WORLD TRADE  
ORGANIZATION  G/SG/N/6/IND/17/Rev.1 
19 January 2009 
 (09-0178) 
Committee on Safeguards Original:   English 
  
 
NOTIFICATION UNDER ARTICLE 12.1(A) OF THE 
AGREEMENT ON SAFEGUARDS ON INITIATION OF 
AN INVESTIGATION AND THE REASONS FOR IT 
 
INDIA 
 
(Imports of Phthalic Anhydride)
 
 
Revision  
 
 
 The following communication, dated 6 January 2009,  is being circulated at the request of the 
Delegation of India.    
_______________ 
 
 
NOTICE OF INITIATION OF A SAFEGUARD INVESTIGATION 
 
 [
Under Rule 6 of the Customs Tariff (Identif ication and Assessment of Safeguard Duty) 
Rules, 1997] 
 
 New Delhi, 28 November, 2008  No. D-22011/ 32/08  
 Sub:  Initiation of safeguard investigation concerning imports of Phthalic Anhydride 
into India  
 
 An application has been filed before me under Rule 5 of the Customs Tariff (Identification 
and Assessment of Safeguard Duty) Rules, 1997 by M/s. Thirumalai Chemicals Ltd, Ranipet 
Tamilnadu, M/s. IG Petrochemicals Ltd Raigad Maharashtra M/s. Mysore Petrochemicals Ltd, 
Raichur Karnataka and M/s SI Group India Ltd Navi Mumbai Maharashtra for imposition of 
Safeguard Duty on imports of Phthalic Anhydride into India to protect the domestic producers of 
Phthalic Anhydride against serious injury caused by the increased imports of Phthalic Anhydride into 
India.    
1. Domestic Industry 
 
 The application has been filed by M/s Thir umalai Chemicals Ltd, Ranipet Tamilnadu, 
M/s. IG Petrochemicals Ltd Raigad Maharashtra, M/s. Mysore Petrochemicals Ltd, Raichur Karnataka and M/s. SI Group India Lt d Navi Mumbai Maharashtra for imposition of 
Safeguard Duty on imports of Phthalic Anhydride.  The application has been made by four of the 
five domestic producers of Phthalic Anhydride in India accounting for 90 per cent of the total 
production.   
 G/SG/N/6/IND/17/Rev.1 
Page 2  
 
  2. Product Involved 
 
 The applicants have alleged serious injury caused to the domestic producers by the increased 
imports of Phthalic Anhydride into India.  Phthalic Anhydride classified under sub-heading 
No. 29173500 of Schedule I of the Customs Tariff  Act 1975, is the principal commercial form of 
Phthalic Acid.  It is produced by catalytic oxidation of Ortho-xylene (OX) with air or by the catalytic 
oxidation of naphthalene and is used  in organic synthesis of plastics (alkyd resins) and plasticizers, 
etc.    
3. Increased Imports 
 
 Phthalic Anhydride is imported into India fro m Republic of Korea, Indonesia, Israel, Taiwan 
and Pakistan.  The imports Pthalic Anhydride have shown an increasing trend in absolute terms as well as compared to the domestic production.  Th e imports and domestic production of Phthalic 
Anhydride during 2005-06 to 2008-09 (first six months) remained as under:   
 
Year Imports (MT) Domestic Production (MT) 
2005-06 24,092 1,91,637 
2006-07 14,133 2,22,959 
2007-08 31,441 2,44,429 
2008-09 
(First six months) 22398 1,13,614 * 
 
*  All plants of the applicants are closed except  one which is running partially from the month of 
October-November, leading to Zero capacity utiliza tion of three plants whic h constitute 155500MT of 
production capacity.  The partially closed unit has closed 50,000MT out of 110,000MT of production 
capacity.   
 
4. Injury 
 
 The increased imports of Phthalic Anhydride ha ve caused and are threatening to cause serious 
injury to the domestic producers of Phthalic Anhy dride as indicated by the following factors:   
  a) Production:  The domestic production which increased from 1,91,637 MT in 2005-
06 to 2,22,959MT in 2006-07 and further to 2,44,429 MT in 2007-2008 has fallen to 1,13,614 MT in 2008-2009 (First six months).  All plants of the applicants are closed 
except one which is running partially from  the month of October-November, leading 
to Zero capacity utilization of three plan ts which constitute 155500MT of production 
capacity.  The partially closed unit has closed 50,000MT out of 110,000MT of production capacity.   
 
b) Capacity Utilisation:   Out of the total capacity of 2,65,500 MT, accounted for by the 
applicant domestic producers, 2,05,500 MT has been shut down.  The capacity utilization of three plants has become zero.  One plant is running at around 55 per cent of its capacity.  As a whole 77.5 per cen t of existing capacity has zero percent of 
capacity utilization.   
  G/SG/N/6/IND/17/Rev.1 
 Page 3 
 
 
  c) Share of domestic producers in domestic consumption:  Market share of domestic 
producers has fallen significantly.  Applicants  had a market share of 81 per cent in 
2005-06 which increased to 90 per cent during 2006-07 and then fell to 82 per cent 
during 2007-08.  In the first half of 2008-09, market share went down to 76 per cent.  As 77.5 per cent of capacity is already closed, the share of domestic production in 
domestic consumption is likely to go down further.  The closures of following 
factories as mentioned below imply ma jor reduction in domestic production.   
 
 Name of the Plant Date of Closure 
1. M/s Thirumalai Chemicals Ltd, 
Ranipet Tamilnadu 7.10.2008 
2. M/s. SI Group India Ltd Navi Mumbai 
Maharashtra 11.10.2008 
3. M/s. IG Petrochemicals Ltd Raigad 
Maharashtra (partially closed) 25.10.2008 
4. M/s. Mysore Petrochemicals Ltd, Raichur 
Karnataka 1.11.2008 
 
5. The domestic producers have requested for imposition of Safeguard Duty on imports of 
Phthalic Anhydride for a period of four years.  Th ey have also requested for an immediate imposition 
of provisional Safeguard Duty in light of critical circumstances, leading to irreparable damage.   
 6. The application has been examined and it is  found that prima facie increased imports of 
Phthalic Anhydride have caused and are threatening to cause serious injury to the domestic producers 
of Phthalic Anhydride and accordin gly it has been decided to initiate  an investigation through this 
notice.    
7. All interested parties may make their views known within a period of 30 days from the 
date of this notice to:   
   The Director General (Safeguards) 
  Bhai Vir Singh Marg,   Bhai Vir Singh Sahitya Sadan:  2
nd Floor, 
  Gole Market,   New Delhi-110 001 
  INDIA. 
  Telefax:  23741542/ 23741537   E-mail:  dgsafeguards@nic.in
 
 8. All known interested parties are also being addressed separately.   
 9. Any other party to the investigation who wi shes to be considered as an interested party 
may submit its request so as to reach the Director General (Safeguards) within 21 days from the date of this notice.     (S. S. RANA) 
 Director General (Safeguards)  
  
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