New Delhi: The government has decided to investigate whether the increased import of carbon black, used by the tyre and the rubber industries, from China was hurting the local manufacturers who are seeking imposition of a safeguard duty on inbound shipments.

A country imposes safeguard duty to give temporary relief to domestic producers while they adjust to the pricing tactics of competitive foreign players.

The domestic industry has requested the Directorate General of Safeguards (DGS) for immediate imposition of safeguard duty on imports of carbon black originating from China for a period of four years.

"The application has been examined and it has been found that prima facie increased imports of carbon black have caused and are threatening to cause market disruption to the domestic producers of carbon black and as such it has been decided to initiate an investigation...," the DGS said.

The application has been filed by the Association of Carbon Black Manufactures on behalf of two of its member companies Phillips Carbon Black Limited (Kolkata) and Hi-Tech Carbon (Sonebhadra).

The companies account for more than 80 percent of the total production of carbon black in India.

The imports from China have increased phenomenally from 13,944 MT in 2008-09 to 70,193 MT in 2011-12, an increase of 429 percent.

Besides, the import from China with respect to domestic production was 3 percent in 2008-09, which has increased now to 11 percent in 2011-12.

The profitability of the domestic industry has steeply deteriorated due to the increased imports and the domestic industry is now suffering financial losses, the application said.

(Agencies)