Indian Chlor-Alkali players have revealed that it may take longer than expected for the domestic Chlor-Alkali demand to reach pre-Covid levels. Market players believe that the present duty levels of 7.5% over Caustic Soda imports have put a negligible impact on the imported volumes. Moreover, the expiration of anti-dumping duty (ADD) over imports from several countries have exposed the local industry to greater risks at the time of crises.

As per the recent trade statistics, the Caustic Soda import volumes have significantly risen in the past few months. On Dec. 17, 2020, commerce ministry's investigation arm, Directorate General of Trade Remedies (DGTR) had issued a notification regarding initiation of anti-dumping probe on the Caustic Soda imports from Japan, Iran, Qatar and Oman.

The move was in response to the plea filed by the Alkali Manufacturers Association of India that alleged that low priced imports from these countries are causing material injury to the domestic industry and are hence affecting the profitability of local producers. The Indian government notified on 19^th January to push back the deadline it had initially set to receive responses regarding the investigations from producers/ exporters/importers/users of Caustic Soda by 28 days to Feb. 19.

Commenting on the current scenario, some market sources are of the view that the country's Caustic imports may significantly fall in the coming months if adequate government intervention is done on the matter. While some downstream aluminium producers have urged the Centre to reduce the customs duty on critical raw materials like raw petroleum coke, caustic soda and alumina to favor the already hurt consumers.

As per ChemAnalyst,” The Indian Chlor-Alkali industry possesses enough capacities to cater to its entire domestic demand. With more capacities scheduled on cards, the Indian government would have to strike out a balance by increasing protection for the locally produced chemicals and at the same time releaving pressure from the downstream industries to support larger manufacturing of goods. This would require thorough rationalization of duties on various products that can help push the domestic manufacturing.”