India Probes Chinese Rubber Imports for Unfair Trade Practices

India Probes Chinese Rubber Imports for Unfair Trade Practices

Why in News?

Recently, India has begun a detailed probe into Chinese rubber imports after concerns arose about unfair trade practices affecting local industries. The Directorate General of Trade Remedies initiated an anti-dumping investigation on Halo Isobutene and Isoprene Rubber, widely used in automobile and manufacturing sectors.

Highlights of the Anti-Dumping Investigation

• The Directorate General of Trade Remedies (DGTR) under the Ministry of Commerce and Industry initiated an anti-dumping investigation on 12 November 2025. 
• The investigation addresses imports of a specific rubber — namely Halo Isobutene‑Isoprene Rubber (HIIR) — originating from China, as alleged by domestic industry. 
• According to a formal notification from DGTR, it had found prima facie evidence of dumping, injury to domestic industry, and a causal link between them. 
• The complaint was filed by Reliance Sibur Elastomers Pvt Ltd (RSEPL), the sole domestic producer of HIIR, which is a joint venture between Reliance Industries Ltd and Russia’s Sibur Investments AG. 
• The applicant alleged that imported HIIR from China was being dumped — sold at a price below fair value — and that this dumping was harming the domestic industry through underutilisation of capacity and losses.
• The company claims that the low‐priced imports resulted in under‐utilisation of its plant commissioned in March 2023, lower capacity utilisation, shrinking profits and impediments to its business expansion.

What is Halo Isobutene‑Isoprene Rubber (HIIR)?

• • Chemical composition: HIIR is a form of synthetic rubber produced by copolymerising isobutylene with a small proportion of isoprene and then halogenating the resulting polymer (typically by introducing bromine or chlorine). Its chemistry gives it the name “halobutyl” rubber, covering variants such as bromobutyl rubber (BIIR) and chlorobutyl rubber (CIIR)”. 

• Physical Properties: HIIR exhibits exceptionally low gas permeability, which makes it highly valuable where airtightness and containment are required. It also shows good resistance to ozone, weathering, and many chemicals, which enables use across temperature ranges from very cold to moderately hot environments.

• Industrial Use: A major use of HIIR is in the inner liners of tubeless tyres for cars, trucks, agricultural vehicles and other heavy-duty mobility equipment where airtightness is critical. It is also applied in hoses, seals, conveyor belts, tank linings, protective clothing, and in medical packaging such as multi-dose vials.

• Market Size: Globally the halobutyl rubber market (which covers HIIR) was estimated at approximately USD 3.2 billion in 2024 and is projected to grow to about USD 5.1 billion by 2033, with a compound annual growth rate (CAGR) around 5.4% between 2026 and 2033. This growth is driven by expansion in the automotive sector and rising demand for high-performance elastomeric materials in diverse industrial applications.

What is Anti-Dumping & Its Framework?

• About: Dumping occurs when an exporter sells a product in another country at a price lower than the “normal value” of the same product in its domestic market.

• Purpose: An anti-dumping duty is a tool that an importing country uses to correct the adverse effect of dumping and protect its domestic industry.

• International Law: The Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (commonly the Anti-Dumping Agreement) gives World Trade Organization (WTO) members the right to impose anti-dumping duties if dumping causes or threatens material injury to a domestic industry. 

• Key Conditions: To impose anti-dumping measures a country must show three things: (a) dumping has occurred, (b) domestic industry has suffered material injury or is threatened with it, and (c) a causal link exists between the dumped imports and the injury.

• Duration: Under WTO rules anti-dumping duties normally last for five years from the date of imposition unless a review shows that ending the duty would lead to continuation or recurrence of dumping and injury.

India’s Legal Framework for Anti-Dumping

• In India the legal basis for anti-dumping action lies in Section 9A of the Customs Tariff Act, 1975, as amended in 1995, which empowers the Central Government to impose anti-dumping duties not exceeding the margin of dumping.
• The Customs Tariff (Identification, Assessment and Collection of Anti‑Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 set out detailed procedures for investigations, calculations, hearings and definitive findings.
• The Indian law adopts definitions of “normal value”, “export price”, and “dumping margin” broadly consistent with WTO standards. If domestic sales in the exporting country are not available, alternative methods like cost of production plus reasonable profit may be used.
• The anti-dumping duty is levied on specific imported goods from specific countries or exporters where dumping and injury have been established.
• The DGTR (formerly known as DGAD) under the Ministry of Commerce acts as the “Designated Authority” for conducting investigations in India. It receives applications from domestic industry, initiates investigations (also suo motu in some cases), collects data, holds hearings and makes findings on dumping, injury and causation.
• As a WTO member, India publishes investigation details and notify the WTO’s Committee on Anti-Dumping Practices. 
• Following investigation, if the DGTR finds dumping, injury and causal link, it recommends imposition of anti-dumping duty to the Central Government (Ministry of Finance/Commerce) under Section 9A.

Impact of the Anti-Dumping Probe

• Bilateral Trade: India and China share one of the largest trade relationships in Asia, with total bilateral trade crossing USD 118 billion in 2024, according to official data from India’s Commerce Ministry. However, India’s trade deficit with China stood at around USD 70 billion, reflecting a heavy import dependency in several sectors such as chemicals, electronics, and rubber products. The anti-dumping investigation can create short-term tensions but are necessary to promote balanced and sustainable trade between both nations.

• Local Manufacturers: Cheap imports from China often push domestic producers into losses by forcing them to compete at unsustainable prices. In the case of HIIR, India’s only local producer has reported under-utilisation of its plant capacity since 2023, even after commercial production began. This limits investment in technology upgrades and reduces industrial productivity.

• Employment: When dumping hurts domestic industries, it directly affects job security for thousands of workers employed in related sectors. The automobile and rubber manufacturing industries in India employ a large workforce across states like Tamil Nadu, Gujarat, and Maharashtra. Reduced production caused by unfairly priced imports leads to layoffs, wage stagnation, and loss of livelihood in ancillary industries such as logistics and packaging.

• Self-Reliance Vision: The Make in India initiative, launched in 2014, encourages domestic production and reduced import dependence. Continuous dumping from China undermines this vision by discouraging local investment and eroding the competitiveness of Indian manufacturing. In the long term, anti dumping aligns with the Atmanirbhar Bharat (Self-Reliant India) policy, promoting domestic value addition and innovation.