The Directorate General of Trade Remedies (DGTR), under the trade ministry, launched the probe into imports of 4,4-Diamino Stilbene-2,2-Disulphonic Acid (DASDA) following a complaint by Indian chemical maker Deepak Nitrite Limited.
The DGTR proposed a reference-price-based duty, under which importers would pay the difference between the arrival price and a reference price of $3,453 per ton if shipments fall below that level.
DASDA is an organic chemical used mainly to make optical brightening agents and dye intermediates for textiles and other industries.
The watchdog said there was prima facie evidence that the product was exported to India at dumped prices, causing injury to domestic manufacturers.
The investigation covered April 2023 to June 2024, along with earlier years to assess the impact on the sector.
India had previously imposed anti-dumping duties on DASDA, but they lapsed in 2019.
The finance ministry will make the final decision on whether to impose the duties.