India halts anti-dumping duties on Saudi polypropylene products

India has suspended its anti-dumping taxes on the import of Saudi polypropylene products. The move follows intense efforts made by the Saudi Ministry of Commerce and Industry in collaboration with Saudi exporting companies to change the Indian stance on the matter.

India recently imposed a tax of over 22 percent on Saudi polypropylene. India made the decision to levy the tax in June 2009 on a preliminary basis and in August 2010 on a final basis.

"The Indian announcement to freeze the tax comes after a series of communications between Minister of Commerce and Industry Abdullah Zainal Alireza and his Indian counterpart and the last communication was on Oct. 12. We sent a delegation to India in 2009 following the initial decision to impose anti-dumping taxes on the import of Saudi polypropylene products. The delegation had a number of meetings with the Indian authorities to get the temporary tax repealed," Muhammad Al-Kuthayri, undersecretary at the Ministry of Commerce and Industry for technical matters, said in a statement to the Saudi Press Agency on Monday.

Al-Kuthayri added the anti-dumping agreement of the World Trade Organization is governed by complex regulations and subject to stern procedures with the aim of preventing member countries to exploit them as a protectionist measure and upsetting the smooth movement of goods in the international market.

India decided to impose a duty ranging between $440 and $820 per ton on the Saudi product in August.

Abdul Rahman Al-Zamil, president of Saudi Export Development Center's (SEDC) executive council, had recently expressed his anguish over India imposing the tax on Saudi polypropylene. He described the Indian measure as "unreasonable."

According to Al-Zamil, India imposed anti-dumping taxes on Saudi polypropylene exports, saying it had cheaper feedstock. "The availability of cheap feedstock in the Kingdom is quite natural as a result of abundant local gas supply and the location of petrochemical plants closer to gas pipelines."

He said India took the measure after it had failed in its previous attempts to impose anti-dumping tax on Saudi products as a result of their competitive prices in Indian market.

He said Saudi Arabia's commerce, finance and foreign ministries had made a lot of efforts to convince New Delhi to change its "irrational" anti-dumping-tax decision. But India ignored them.

He pointed out that Saudi nonoil exports to India were valued at only SR180 million compared to huge Indian exports to the Kingdom, valued at SR18 billion. "Most Indian products are exempted from customs duty while some products pay a nominal five percent tariff."

Al-Zamil said Saudi Arabia had not imposed any customs duty on Indian products citing the reason of dumping despite the presence of potential reasons because of its desire to strengthen bilateral relations.