"It is considered appropriate to initiate (the probe) in order to determine whether the imports of the product under consideration from Malaysia constitute increased imports and whether the increased imports have caused or are threatening to cause serious injury to the domestic producers," the DGTR has said in a notification.
If found that the jump in imports have impacted domestic players, the directorate would recommend safeguard duty on the palm oil. Finance ministry takes the final call to impose the duty.
The investigation is being carried out under India-Malaysia Comprehensive Economic Cooperation Agreement (Bilateral Safeguard Measures) Rules, 2017. The agreement is a kind of free trade pact under which both countries have reduced customs duties on several goods traded between them.
The application for the probe was filed by the Solvent Extractors' Association of India on behalf of domestic producers. It has alleged that increase in imports of the oil from Malaysia is causing serious injury or there is a threat of serious injury to domestic producers.
The petitioner has claimed significant decline in production, sales and capacity utilization for the product. They have also stated that market share of Indian industry has declined whereas market share of imports has increased. The period of investigation has been taken as January 2019 -June 2019. It would also consider the import data of 2016-19.