Key Highlights:
- Supreme Court halts Gujarat High Court’s revival of anti-dumping duty on PTA.
- Reliance Industries, a major PTA producer, challenges duty removal.
- Government’s decision to lift the duty was criticized for lack of proper review.
On Tuesday, Reliance Industries Ltd faced a significant setback as the Supreme Court stayed a Gujarat High Court order that had reinstated an anti-dumping duty on imported purified terephthalic acid (PTA). PTA is crucial for the production of polyester-based products such as sportswear, jackets, and upholstery.
Supreme Court’s Decision:
The Gujarat High Court’s decision to revive the anti-dumping duty, initially imposed by the Union Government in 2019, had been a major concern for Reliance Industries. The Supreme Court intervened on Monday, halting the High Court’s order and requesting responses from Reliance and other involved parties.
Justice B.V. Nagarathna questioned the High Court’s authority to oversee economic policies, emphasizing that the 2019 notification on anti-dumping duties had expired and could not be retroactively applied.
Government’s Move and Reliance’s Stand:
The Union Government had removed the anti-dumping duty in February 2020, citing public interest and the need to support the man-made fiber textile industry. The duty’s removal, however, drew criticism from Reliance and other domestic producers who argued that it was done without adequate industry consultation and review.
Reliance Industries, the largest PTA producer in India with an annual capacity of 4.4 million tonnes, and other stakeholders had challenged this removal in court, asserting that it was unfair and detrimental to domestic industries. They highlighted that the absence of the duty would allow cheaper imports to flood the market, adversely affecting local production.
Economic Impact and Industry Concerns:
The Union Government’s affidavit to the Gujarat High Court indicated that the anti-dumping duty had led to high raw material costs for the domestic textile industry, resulting in lower capacity utilization in sectors like spinning and weaving. However, Reliance and other producers contended that the removal of the duty would negatively impact domestic production, leading to economic and operational challenges.
Legal and Industry Reactions:
During the Supreme Court hearing, Additional Solicitor General N. Venkataraman argued against the retroactive application of the anti-dumping duty, stating it was not permissible to collect duties retroactively from July 2019 to July 2024.
Reliance Industries and MCC PTA India Corp Pvt. Ltd. had initially sought protection from below-cost PTA imports that were harming the local industry. Despite the court’s intervention, the conflict underscores ongoing tensions between protecting domestic industries and balancing public and economic interests.
In summary, the Supreme Court’s decision is a crucial development for Reliance Industries, which has been actively seeking to safeguard its market position against unfair competition from imported PTA.
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