India launches subsidy probe on Chinese insoluble sulphur imports

India’s Directorate General of Trade Remedies (DGTR) on September 30, 2026, initiated a countervailing duty (CVD) investigation into imports of insoluble sulphur from China, following a petition by OCCL Limited, the sole domestic producer of the chemical.

The investigation, registered as Case No. CVD/OI/008/2026, will examine whether Chinese producers and exporters of insoluble sulphur have benefited from government subsidies that are causing material injury to the Indian industry. The period of investigation covers April 1, 2025 to March 31, 2026.

OCCL’s petition lists 79 subsidy programmes allegedly extended by the Chinese central and provincial governments, spanning preferential loans, tax concessions, export financing, land and electricity provided at less than adequate remuneration, and direct grants. The applicant contends these confer countervailable benefits that allow Chinese exporters to undercut domestic prices.

This probe follows earlier trade remedy actions on the same product. The DGTR had recommended anti-dumping duties on Chinese and Japanese insoluble sulphur imports in March 2025, which the Ministry of Finance notified in June 2025. A subsequent anti-absorption investigation, concluded in September 2026, found that Chinese exporters had reduced export prices after the anti-dumping duty came into force without a corresponding fall in production costs, prompting a modification of the duty quantum.

Insoluble sulphur, a polymeric form of sulphur used as a vulcanising agent in rubber products, is consumed predominantly by India’s tyre industry, which accounts for over 90 per cent of domestic demand.

The DGTR noted that China did not attend a consultation meeting scheduled for September 28, 2026 under the WTO Agreement on Subsidies and Countervailing Measures, after which the authority proceeded with initiation.

Interested parties, including Chinese producers, importers and domestic users, must register on the DGTR’s SETU portal and file responses within 37 days of receiving the non-confidential application. Failure to respond may result in findings based on available facts.