The Indian government has decided to continue its protective measures for the domestic chemical sector by extending the anti-dumping duty on imports of normal butanol. This key industrial chemical, also known as n-butyl alcohol, will face the levy on shipments originating from the European Union, Malaysia, Singapore, South Africa, and the United States. The duty, first imposed in April 2021, will now remain in effect until at least 12 July 2026.
Sunset Review Triggers Extension
The extension was officially announced by the Union Finance Ministry through a notification issued on 8 January. This action is not permanent but is a provisional measure put in place while a comprehensive sunset review is conducted. The review, initiated by the designated authority in September 2025 under the Customs Tariff Act, aims to determine if removing the duty would lead to a resurgence of dumping—the practice of exporting goods at unfairly low prices—and cause injury to Indian manufacturers.
According to standard trade remedy rules, anti-dumping duties are typically valid for five years. They can be extended if a review investigation concludes that their removal would likely harm domestic producers. The current duty will stay in force during this review period unless it is officially withdrawn, amended, or replaced by an earlier order.
Protecting a Vital Chemical Industry
Normal butanol is a crucial feedstock for several major industries. It is extensively used in the production of paints, coatings, adhesives, solvents, and pharmaceuticals. The original duty was imposed after investigations revealed that imports from the five specified regions were entering the Indian market at prices below fair value. This practice was negatively impacting the profitability and capacity utilization of domestic manufacturers.
Industry experts suggest that the continuation of this duty is expected to provide a dual benefit. Primarily, it shields domestic producers of n-butanol from the pressure of under-priced imports during the review. Secondly, it offers stability to downstream industries like paints and pharmaceuticals, which rely on a consistent and reliable domestic supply of this chemical.
Market Growth and Key Domestic Players
The Indian n-butanol market is on a steady growth trajectory. According to estimates by IMARC Group, the market was valued at $119.92 million in 2024 and is projected to expand to $180.17 million by 2033, registering a compound annual growth rate of 4.63%. This expansion is fueled by increasing demand from the coatings industry and a gradual shift towards bio-based production methods.
The landscape of domestic production is led by a few key players:
- Andhra Petrochemicals Ltd stands as the country's primary dedicated manufacturer of n-butanol and has historically been a major supplier.
- Bharat Petroleum Corp. Ltd (BPCL) also contributes to domestic supply through its Kochi refinery and associated petrochemical operations, though its output scale is smaller compared to international giants.
Beyond these manufacturers, several Indian chemical companies, including Vizag Chemical and Pon Pure Chemicals, operate as formulators, suppliers, or traders. They source material either domestically or through imports to meet the needs of various downstream industries.
In conclusion, the extension of the anti-dumping duty serves as a critical safeguard for India's chemical manufacturing base. It directly benefits core producers like Andhra Petrochemicals and indirectly supports the broader industrial ecosystem that depends on a stable and competitive local supply of normal butanol.
