Countervailing Duty on Saccharin Imports from China PR Dated: Notification No. 01/2025-Customs (CVD) 25th February 2025

The Government of India, through Notification No. 01/2025-Customs (CVD), has imposed a countervailing duty (CVD) of 20% on imports of Saccharin in all its forms (tariff item 2925 11 00) originating in or exported from China People's Republic (China PR). This measure is aimed at addressing the potential adverse effects of unfair trade practices, such as subsidization, that can distort market conditions and harm domestic industries in India.

Key Details of the Notification:

1. Subject of the Notification: The notification specifies the imposition of a 20% Countervailing Duty (CVD) on imports of Saccharin in all its forms (tariff item 2925 11 00) from China PR.
2. Effective Date: The notification was issued on 25th February 2025 and is applicable from the date specified.
3. Reason for the Duty: The imposition of the countervailing duty is intended to offset subsidies provided by the government of China PR on the export of Saccharin to India. These subsidies are considered to be trade-distorting and harmful to Indian manufacturers of Saccharin.
4. Tariff Item: The specific HS Code mentioned is 2925 11 00, which corresponds to Saccharin and its derivatives.
5. Rate of Countervailing Duty: A 20%Countervailing Duty has been imposed on Saccharin imports from China PR. This duty will be applicable to both raw and processed forms of Saccharin falling under the mentioned tariff code.

What is Countervailing Duty (CVD)?

A Countervailing Duty is a tariff or tax placed on imported goods to counterbalance the subsidies given by the government of the exporting country. It is aimed at:

• Offsetting subsidies: If a foreign government provides subsidies to its domestic industries, this can lead to unfair competition in international trade.
• Ensuring a level playing field: The countervailing duty seeks to neutralize the trade advantage gained by exporters due to these subsidies.

In this case, China PR is believed to have provided subsidies to its domestic manufacturers of Saccharin, which resulted in unfair pricing when these products are exported to India. By imposing a countervailing duty, the Indian government aims to protect local businesses in India from the negative impact of such subsidized imports.

Impact of the Notification:

1. Importers: Importers of Saccharin from China PR will now be subject to the additional 20% duty, which will raise the cost of imports from China. This could lead to price increases for businesses and consumers relying on imported Saccharin.
2. Domestic Producers: The imposition of the duty will provide protection to Indian manufacturers of Saccharin from unfair trade practices, thus creating a more competitive environment in the domestic market.
3. Trade Relations: The measure might affect trade relations between India and China, particularly in the Saccharin industry, as it is seen as a response to perceived subsidized pricing and could lead to further trade disputes if China responds with retaliatory actions.

Conclusion

The imposition of a 20% countervailing duty on Saccharin imports from China under Notification No. 01/2025-Customs (CVD) represents India’s effort to protect domestic industries from unfair subsidized imports. The measure is expected to affect the cost structure for importers, but it aims to foster a fairer competitive environment for local manufacturers in the Indian market.