India has initiated a countervailing duty probe into increased imports of a chemical - Calcium Carbonate Filler Masterbatch - used in the plastic industry, from Vietnam following a complaint from domestic players.

The move is aimed at guarding domestic manufacturers from the increase in imports that are subsidised by Vietnam.

The investigation has been initiated by the Directorate General of Trade Remedies (DGTR), an arm of the commerce ministry.

Compounds and Masterbatch Manufacturers Association of India and Masterbatch Manufacturers Association have filed a petition before the directorate on behalf of the domestic industry for initiation of the probe on the chemical exported from Vietnam into India.

The DGTR in a notification has said that the applicants have alleged that the product is being imported into India from Vietnam at subsidized prices in significant quantities for a prolonged period, causing material injury to it.

They have requested for imposition of countervailing duty on these imports.

"On the basis of the duly substantiated written application filed by the domestic industry...On the basis of the prima facie evidence submitted by the domestic industry, about the subsidization of the product...The authority, hereby, initiates an investigation," it said.

In the investigations, the DGTR would determine the degree and effect of any alleged subsidization in respect of the product and to recommend the amount of duty, which if levied, would be adequate to remove the injury to the domestic industry, it said.

The applicants have alleged that the producers/exporters have benefitted from the actionable subsidies provided by various levels in the Government of Vietnam, including the Governments of the different provinces and municipalities in which the producers/ exporters are located. It added.

Countervailing duty is a country-specific duty, which is imposed to safeguard domestic industry against unfair trade subsidies provided by the local governments of the exporting nations.

India has already imposed countervailing duty as well as anti-dumping duties on various kinds of steel from countries like China to protect domestic players, which are facing problems.

Vietnam is a key trading partner of India in the ASEAN bloc. India's exports to the country stood at USD 5.47 billion in 2023-24, while imports were USD 9.34 billion in the last fiscal.