9911796707
TMI BlogSafeguard investigation concerning imports of "Hot-rolled flat products of non-alloy and other alloy Steel in coils of a width of 600 mm or more" into India. - Preliminary findingsX X X X Extracts X X X X X X X X Extracts X X X X ..... er alloy Steel in coils of a width of 600 mm or more", hereinafter referred to as 'PUC' (Product under consideration) into India to protect the domestic producers of PUC against serious injury/threat of serious injury caused by the increased imports of PUC into India. The domestic industry has also requested for imposition of provisional safeguard duty in view of steep deterioration in performance of the domestic industry as a result of increased imports of product under consideration. 2. In order to satisfy the requirements under Rule 5 of the said Safeguard Rules, the information presented by the applicant was got verified by on-site visits to the plants of the domestic producers to the extent considered necessary. The non-confidential version of verification report is kept in the public file. Having satisfied that the requirements of Rule 5 were met with, safeguard investigation against imports of PUC into India was initiated vide notice of initiation dated 7th September,2015 and published in the Gazette of India, Extraordinary on the same day. 3. A Copy of the Notice of Initiation dated 7th September,2015 along with copy of non-confidential version of the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucts of steel otherwise plated or coated with zinc; and g) Hot-rolled flat products of stainless steel. (II) Domestic Industry: 6. Section 6(b) of the Customs Tariff Act 1975 defines domestic industry as follows: (b) "Domestic industry" means producers - i. as a whole of the like article or a directly competitive article in India; or ii. whose collective output of the like article or a directly competitive article in India constitutes a major share of the total production of the said article in India 7. The application has been filed by M/S Steel Authority of India Limited; M/S Essar Steel India Limited, and M/S JSW Steel Limited through M/S Lakshmi Kumaran & Sridharan Attorneys, New Delhi. They have claimed that their production together accounts for more than 50% of the total production of PUC in India and it represent a major proportion of Indian production of the product under consideration in the country and thus have the standing to file the present application. 8. After taking into account the information on record, it is determined that production of the domestic producers filing the application and who have provided relevant information constitutes a ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is not in public domain and which the applicant has not disclosed before public at large in the past. Accordingly confidentiality, as prayed for by the domestic industry, is granted. (VI) Increased Imports (Absolute & in relative terms) 13. 'PUC' is imported into India from various countries. The imports of 'PUC' have shown an increasing trend in absolute terms as well as in relative terms during the period as shown in table below:- Financial Year Total Imports (MT) Index All India Production (MT) Import with respect to all India production (%) 2013-14 1292099 100 25510777 5 2014-15 2540114 197 26395795 10 2015-16(Q1) 844840 6646258 2015-16(A) 3379360 262 26585032 13 (VII) Unforeseen development 14. It is noted that there is no express obligation/requirement on the Director General (Safeguards) to analyse unforeseen circumstances as there is no specific requirement either in the Indian Rules, on the methodology that should be followed for analyzing unforeseen developments or in the WTO Agreement on Safeguards, which also does not make any prescription with regard to the methodology that should be followed or the parameters that must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have reduced their dependence on imported steel. This development adversely affected exports of steel from China PR, Russia, Ukraine etc. to developed countries. Manufacturers in these countries had to think of ways to dispose off their production. India happened to be the natural choice for these manufacturers for multiple reasons. 19. World crude steel capacity at 2351 million tons as on 31 December 2014 has reached a level far in excess of global demand by almost 30% resulting in growing urge to export the surplus steel to countries like India that have good demand. 20. India, with relatively better demand prospects (domestic demand up by 3.1%) and high domestic prices, has remained an attraction for these steel surplus economies to channelize their excess capacities. 21. Russia has increased its exports to India. As per a report by a reputed journal Steel360, Russian steel exporters have been experiencing high realization for their exports due to their currency that has weakened in the recent past. This has led to an export push for Russian steel in India. Further, the Russian exporters have a restricted access to traditional markets like the European Union and Ukraine resu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try constitute unforeseen development. (VIII) Serious Injury and Threat of Serious Injury 25. Serious Injury: The applicant have claimed that the increased imports of 'PUC' have caused and are threatening to cause serious injury to the domestic producers of 'PUC' as indicated by the following factors: (a) Production: The production of the domestic industry remained at the same level during 2013-14, 2014-15 and 2015-16(Annualised) as shown in the following table:- YEAR Production of DI (MT) Index 2013-14 17881187 100 2014-15 17836937 100 2015-16(Q1) 4456795 2015-16(A) 17827180 100 (b) Market Share of domestic producers in domestic demand: Market share of the applicants has fallen in the most recent period. Applicants had a market share of 45% in 2013-14 which fell to 37% during 2015-16 (A). During the same period, the market share of import increased from 6% to 12%, as shown below:- Financial Year Total Import (MT) Sales of DI (MT) Sales of other Indian Producers (MT) Captive sale of DI(MT) Captive sale of Others (MT) Total Demand (MT) Market Share (%) DI Import 2013-14 1292099 10342565 2994323 4274000 4000724 22903711 45 6 2014- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from further injury. 27. As may be seen from the above, a threat of serious injury is also present in the current investigation. There is a huge increase in imports over the period of investigation which has caused serious injury to the domestic industry and in all likelihood, the imports of the PUC will further increase and continue to threaten the domestic industry with serious injury. The market share of domestic industry decreased from 45% in 2013-14 to 37% during 2015-16(A) whereas during the same period, the market share of import increased from 6% in 2013-14 to 12% in 2015-16(A) which is a cause of concern. (IX) Causal Link between Increased Import and Serious injury or Threat of Serious injury: 28. The Panel on Korea - Dairy set forth the basic approach for determining "causation": "In performing its causal link assessment, it is our view that the national authority needs to analyse and determine whether developments in the industry, considered by the national authority to demonstrate serious injury, have been caused by the increased imports. In its causation assessment, the national authority is obliged to evaluate all relevant factors of an objective an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase year 2013-14 and domestic industry is losing market share which has declined from 45 % to 37 %. The import price per ton has declined sharply. Consequently, the domestic industry has suffered losses in the recent past. It is, thus, evident that injury to the domestic industry has been caused by the increased imports. (X) Developing Nations: 31. The percentage of imports from developing nations has also been examined. The import of the product under consideration is originating from more than one developing nation whose aggregate percentage of import into India is more than 9% .Therefore, in terms of Ntfn.103/98 cus dated 14-12-98 as amended, the import of product under consideration originating from developing nations will also attract Safeguard Duty in terms of proviso to Section 8B of the Customs Tariff Act, 1975. (XI) Critical Circumstances: 32. As per Rule 2(b) of Custom Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 the "Critical circumstances" means circumstances in which there is clear evidence that imports have taken place in such increased quantities and under such circumstances as to cause or threaten to cause serious injury to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n imports without any further loss of time. c) The domestic industry has claimed that they are also receiving counter offers from many customers to supply the subject goods at substantially lower prices (lower than cost of production). The customers quote the prices offered by Chinese and other suppliers to force the reduction in prices of subject goods. The Chinese and Other producers have offered a price in the range of USD 320-350 per MT during the month of July 2015 for supplies to be effected in September-October, 2015. Accordingly, the prices of the domestic industry are spiraling down further. There is clear evidence that increased imports have caused and are also threatening to cause serious injury to the domestic industry. d) The market share of import has risen from 6% in 2013-14 to 12% in 2015-16(A). The domestic industry has been forced to keep production, Sales, capacity utilization on hold due to surge in imports. Inventories with the domestic industry are rising. Further, the domestic industry is facing financial losses. e) The preliminary determination thus shows that excessive surge in import with falling unit price during the entire period of investigation; poo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
