under the global trade rules of the World Trade Organization (WTO), a member country is allowed to impose anti-subsidy to countervailing duty if a product is subsidised by the government of its trading partner. These duties are trade remedies to protect domestic industry. Subsidy on a product makes it competitive in price terms in other markets. Countries provide this to boost their exports.