Govt initiates Anti-Subsidy Investigation on MDF imports

Govt initiates Anti-Subsidy Investigation on MDF imports

The Directorate General of Trade Remedies (DGTR) has initiated Anti-Subsidy Investigation concerning imports of MDF from Indonesia, Malaysia, Sri Lanka, Thailand and Vietnam. Greenply Industries Limited/ Greenpanel Industries Limited, Century Plyboards (India) Ltd. and Rushil Decor Limited had filed an application on behalf of domestic industry requesting for initiation of an anti-subsidy investigation for levy of countervailing duties on the imports of the subject goods, originating in or exported from these countries.

Indian producers of MDF have alleged that the producers/exporters from these countries have benefitted from the actionable subsidies provided at various levels by the Governments of the subject countries, including the government of different provinces and Municipalities in which producers/exporters are located, and other ‘Public bodies.’ DGTR prima facie has found evidence of existing of counter available subsidies.

India imports around 30% of total requirement from most of these countries. Rest is supplied by domestic players. Imports are extremely competitive at coastal areas of west/south and Greenpanel and Rushil are the largest players in this market.

Imports are extremely competitive at coastal areas of west/south and Greenpanel and Rushil are the largest players in this market (prices are ultimately compared/benchmarked against import parity). Nonetheless, northern players too shall benefit if ADD materialises.

If it is established that subsidies by these nations is impacting the domestic industry, DGTR will recommend the amount of countervailing duty, which if levied, would be adequate to remove the injury to the domestic industry. MDF is a type of engineered wood product that is made out of wood fibres.

If one tracks growth history of other emerging markets, MDF in India has a bright future. Take the case of China where MDF made late entry as compared to plywood and today MDF and particleboard have surpassed plywood in terms of volume. While the plywood’s total volume in China today is around 17 million cubic meters MDF and particleboard joint volume is five times of this capacity. On the other hand, the present total volume of plywood in India is around 10 million cubic meters and MDF and particleboard together is less than 2 million cubic meters which means latter has lot of ground to cover in the coming years. So, the growth prospects for MDF in the country is much higher than that of plywood.  No wonder India is on the radar of Asian exporters of MDF.

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