India Lifts Duty on Saudi Exports Amid Worries Over Iran’s Oil

India lifted an anti-dumping duty on Saudi Arabian polypropylene amid escalating concerns that international sanctions on Iran may disrupt oil shipments from the Persian Gulf nation.

No reason was given for India’s decision to scrap the duty, according to a Dec. 30 statement posted on the website of the New Delhi-based Central Board of Excise and Customs. Polypropylene is a plastic polymer used in products such as carpets, food containers and car parts.

Saudi authorities last year put the Petroleum Ministry in charge of anti-dumping negotiations with India instead of the Ministry of Trade and Industry. Prince Abdulaziz bin Salman Al Saud, the deputy oil minister, is now leading talks on dumping claims against Saudi petrochemicals exporters.

India is seeking additional oil and natural gas from Persian Gulf nations including Saudi Arabia, while U.S. and European Union sanctions against Iran pose “practical difficulties” to supplies, Oil Minister S. Jaipal Reddy said on Dec. 5. Saudi Arabia will increase shipments to some Indian refiners this year as they add plants and seek alternative supplies after a payment dispute with Iran, four people with direct knowledge of the plans said on Nov. 15.

Sending Message

“Moving the case from the Ministry of Trade and Industry to the Petroleum Ministry sent a message that Saudi Arabia is taking this case very seriously” because Prince Abdulaziz wields considerable power, Abdulrahman al-Zamil, a trade representative for Saudi petrochemical makers in Riyadh, said by telephone yesterday.

India imposed a 6.5 percent duty in November 2010 on polypropylene imports from Saudi companies including Saudi Basic Industries Corp., the world’s biggest petrochemical maker, Advanced Petrochemicals Co. and National Industrialization Co., saying they sold the product below cost.

Abdullah Al Garawi, president and chief executive officer of Advanced Petrochemicals, said in a telephone interview yesterday that his company received confirmation from the Ministry of Petroleum that India had lifted the duty.

“We had a hearing on Dec. 20 in India and our lawyers were there, but all of sudden the hearings were canceled and we were not told the reason,” he said. “It’s clear that the issue was resolved at a higher official level.”

S.K. Goel, chairman of the Central Board of Excise and Customs, was unavailable for comment.

“This is a good and timely move by the Indian government due to the lack of substantive evidence of material injury to local producers,” said Fawaz al-Alamy, a former negotiator for the kingdom at the World Trade Organization who now advises Saudi companies on anti-dumping and trade issues. Anti-dumping cannot be applied if “serious material injuries are not proved, even though dumping has occurred.”

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