Anti-dumping duty on import of Amoxycillin from China should continue, says commerce ministry

The Union commerce ministry has recommended further continuing anti-dumping duty on semi-synthetic antibiotic drug amoxicillin trihydrate imported from China. The ministry recommends doing so for five years to protect domestic manufacturers from these cheap imports.

The ministry’s investigation arm Directorate General of Trade Remedies (DGTR), said in a notification on February 15, 2022, that it is likely that the dumping of amoxicillin trihydrate from China might be continued if the anti-dumping duty is not maintained, and that will injure small domestic players.

The Directorate General of Trade Remedies (DGTR) thus recommended the imposition of anti-dumping duty on import of the product from China for five years. The duty that is recommended duty is USD 1.96 per kg.

The finance ministry must take the final decision on the issue. Directorate General of Trade Remedies (DGTR) ‘s probe has concluded that sufficient evidence indicated that the cessation of the anti-dumping duty at this stage would not resolve anything as China may just continue to dump and thus injure the domestic industry.

The Central Board of Excise and Customs (CBEC) had first imposed definitive anti-dumping duty on May 16, 2017, or five years.

There are eight producers of amoxicillin trihydrate in India. One of them, Aurobindo Pharma, applied on behalf of the domestic industry to review existing duties on imports of the product from China. It must be noted Aurobindo’s production accounts for nearly a third of the Indian production.

The application was supported by other firms like Penam Laboratories Ltd and Centrient Pharmaceuticals India Pvt Ltd. They also alleged that China continued dumping amoxicillin trihydrate even after impositing the anti-dumping duty. The applicant has now requested the  Directorate General of Trade Remedies (DGTR) to extend the anti-dumping duty imposed on importing the drug from China.

Aurobindo Pharma claimed in the application that “The central government is making significant efforts to make the Indian drug industry self-reliant. Production linked incentive introduced by the government aims to promote domestic production of active pharmaceutical ingredients, key starting materials, drug intermediates, and Amoxicillin is one of the eligible API and penicillin-G and 6-APA as the key starting materials/drug intermediates. If duties are not extended, then Chinese producers will dump in the country, which will not only threaten the viability of Amoxicillin, but all efforts going towards backward integration would also fail,”  

The committee on drug security that the department of pharmaceuticals constituted has identified Amoxicillin among 53 APIs for which India is heavily dependent on imports. 

The ministry of chemicals and fertilizers has approved a 15,000 metric tonnes plant of penicillin G from Aurobindo that is estimated to be worth Rs. 1,392 crore.

The investigation by the Directorate General of Trade Remedies (DGTR) was conducted for a period of one year starting from April 1, 2020, to March 31, 2021, while injury analysis covered the period from April 2017 to March 2020.

The Directorate General of Trade Remedies (DGTR) also observed that the landed price of the imports from China is well below the selling price of the domestic industry for the period of investigation, which is likely to severely undercut the prices of the domestic sector if the duty was ceased.

Anti-dumping duty, in general, is imposed with the express purpose to save the domestic industry from the unfair trade practice of dumping. With a general anti-China atmosphere of the country and China’s history of such unfair trade practices, the finance ministry is likely to accept the recommendation.