India Probes Anti-Dumping Duty on Bangladesh PET Film

India’s Ministry of Commerce and Industry has initiated an anti-dumping investigation into imports of Polyethylene Terephthalate (PET) film originating in or exported from Bangladesh, signalling an expansion of trade defence measures against its eastern neighbour. The probe, launched by the Directorate General of Trade Remedies (DGTR) following formal petitions from domestic synthetic film manufacturers, comes on the heels of long-standing anti-dumping duties imposed on Bangladeshi jute products.

Key takeaways

• DGTR initiates formal probe: The Directorate General of Trade Remedies has accepted an industry application alleging that low-cost PET film from Bangladesh is being dumped into the Indian domestic market at predatory, below-normal values.
• Domestic industry injury alleged: Indian manufacturers of biaxially oriented and cast PET film cite declining capacity utilization, suppressed price realizations, and inventory pileups driven by subsidized imports entering under concessional tariff channels.
• Extension beyond agricultural goods: While trade friction between New Delhi and Dhaka previously centered around agricultural commodities and jute yarn, the inquiry into PET film extends bilateral trade remedies into industrial chemicals and flexible packaging materials.
• Exploitation of SAFTA exemptions: The petition points to trade distortions under the South Asian Free Trade Area (SAFTA), where zero-duty access combined with domestic export subsidies in Bangladesh creates an unlevel playing field for Indian producers.
• Two-stage determination ahead: If the DGTR confirms dumping and material injury, it will issue preliminary findings recommending definitive anti-dumping duties to the Ministry of Finance’s Department of Revenue.

What triggered the anti-dumping probe on PET film?

Polyethylene Terephthalate (PET) film is a high-performance thermoplastic sheet used extensively across the modern industrial packaging complex. Valued for its high tensile strength, chemical stability, thermal resistance, and barrier properties, it forms the backbone of flexible food packaging, pharmaceutical blister backing, industrial insulation, electronic touchscreens, and solar photovoltaic backsheets.

The Indian flexible packaging and polyester film industry—anchored by large-scale domestic producers such as Polyplex Corporation, SRF Limited, Ester Industries, and Jindal Poly Films—has invested billions of rupees in building domestic biaxially oriented polyethylene terephthalate (BOPET) capacities.

However, over recent fiscal quarters, domestic producers documented a sharp spike in finished PET film shipments entering land customs stations along the West Bengal and Tripura borders. According to representations submitted to the DGTR, Bangladeshi converters have exported standard and metallised PET film varieties at prices significantly lower than both their prevailing domestic sales rates and the cost of raw chemical inputs (Purified Terephthalic Acid and Monoethylene Glycol) in the open market.

Having established prima facie evidence of dumping and consequential material injury to the domestic manufacturing base, the DGTR initiated a formal investigation covering:

• The product under consideration: Polyethylene Terephthalate (PET) film of various micron thicknesses, whether plain, corona-treated, or vacuum-metallised.
• Period of Investigation (POI): The financial quarters preceding the filing, used to calculate export margins and normal domestic value.
• Injury analysis window: A three-to-four-year retrospective window assessing production volume, sales margins, market share, and plant capacity utilization across domestic Indian mills.

Parallels with the jute trade dispute

The PET film investigation mirrors the legal and commercial mechanisms deployed during India’s multi-year trade remedy dispute over Bangladeshi jute.

In January 2017, following a comprehensive DGTR investigation, the Department of Revenue imposed definitive anti-dumping duties ranging between $6.30 and $351.72 per metric ton on imports of jute yarn, twine, sacking bags, and hessian cloth from Bangladesh. That duty was systematically reviewed, confirmed, and subsequently extended in late 2022 to protect traditional jute mills across the Hooghly basin in West Bengal.

The parallels between jute and PET film highlight recurring points of tension in bilateral Indo-Bangladesh cross-border commerce:

Strategic Parameter	Jute Goods Dispute (2017–Present)	PET Film Investigation (2026)	Underlying Regulatory Dynamic
Primary Industry	Natural textiles and agrarian sacking	Synthetic plastics and flexible packaging	High capital expenditure with thin operating margins
Domestic Base	West Bengal, Bihar, Assam mills	Pan-India chemical and extrusion plants	Pressure on domestic capacity utilization
Alleged Subsidy Driver	10% to 20% direct cash export subsidies from Dhaka	Low energy tariffs, raw material duty rebates, cash incentives	Double benefit of lower input costs and export incentives
Tariff Arbitrage	Concessional cross-border SAFTA access	Duty-free entry into India under SAFTA rules of origin	Goods enter without standard Most-Favoured-Nation (MFN) duties
Enforcement Body	DGTR & Ministry of Finance	DGTR & Ministry of Finance	Trade remedy under WTO Anti-Dumping Agreement

In both cases, Indian manufacturers claimed that Dhaka’s policy of extending direct export cash incentives (cash assistance schemes) to outward-bound cargo allowed Bangladeshi exporters to undercut landed Indian factory-gate prices, even after absorbing transport logistics.

The trade mechanism: SAFTA rules of origin and value addition

The heart of the commercial friction lies in the architecture of regional preferential trade pacts, primarily the South Asian Free Trade Area (SAFTA).

Under SAFTA, India grants preferential, often zero-duty customs access to products originating from least-developed member countries (LDCs), a status Bangladesh has historically leveraged to expand industrial exports into the massive Indian market.

THE TRADE ROUTING & VALUE-ADDITION DISPUTE

[ Imported Petrochemicals (PTA / MEG) ]
(Sourced globally or via duty-exempt bonded warehouses)
                   │
                   ▼
[ Film Extrusion in Bangladesh ]
(Enjoys lower industrial power costs & cash export assistance)
                   │
                   ▼
[ Exported to India via SAFTA ]
(Zero basic customs duty; alleged failure to satisfy true value addition)
                   │
                   ▼
[ Border Land Customs Stations (Petrapole / Agartala) ]
(Undercuts Indian domestic mill prices by 12% to 18%)
                   │
                   ▼
[ Domestic Market Disruption ]
(Indian mills face capacity curtailment & margin erosion)
                   │
                   ▼
[ Trade Remedy Trigger ]
(DGTR initiated anti-dumping & rules-of-origin verification)

Indian manufacturers argue that the PET film entering the country violates the spirit of SAFTA in two ways:

1. Inadequate domestic value addition: Bangladesh does not possess a significant domestic basic petrochemical industry producing the core monomer building blocks—Purified Terephthalic Acid (PTA) and Monoethylene Glycol (MEG). Domestic petitioners allege that converters import polyester chips or raw inputs from third-party nations (such as China or Southeast Asia) with minimal local processing, yet claim SAFTA duty-free certificates to avoid India’s standard 7.5% to 10% basic customs tariff.
2. Double policy support: Exporters from Bangladesh benefit from state-backed industrial incentives, including bonded warehouse privileges, subsidized industrial utility connections, and export development funds, creating a pricing distortion that domestic Indian plants—burdened by higher power tariffs and GST compliance costs—cannot match.

Impact on Indian packaging, converters, and end-user industries

The imposition of an anti-dumping duty on PET film is a double-edged sword within India’s manufacturing ecosystem, dividing primary raw material producers from downstream consumer brands.

The case for domestic producers

For Indian polymer manufacturers, a protective anti-dumping duty is critical to stabilizing local pricing. Global polymer margins have compressed under the weight of Chinese industrial capacity additions. If unvetted, subsidized material continues to enter the domestic market via border checkpoints, Indian mills will be forced to curtail shifts, freeze capital modernization programs, and scale back domestic employment. Anti-dumping duties act as an equalizer, raising the landed cost of dumped goods to match the calculated “normal value.”

The concern for FMCG and packaging converters

Conversely, downstream end-users—specifically flexible packaging converters, printing houses, and fast-moving consumer goods (FMCG) conglomerates (such as ITC, Hindustan Unilever, and Britannia)—closely monitor these trade petitions.

• PET film represents a primary raw material cost in food-grade pouches, snack laminates, and shampoo sachets.
• If anti-dumping duties inflate the landed cost of imported films, packaging converters may see their operating margins squeezed unless they can pass the cost increases onto consumer brands.
• This dynamic often triggers intense lobbying before the DGTR, where downstream user associations argue that protective duties could increase retail packaging expenses and feed broader inflationary pressures.

Strategic and diplomatic cross-currents

The initiation of this investigation arrives amid a delicate phase in Indo-Bangladesh economic diplomacy. Trade between the two nations exceeded $14 billion in FY 2023–24, making Bangladesh India’s largest trading partner in South Asia.

However, political transitions and diplomatic recalibrations in Dhaka have prompted New Delhi to take a more stringent look at border trade flows:

• Tightening Rules of Origin (CAROTAR): Indian customs authorities have intensified scrutiny under the Customs (Administration of Rules of Origin under Trade Agreements) Rules (CAROTAR, 2020), demanding proof that goods entering under SAFTA satisfy strict originating criteria rather than being transshipped from third-party hubs.
• Transition out of LDC status: As Bangladesh prepares for its formal graduation from the United Nations Least Developed Country (LDC) category, the preferential, non-reciprocal trade privileges it has enjoyed in Indian markets are already slated for gradual phase-out.
• Precedent for other petrochemicals: The PET film probe could serve as a regulatory template for investigations into other downstream synthetic products, including Biaxially Oriented Polypropylene (BOPP) films and specialty packaging substrates.

What happens next in the DGTR investigation?

The initiation notification opens a structured quasi-judicial process governed by World Trade Organization (WTO) trade remedy regulations:

1. Questionnaire responses: The DGTR will issue formal questionnaires to known Bangladeshi exporters, the Government of Bangladesh, and domestic Indian importers. Parties will have 30 to 40 days to submit verified audited figures on production costs, capacity, domestic sales prices, and export pricing.
2. On-site verification: Trade remedy investigators may conduct on-site or digital verification audits of the participating Bangladeshi manufacturing plants to verify claimed conversion costs.
3. Preliminary findings: If the DGTR finds urgent evidence of injury, it may recommend an interim or provisional anti-dumping duty within six to eight months to provide immediate relief to Indian producers.
4. Final determination: The investigation concludes within 12 months (extendable to 18 months), after which the DGTR issues its final determination. If dumping and injury are confirmed, the Ministry of Finance issues a formal customs notification notifying definitive duties for a period of up to five years.

Frequently asked questions

What is the purpose of an anti-dumping duty?

An anti-dumping duty is a trade remedy tariff imposed on foreign imports that are priced below their normal domestic market value or below the exporter’s cost of production. It is not a punitive fine, but a mechanism permitted under WTO rules to restore fair market competition and protect domestic industries from predatory pricing.

What is the role of the DGTR in this process?

The Directorate General of Trade Remedies (DGTR), an arm of India’s Ministry of Commerce and Industry, functions as the quasi-judicial authority responsible for investigating unfair trade practices, including dumping, actionable foreign subsidies (countervailing measures), and sudden import surges (safeguard measures).

Why are Indian manufacturers worried about PET film from Bangladesh?

Indian manufacturers argue that Bangladeshi converters benefit from domestic export subsidies, subsidized electricity, and duty exemptions on imported raw materials. Because these films enter India duty-free under the South Asian Free Trade Area (SAFTA), domestic mills struggle to compete against import prices that undercut local production costs.

What previous products from Bangladesh faced Indian anti-dumping duties?

In 2017, India imposed anti-dumping duties on imports of Bangladeshi jute products—including jute yarn, twine, sacking bags, and hessian cloth—ranging from $6.30 to $351.72 per metric ton. These duties were reviewed and extended in 2022 to continue protecting traditional domestic jute mills.