News Feature | March 26, 2014

India Imposes Duty On Import Of Sodium Nitrate

By Marcus Johnson

India has imposed a 15 month safeguard duty on the import of sodium nitrate. The chemical is often used in the pharmaceutical industry, as well as in the production of lubricants and construction chemicals. The safeguard was imposed in order to help and promote domestic producers of the chemical. The safeguard was placed by the Indian government's Finance Ministry after talks with the Directorate General of Safeguards.

India's government and pharmaceutical industry have come under fire in recent months from western pharmaceutical firms. Western firms allege that Indian drug makers are working under lax regulations that produce low quality, cheap drugs that are potentially dangerous to consumers. Western drug makers are also concerned about a perceived lack of strength of Indian intellectual property rights. However, this new duty imposed by India is inside the boundaries of the World Trade Organization. The duty can be legally imposed to protect a domestic industry as long as it is temporary.

The Directorate General of Safeguards claimed that further increases in sodium nitrate imports would have “caused and threaten to cause serious injury to the domestic producers of Sodium Nitrite and it will be in the public interest to impose safeguard duty on (the) imports... for a period of one year and three months.”

The Directorate General first investigated the impact of sodium nitrate imports after a compliant from Deepak Nitrite. The investigation determined that increased imports would be detrimental to domestic production. The domestic industry for sodium nitrate production saw its market share drop from 55% in 2010-2011 to as low as 41% in 2012-2013.

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