India has begun an investigation into the alleged circumvention of countervailing duty on saccharin imports from China. The probe was launched after claims that shipments of the sweetener are being rerouted through Thailand to avoid paying the duties imposed by India. The investigation is being carried out by the Directorate General of Trade Remedies (DGTR), which works under the Ministry of Commerce.

According to an official notification, the probe was initiated after domestic companies Swati Petro Products and Blue Jet Healthcare submitted a request seeking an inquiry. These companies alleged that the existing countervailing duty on saccharin imported from China is being bypassed by routing the product through Thailand before it reaches India.

The applicants argued that the saccharin exported from Thailand may actually originate in China. They claimed that instead of being produced in Thailand, the product is simply being shipped through the country so that exporters can avoid paying the duty imposed on Chinese imports. This practice, if confirmed, would mean that the existing duty meant to protect Indian manufacturers is being undermined.

The companies also stated that there are no real manufacturing facilities for saccharin in Thailand. Hence, they suspect that the shipments labelled as Thai exports may in fact be Chinese products redirected through Thailand. The route is being used only to escape the duty that applies to imports coming directly from China.

Saccharin is an artificial sweetener that is used in many industries. It is commonly used in food and beverage products, personal care items, tabletop sweeteners, electroplating brighteners, and pharmaceutical products. Due to its wide range of uses, subversion of import rules could impact several industries that depend on the product.

On February 25, 2025, the Ministry of Finance imposed countervailing duties on saccharin imported from China, which are still in effect. The purpose of such duties is to protect domestic manufacturers from unfair competition caused by subsidised imports from other countries.

In the notification announcing the probe, the DGTR stated that it has launched an anti-circumvention investigation based on the request submitted by the domestic companies. The investigation will determine whether the current duty on Chinese saccharin imports is being avoided through indirect routes.

If the investigation finds evidence supporting the allegations, the DGTR may recommend extending the same countervailing duty to imports coming from Thailand as well. Such a recommendation would aim to ensure that the existing trade protection measures remain effective. However, the final decision on whether to extend the duty will be taken by the Ministry of Finance.

The applicants have also requested the government to extend the existing duty on saccharin imports to shipments arriving from Thailand. They argue that this step is necessary to prevent misuse of the current duty rules and to ensure domestic producers are not harmed by unfair trade practices.

The investigation will now involve collecting data and examining trade patterns to determine whether saccharin imports are indeed being routed through Thailand to avoid the duty. Authorities will study the origin of the product, shipping records, and other relevant information before reaching a conclusion.

The outcome of this probe could affect companies involved in the production, import, and use of saccharin in India. Industries such as food processing, beverages, personal care, and pharmaceuticals will closely watch the investigation, as any change in duty rules could influence costs and supply chains.