Context-The Anti-Dumping duty on Purified Terephthalic Acid (PTA) was abolished.

Mentioned in the budget:

• In order to generate textile production inside the country, in ‘public interest’, the abolition of Anti-Dumping duty on Purified Terephthalic Acid {known as PTA} was announced recently in the budget.
• It might be a great relief to the industry.

About PTA:

• PTA is a crucial raw material used to make various products, including polyester fabrics. 
• It is important for those who are in the manufacturing sector of man-made fabrics or their component – makes up for around 70-80% of a polyester product.
• Example products: Following are the products where the PTA were being used – Polyester staple fibre, spun yarn, sportswear, swimsuits, dresses, trousers, curtains, sofa covers, jackets, car seat covers and bed sheets.

Government Intention:

• Since the PTA is being used as a raw material, there has been rise in demand for the availability of the product at affordable price even if it imported.
• Since the Anti-Dumping duty was imposed on PTA, the importers were paying an extra $27-$160 for every 1,000 kg of PTA.
• Imports from: The raw material is being imported from the countries like China, Taiwan, Malaysia, Indonesia, Iran, Korea and Thailand.
• Since the abolition of the duty, it is easier to afford the chemical by providing $30 per 1,000 kg, according to industry executives.
• The anti-dumping duty on PTA was imposed after two domestic manufacturers, MCC PTA India Corp Pvt Ltd and Reliance Industries Ltd, approached the Directorate General of Trade Remedies (DGTR) in October 2013.
• The companies, which submitted that they accounted for over 50% of the domestic PTA industry, had argued that some countries had been exporting the product to India at prices lower than its value in their own domestic markets.
• This dumping of PTA into the Indian market had a “significant” adverse impact on the domestic industry, they argued.

Reason for the controversy:

• The domestic companies facing with limited domestic suppliers of PTA because of their costlier product less attractive for their domestic and international buyers. 
• During the time of low production {in 2014-16}, the total volume to be exported might be decreased and it increases the import.
• An increase in imports of the products they had been producing, as there was no safeguard against imports of cheaper versions of these downstream polyester-based products.
• other raw materials: The other raw materials, Mono Ethylene Glycol (MEG), another raw material used in the manufacturing of polyester, is currently the subject of another anti-dumping duty investigation initiated by DGTR recently.