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Rohan Shah, Amaya Exim
An indentor gets stumped by an anti-dumping duty. Should he take
up the cudgels on behalf of his client, or simply move on?
By Pooja Kothari
For generations, Rohan Shah's family had been into the indenting business.
So when he finished his graduation from Bryant University in the US and came across an
opportunity to represent an international manufacturer in India, Shah promptly
started a new business under Amaya Exim. That was in 2006.
The company represented manufacturers from around the world,
and distributed their products in India. It worked exclusively with "principals",
as they are called in trade jargon, in China, Taiwan, United States and Europe,
and earned a commission on sales.
The firm dealt with products, such as solvents, bulk drugs and intermediates,
dyes intermediates, organic or inorganic chemicals and specialty or performance chemicals.
These were used by manufacturers across the country.
To put it simply, Amaya ran a business-to-business operation.
As an indenting agent, it could sell minimum one container of a product, not smaller quantities.
So, it would place orders for containers, and sell them
to either end-users, who had the capacity to buy an entire
container, or to a trader, who would then sell to companies
that needed smaller quantities of those products.
The business did well. Amaya built a reputation for
high-quality products and competitive prices—a must in
the indenting business. Since the manufacturer sits far
away from the user of its products, it is up to the indenting
agent to ensure the interests of both the buyer and the
seller are looked after. In 2009-10, the company did 540
crore in indenting sales.
One of the companies that Amaya represented in India
was Changzhou Yabang Chemical Company of China. It
was the largest manufacturer of maleic anhydride (MA)
not only in China, but in the entire Southeast Asia. MA is
a raw material used to make unsaturated polyester resin
(UPR). Companies that make composites, or reinforced
plastic, use MA as a raw material.
The MA industry in India was almost non-existent.
There was a sole manufacturer in south India, who could
hardly meet the demand from the entire country. In fact,
such was the state of things that users found it more competitive
to import MA than purchase it locally.
"It was one of our first products, and we enjoyed very
good volumes in it, so much so that we were the largest
indentor of this product," says Shah. He dealt with nearly
1,200 metric tonnes of MA per month, selling it to a mix
of end users and traders. The trades accounted for a considerable
share of Amaya's business in volume terms.
In February 2007, the government of India moved an
initial notification on behalf of the domestic manufacturers
of this product, calling for the introduction of an antidumping
duty on all MA products from China, Taiwan
and Indonesia. The duty was to be applicable only to
imports from these regions, not from the entire world.
That almost sounded like a death knell for Amaya's
trade in MA. Because margins were wafer thin, any duty
would push up prices, and make it less competitive to
import the product into India.
Amaya first response was that it was someone else's problem. "We
hadn't lost any money, and we could always find a new manufacturer
to represent," says Shah.
However, given his family's experience in the field, Shah decided
against that short-term approach. He instead sought legal opinion
on the matter to check whether the decision was a fair one on the
part of the government.
It made perfect business sense to take this approach. Fighting for
the rights of a client based in China would earn them the goodwill
of clients from all over the world. "We didn't tell our client that it was
their problem. We chose to reassure them that we'll get this removed,"
says Shah, who had been approached by two other manufacturers of
MA to represent them instead.
Once convinced that he had a "good case in hand", Shah
"appointed one of the top practitioners of trade law" and took legal
recourse to justice.
However, in August 2008, government officials went to China to
inspect the plants of Amaya's "principals", and concluded that China
was dumping MA into the Indian market. The government, thereafter,
imposed a flat anti-dumping duty of $95 per metric tonne on
all MA imports from their principals in China.
Around the time the final findings of the inspection were made
public, the local supplier, on whose behest the government had
imposed the duty, shut down his production facility in south India
and started importing MA from Malaysia—without any antidumping
duty on it.
Being India's largest indentor of
maleic anhydride, the duty hit
Amaya hard. Between August
2008 and November 2010, the firm
did no business in MA, except for
the small quantities it sold to
export-oriented units that were
exempt from this duty. "We did
negligible business of around 100
metric tonnes a month in that
time," recalls Shah.
The Decision Amaya decided to
take further legal action. "We didn't
do that just for our own benefit, but
also for the numerous domestic
manufacturers, who were using
this product," says Shah.
In February 2010, Shah initiated
a mid-term review with the
government, challenging the
imposition of anti-dumping
duties, and asking for a second
round of investigation. This time
round, he was much smarter
about the move. He brought on
board two associations—the IPA
(Indian Plasticisers Association),
and UPRA—whose members
used this product extensively as a
Amaya built its case from the
perspective of those manufacturers
this time round, highlighting
how their operations were being
affected by this monopoly. In addition,
since there was no one manufacturing the product in India any
more, the entire logic of "anti-dumping" had become flawed.
This involved a fair amount of paper work. Despite the presence
of lawyers, Shah had to work hard to build the case. "The lawyers will
only finally represent in their jargon what you will tell them," he says.
Challenging the government on its decision is a bold step. "Once
you decide to do that, you better make sure that you have done your
ground work. That means being well-versed with the subject, and
drawing up appropriate grounds to fight," he adds.
He co-ordinated with local manufacturers, who were using MA.
He helped them fill up a 30-page questionnaire demanding data
from importers. "I had to sit with people and explain to them that
this was for a bigger cause. There were many who didn't co-operate.
But I got all the big importers to come on board. That made our case
stronger," says Shah.
Not ready to take no for an answer, Shah even flew several times
to Delhi to make his case to government officials. But finding his way
across the corridors of power was
easier said than done. The babus of
Udyog Bhawan wouldn't meet
him, despite visiting them several
times. "So I simply walked into
their offices to get a hearing,"
By August 2010, the findings of
the mid-term review were made
public. "Those were totally in our
favour, and suggested that the antidumping
duties should be abolished,"
recalls a relieved Shah, who
has started indenting in the product
The entire fight cost Shah and
his principals more than $75,000
in lawyer fees, air fare for trips to
Delhi and China, and so on. In
hindsight, that seems to be money
well spent. In November 2010, the
government removed the antidumping
duty on MA imports. In
the first month itself, Amaya did
trade volumes of 600 metric tonne,
and that has gone up to 1,400 metric
tonne per month since then.
Business aside, winning the
case has "added credibility" to the
company, and earned it lots of
goodwill. Amaya's Chinese principals
have greater faith in its ability
to represent their interests. The
government authorities as well as
people in the market know that
Amaya is a "serious contender" in
its field. "This reputation is only created with time and experiences;
it cannot be bought with money," says Shah.
Although the legal battle was long drawn out, it was worth it at
various levels, feels Shah. At 26, he couldn't have learned more—not
least about the workings of the government from close quarters in
these three years. Through the past few years, there were many times,
especially when dealing with the government that Shah felt like
He learnt who his true well-wishers were. "I got like a 100 phone
calls the day we won the case. Everyone wants to be a part of the good
times. However, most of these people weren't there with us through
the struggle of the past few years," says Shah.
The best part is that he has earned his company the distinction
of being the only indenting agency in the country to have fought an
anti-dumping case against the government—and won it.