India slaps anti-dumping duties on Chinese pretilachlor – what it means for agrochemical players

The Directorate General of Trade Remedies (DGTR), under India’s Ministry of Commerce & Industry, has recommended the imposition of anti-dumping duties on imports of Pretilachlor (in technical and formulation forms) and its key intermediate PEDA (2,6-Diethyl-N-(2-propoxy ethyl) aniline) originating from China PR.

The decision comes after a detailed investigation initiated in response to a petition filed by India Pesticides Limited, the sole domestic producer of PEDA and a major manufacturer of Pretilachlor-based herbicides in India. The investigation revealed significant dumping by Chinese exporters, leading to severe financial strain on the domestic industry.

Chinese Exporters Under Scanner

Several Chinese producers and exporters were examined during the investigation, including Anhui Futian Agrochemical Co., Ltd., Inner Mongolia Lange Biotechnology Co., Ltd., Lion Agrevo (Nantong) Co., Ltd., Hangzhou Nutrichem Co., Ltd., and Capital Industry Construction Technology Co., Ltd. (along with its related entities Shandong Qiaochang Modern Agriculture Co., Ltd., Shandong Qiaochang Modern International Co., Ltd., and QCC Shanghai Co., Ltd.). 

On the Indian side, key stakeholders such as HPM Chemicals & Fertilizers Ltd., Crystal Crop Protection Ltd., Universal Agro Chemical Industries Ltd., Krishi Rasayan Export Pvt. Ltd., and Willowood Chemicals Ltd. participated as interested parties, representing importers and users of the product.

The DGTR concluded that China PR should be treated as a Non-Market Economy (NME) for this investigation, as none of the Chinese producers provided sufficient evidence to rebut this presumption. The normal value for Chinese exports was constructed based on Indian production costs, while the export price was determined using transaction-wise import data. The investigation found dumping margins ranging from 40% to 70%, indicating that Chinese exporters were selling the product in India at prices significantly below their domestic market rates. Additionally, the injury margin—the difference between the fair selling price (Non-Injurious Price, or NIP) and the landed price of imports—was calculated to be between 20% and 45%, confirming that the dumped imports were causing material injury to the domestic industry.

Financial Impact and Injury to Domestic Industry

The domestic industry, led by India Pesticides Limited, suffered severe financial losses due to the influx of low-priced Chinese imports. Key financial indicators revealed:

• Declining Profitability: The domestic industry reported consistent losses over the injury investigation period, with negative returns on capital employed (ROCE).

• Price Suppression: The landed price of Chinese imports was below the cost of production of Indian manufacturers, forcing domestic players to sell at unsustainable prices.

• Underutilization of Capacity: Despite significant investments in expanding production capacity, the domestic industry operated at sub-optimal utilization levels due to unfair competition.

• Cash Flow Strain: The industry faced severe cash flow challenges, with mounting inventories and reduced sales realizations.

To mitigate these challenges, the DGTR recommended anti-dumping duties ranging from USD 1,246 to USD 1,976 per metric ton (MT) on specific Chinese producers, with a residual duty of USD 1,591 per MT for non-cooperative exporters. These duties are expected to stabilize domestic prices, improve capacity utilization, and restore profitability for Indian manufacturers.

Implication for Farmer

While the imposition of duties will lead to a moderate increase in input costs, the impact on farmers is expected to be minimal. Calculations suggest that the price of Pretilachlor-based herbicides may increase by approximately ₹21 per bottle, translating to a negligible cost burden per acre of cultivation. The DGTR emphasized that the duties are not intended to restrict imports but rather to ensure fair pricing and prevent unfair trade practices that harm domestic producers.

The DGTR’s final findings suggest the need for trade remedial measures to protect India’s agrochemical sector from dumped and subsidized imports. The Ministry of Finance will now issue a formal notification to enforce the recommended duties, which will remain in effect for five years. This decision aligns with India’s broader strategy to reduce dependency on Chinese agrochemicals and promote self-reliance in critical crop protection products. By ensuring a level playing field, the move aims to safeguard domestic industry interests while maintaining affordability for end-users.

Final Duty Recommendations