WORLD TRADE  
ORGANIZATION  G/SG/N/6/IND/17 
16 December 2008 
 (08-6155) 
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)
 
   The following communication, dated 11 December 2008, is being circulated at the request of 
the Delegation of India.   
 
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  G.S.R.  An application has been filed be fore 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 impor ts of Phthalic Anhydride into India to protect the domestic 
producers of Phthalic Anhydride against serious inju ry caused by the increased imports of Phthalic 
Anhydride into India.   
 
1. Domestic Industry  
 
The application has been filed by M/s Thirumalai Chemicals Ltd, Ranipet Tamilnadu, M/s. IG 
Petrochemicals Ltd Raigad Maharashtra, M/s. My sore Petrochemicals Ltd, Raichur Karnataka and 
M/s. SI Group India Ltd Navi Mumbai Maharashtr a for imposition of Safeguard Duty on imports of 
Phthalic Anhydride.  The appli cation has been made by four of the five domestic producers of 
Phthalic Anhydride in India accounting for 90 per cent of the total production.   
 
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 orga nic 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 G/SG/N/6/IND/17 
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  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 r unning 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 have  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-N ovember, leading to Zero capacity utilization 
of three plants 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 r unning at around 55 per cent of its capacity.  As a 
whole 77.5 per cent of existing capacity has zero per cent of capacity utilization.   
 
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 a nd then fell to 82 per cent during 2007-08.  In 
the first half of 2008-09, market share went dow n to 76 per cent.  As 77.5 per cent of capacity 
is already closed, the share of domestic produc tion in domestic consumption is likely to go 
down further.  The closures of following factor ies as mentioned below imply major reduction 
in domestic production.   
 
 Name of the Plant Date of Closure 
1. M/s Thirumalai Chemicals Ltd, 
Ranipet Tamilnadu 07.10.2008 
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 01.11.2008 
  G/SG/N/6/IND/17 
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  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, 
  G o l e  M a r k e t  
  New Delhi-110 001   INDIA   Telefax:  23741542/ 23741537   E-mail:  dgsafeguards@nic.in
 
 
 
 
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