Full Text
EXTRAORDINARY
PART I—Section 1
PUBLISHED BY AUTHORITY
No. 245] NEW DELHI, FRIDAY, SEPTE MBER 29, 2023/ASVINA 7, 194 5
CG-DL-E-09102023-249267
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[....]
https://www.dgtr.gov.in/sites/default/files/Initiation%20Notification_%20Met ronidazole%20 -%20ENGLISH%20%281%29.pdf
https://www.dgtr.gov.in/sites/default/files/adfin_metronidazole_SSR_china.pdf ; अंजतम िांच परर णाम सं .15/18/2010 - डीिीएडी ददिांक 29 िूि ,
13 https://www.dgtr.gov.in/sites/default/files/adfin_SSR2_metronidazole_chinaPR.pdf
https://www.dgtr.gov.in/sites/default/files/adfin_SSR2_metronidazole_chinaPR.pdf
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1.
2018 -19 *** *** *** ***
2.
2019 -20 *** *** *** ***
3.
2020 -21 *** *** *** ***
4.
पीओआई– एच1 *** *** *** ***
5.
6.
पीओआई (2021 -22) *** *** *** ***
जलजमटेड *** *** *** *** 10-15%
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19 2019 -
20 2020 -
(2021 -
22)
5. कुल आयात एमटी 865 662 397 147 338 485
19 2019 -
20 2020 -
(2021 -
22)
3. कुल आयात एमटी 865 662 397 147 338 485
को छोडकर) % *** *** *** *** *** ***
सजहत) % *** *** *** *** *** ***
8. कुल आयात % 97% 100% 100% 100% 100% 100%
(2018 -
2022)
3. कुल आयात एमटी 865 147 338 485 799
20 2020 -
(2021
-22)
5. कुल आयात % *** *** *** *** *** ***
-
2011* 2018 -
19 2019 -
20 2020 -
(2021 -
22)
6. कुल आयात एमटी 1,133 1,141 865 662 397 485
को छोडकर) एमटी 1,867 1,782 *** *** *** ***
% 9.82% *** *** *** ***
% 26.14
% 0% 0% 0% 0%
% 58.88
% *** *** *** ***
(2021 -22)
2. पहुंच मूल् य रू./एमटी 7,87,082 7,46,700 8,30,524 8,40,696 8,36,797 8,37,977
5. कीमत कट ती % *** *** *** *** *** ***
रेंि सूचीबध द (0-5) (0-5) (0-5) (0-5) 0-5 0-5
19 2019 -
20 2020 -
(2021 -
22)
82 7,46,7
00 8,30,5
24 8,40,696 8,36,797 8,37,9
19 2019 -
20 2020-
(2021 -
22)
4. घरेलू एमटी *** *** *** *** *** ***
5. आयात एमटी *** *** *** *** *** ***
6. क्षमता एमटी *** *** *** *** *** ***
जववरण यूओएम 2018 -19 2019 -20 2020 -21 2021 -22 एच1 2021 -22 एच2 2021 -22
आबध द एमटी *** *** *** *** *** ***
-19 2019 -
(2021 -
22)
5. कुल आयात % *** *** *** *** *** ***
-
2011* 2018 -
19 2019 -
20 2020 -
(2021 -
22)
6. कुल आयात एमटी 1,133 1,141 865 662 397 485
% 9.82% *** *** *** ***
% 26.14
% *** *** *** ***
% 58.88
% *** *** *** ***
(2021 -22)
8. िकद लाभ रू. लाख *** *** *** *** *** ***
9. आरओसीई % *** *** *** *** *** ***
(2021 -22)
3. पहुंच कीमत रू./एमटी 7,87,082 7,46,700 8,30,524 8,40,696 8,36,797 8,37,977
मई-21 *** ***
िूि-21 *** ***
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1 2018 -19 रू./केिी *** *** *** ***
2 2019 -20 रू./केिी *** *** *** ***
3 2020 -21 रू./केिी *** *** *** ***
4 2021 -22 (एच1) रू./केिी *** *** *** ***
5 2021-22 (एच 2) रू./केिी *** *** *** ***
6 2022 -23 (एच 1) रू./केिी *** *** *** ***
2 अ् य लागत *** *** *** ***
जववरण यूओएम 2018-19 2019 -20 2020 -21 2021 -22
2021 -22
एच 2* 2021 -
22 2022 -23
सजहत) एमटी *** *** *** *** *** *** ***
छोडकर) % *** *** *** *** *** *** ***
छोडकर) % *** *** *** *** *** *** ***
सजहत) % *** *** *** *** *** *** ***
जववरण यूओएम 2018 -19 2019 -20 2020 -21 2021 -22 (एच1) 2021 -22 (एच 2) 2022 -23
जववरण यूओएम 2018 -19 2019 -20 2020 -21 2021 -22
एच1 2021 -22
(2021 -22)
जववरण यूओएम 2018 -19 2019 -20 2020 -21 2021 -22 (एच 1) 2021 -22 (एच 2) 2022 -23
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https://main.mohfw.gov.in/sites/default/files/Notification%20and%20Report%20on%20National%20List%20of%20Essential%20Medici
2021 -22 ******* *******
कुल योग ******* *******
2018 -19 *** *** *** ***
2019 -20 *** *** *** ***
2020 -21 *** *** *** ***
एच1 21-22 *** *** *** ***
एच 2 21-22 *** *** *** ***
2021 -22 *** *** *** ***
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MINISTRY OF COMMERCE AND INDUSTRY
(Department of Commerce )
(DIRECTORATE GENERAL OF TRADE REMEDIES )
NOTIFICATION
New Delhi, the 29th Septe mber, 2023
FINAL FINDINGS
Case No. A.D (OI) -03/2022
Subject: Anti -dumping investigation concerning imports of " Metroni dazole” originating in or exported from
China PR.
F. No. 6/3/2022 -DGTR .—Having regard to the Customs Tariff Act 1975 as amended from time to time
(hereinafter referred as the ‘Act’) and the Customs Tariff (Identification, Assessment and Collection of Anti -dumping
Duty on Dumped Articles and for Determination of Injury) Rules, 1995 thereof, as amended from time to time
(hereinafter referred as the ‘AD Rules’ or the ‘Anti -dumping Rules’ or the ‘Rules’);
A BACKGROUND OF THE CASE
2. Aarti Drugs Limited (“hereinafter referred to as the ‘applicant’ or the ‘domestic industry’) has filed an
application before the Designated Authority (hereinafter referred to as the ‘Authority’), on behalf of the
domestic industry, in accordance with the Customs Tariff Act, 1975 and the Anti-dumping Rules for the
initiation of an anti -dumping investigation concerning imports of the “ Metronidazole ” (hereinafter also referred
to as the ‘product under consideration’ or ‘PUC’, or the “subject goods”) from China PR (hereinafter also
referred t o as the ‘subject country’).
3. The Authority, on the basis of sufficient prima facie evidence submitted by the applicant, issued a public notice
vide Notification No. 6/3/2022 -DGTR dated 30th September 2022, published in the Gazette of India –
Extraordinary, initiating the subject investigation in accordance with Section 9 of the Act read with Rule 5 of the
AD Rules, 1995 to determine the existence, degree and effect of alleged dumping of the subject goods and to
recommend the appropriate amount of anti -dump ing duties, which if levied, would be adequate to remove the
alleged injury to the domestic industry.
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B PROCEDURE
4. The following procedure has been followed with regard to this investigation:
a. The Authority notified the Embassy of the subject country in India about the receipt of the present anti -
dumping application before proceeding to initiate the investigation in accordance with Rule 5(5) of the
AD Rules, 1995.
b. The Authority issued a public notice dated 30th September 2022 published in the Gazette of India –
Extraordinary, initiating the anti -dumping investigation concerning imports of the subject goods from
the subject country.
c. The Authority sent a copy of the initiation notification dated 30th September 2022 to the Embassy of
the subject country i n India, the known producers and exporters from the subject country, the known
importers/users of the subject imports and other interested parties, as per the information provided by
the applicant. The interested parties were requested to provide relevant information in the form and
manner prescribed in the initiation notification and make their submissions known in writing within the
time limits prescribed in the initiation notification.
d. The Authority also provided a copy of the non -confidential version of the application filed by the
applicant to the known producers/exporters, known importers/users and to the Embassy of the subject
country in India in accordance with Rule 6(3) of the AD Rules, 1995 through its email dated 15th
November 2022.
e. The Embassy of the subject country in India was also requested to advise the exporters/producers from
the subject country to submit their responses to the questionnaire within the time limit prescribed by
the initiation notification. The Embassy of the subject country w as also sent a copy of the letter and
questionnaire sent to the producers/exporters along with the names and addresses of the known producers
/exporters from the subject country.
f. The Authority sent questionnaires to the known producers/exporters in the subject country in
accordance with Rule 6(4) of the AD Rules, 1995.
g. In response to the above notification, the following producer/exporter from the subject country has
submitted the exporter questionnaire response:
Subject country Producer/Exporter
China PR M/s Hubei Hongyuan Pharmaceutical Technology Co., Ltd
h. The producers/exporters from the subject country who have not submitted the questionnaire response or
have not cooperated in the investigation have been treated as non – cooperative in the investigatio n.
i. The Authority also sent questionnaires to the known importers/users of the subject goods in India calling
for necessary information in accordance with Rule 6(4) of the AD Rules, 1995.
j. No importers/users submitted the importer/user responses to the quest ionnaire issued by the Authority.
k. On 18th September 2023, the Directorate received a letter from an importer and user industry, [***],
seeking an opportunity to present its comments before the Authority and participate in the investigation.
[***] further a lleged that despite being a regular customer of the domestic industry, the domestic
industry had deliberately left its name out of the anti -dumping application. It further sought an extension
of the timeline for completion of the investigation. It is noted that [***] sought to participate at the fag
end of the investigation. Trade remedial investigations comprise several stages, with each stage having
its own timeline. The timeline for registration of interested parties has been long over. Further, the
Directorate had taken all steps to publicise the initiation of the investigation, including publication of the
notification in the Gazette of India as well as publicised the initiation of the investigation on its website.
The investigation team also sent an em ail regarding the initiation of the investigation to all known
imports and users as provided by the applicant in the application. Granting opportunity at this final
juncture would prejudice the rights of other interested parties. The investigating team has also, through
its detailed letter dated 21st September 2023 sent through email, informed [***] regarding the same.
l. The Directorate General of Systems & Data Management (DG Systems) was requested to provide
transaction -wise details of the imports of the su bject goods for the past injury investigation period and
the period of investigation. A request was also made to the Directorate General of Commercial
Intelligence and Statistics (DGCI&S) to provide transaction -wise details of the imports of the subject
goods for the injury investigation period and the period of investigation. The same has been received by
the Authority and has been considered in this final finding.
m. In accordance with Rule 6(6) of the AD Rules, 1995 the Authority provided an opportunity to the
interested parties to present their views orally regarding the subject investigation through a public
hearing held via video conferencing on 8th February 2023. The interested parties who presented
their views in the oral hearing, were requested to fil e written submissions of the views expressed
orally, followed by rejoinder submissions, if any. The interested parties were further directed to
share the non -confidential version of the written submissions submitted by them with the other
interested partie s.
n. The non-injurious price (hereinafter referred to as the ‘NIP’) has been determined based on the cost of
production and reasonable profits of the subject goods in India, based on the information furnished by
the domestic industry on the basis of General ly Accepted Accounting Principles (GAAP) and Annexure
III to the AD Rules, 1995 so as to ascertain whether anti-dumping duties lower than the dumping margin
would be sufficient to remove injury to the domestic industry.
o. The information submitted by the app licant has been examined and verified during on site -verification to
the extent deemed necessary and has been relied upon for the present final finding.
p. The examination and verification of the information submitted by the cooperating producers/exporters
from the subject country were also carried out to the extent deemed necessary and have been relied upon
for the purpose of the present final finding.
q. The period of investigation (POI) for the purpose of the present investigation is 1st April, 2021 to 31st
March 2022 (12 months). The injury period for the present investigation is 1st April 2018 – 31st March
2019, 1st April 2019 – 31st March 2020, 1st April 2020 – 31st March 2021 and the POI.
r. The Authority made available the non -confidential version of the evi dence presented by various interested
parties on mutual basis in the manner prescribed through Trade Notice No. 01/2020 dated 10th April 2020.
The information/submissions provided by the interested parties on a confidential basis were examined
concerning t he sufficiency of such confidentiality claims. On being satisfied as to the sufficiency
of the confidentiality claims filed by the interested parties, the Authority has considered such
information/submissions as confidential. In case of non -acceptance of confidentiality claims, the
interested parties were directed to submit the non -confidential version of the same and circulate it to the
other interested parties.
s. The Authority has considered all the arguments raised and information provided by all the int erested
parties at this stage, to the extent the same are supported with evidence and considered relevant to the
present investigation.
t. The Authority circulated the disclosure statement containing all essential facts under consideration for
making final re commendations to the Central Government to all interested parties on 19th September
2023. The interested parties were directed to file their comments on the disclosure statement by 25th
September 2023.
u. The Authority has examined all post – disclosure comme nts made by the interested parties in these final
findings to the extent deemed relevant. Any submission which was merely a reproduction of the previous
submission and which had been adequately examined by the Authority have not been repeated for the
sake of brevity.
v. ‘***’ in this document represents information furnished by an interested party on confidential basis and
so considered by the Authority under Rules 7 of AD Rules, 1995.
w. The exchange rate for the POI (April 2021 - March 2022) adopted by the Auth ority for the subject
investigation is 1 US $= Rs. 75.37.
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C PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE
5. The product under consideration (hereinafter also referred to as the “PUC”) as defined at the stage of
initiation was as follows:
“3. The product under consideration is “metronidazole” originating in or exported from China PR.
[…]
5. Uses: The product is used in treatment of bacterial infections and parasitic infections. It is used in cases of
amoebiasis [amoebic dysentery], trichomoniasis [STD], gi ardiasis [beaver fever], gingivitis [gum
inflammation], acute ulcerative, anaerobic vaginosis [vaginal inflammation] caused by over growth of
natural bacterial found in the tracts.
6.Tariff classification: The product under consideration is classified unde r Chapter 29 of the Customs Tariff
Act, 1975 under subheading 293329 of the Tariff Classification. The product under consideration is imported
under the HS Code 29332920. The classification is indicative only and is not binding on the scope of the
investig ation.”
C.1 Submissions made by the other interested parties
6. The other interested parties have made the following submissions with respect to the product under
consideration:
a. The product under consideration has a history of anti -dumping duty imposed for more than 15 years.1
C.2 Submissions made on behalf of the domestic industry
7. The following submissions have been made on behalf of the domestic industry with regard to the product
under consideration:
a. The product under consideration is an anti -diarrhea and anti -microbial drug.2 It is used in the treatment of
bacterial infections and parasitic infections. It is used in cases of amoebiasis, trichomoniasis, post -operative
infection after surgery, giardiasis, acute ulcerative and gingivitis, vaginosis treatment of inf ection caused by
anaerobic micro formation.3
b. The product does not have any sub -category or sub -grades.4
c. The PUC is classified under Chapter 29 of the Customs Tariff Act, 1975 under the subheading 293329.5
1 Written Submissions filed by Hubei Hongyuan Pharmaceutical Technology Co., Ltd., page 2 (hereinafter “Written Submissions of Hube i”).
2 Written Submissions filed by the Applicant, para 9 (hereinafter “Written Submission of the Applicant”).
3 Id., para 12.
4 Id., para 9.
5 Id., para 13.
d. The PUC is being imported under HS Code 2933 29 20.6 This code is prescribed for Metronidazole and
Metronidazole benzoate, however, there are insignificant imports of Metronidazole benzoate.7
e. The basic customs duty applicable on the imports of the subject goods is 7.5%.8
f. The product manufactured by the applicant is ‘like article’ to the product being imported from the subject
country.9
C.3 Examination by the Authority
8. The submissions made by the interested parties and the domestic industry with regard to the product under
consideration have been examined an d addressed hereunder:
9. The product under consideration in the present investigation is Metronidazole. It is an anti -diarrhea and anti -
microbial drug, which is used in the treatment of bacterial infections and parasitic infections. It is used in
cases of am oebiasis, trichomoniasis, post -operative infection after surgery, giardiasis, acute ulcerative and
gingivitis, vaginosis treatment of infection caused by anaerobic micro formation.
10. The applicant has stated that the product is manufactured by condensing an intermediate compound, viz., 2-
Methyl 5 -Nitro Imidazole with ethylene oxide in the presence of formic acid [85%] and sulphuric acid
[98%]. Then an esterification reaction is carried out with methanol, which generates methyl formate [methyl
methanoate]. Th is esterification reaction is mass precipitated with liquor ammonia @ [24%] to isolate the
unreacted 2 -MNI. This isolated 2 -MNI is dried and reused in process. The washing mother liquor is
transferred to a multiple -effect evaporator for recovery of ammoniu m sulphate and mix glycol. The filtered
cake is transferred for separation, wherein caustic soda flakes and ice mix is used to isolate the crude
metronidazole. The wet crude metronidazole is decolorized with the help of charcoal and is further
crystallize d to isolate metronidazole. This isolated metronidazole is filtered. The wet material is dried in the
drier, unloaded and labelled as dry pure metronidazole.
11. The product under consideration is classified under Chapter 29 of the Customs Tariff Act, 1975 and is being
imported under the HS code 2933 29 20. However, the said customs classification is only indicative in
nature, and is in no way binding on the scope of the present investigation.
C.3.1 Product under consideration and like article
12. The applicant has clai med that the article manufactured by them and the subject goods imported from the
subject countries are comparable in terms of physical and chemical characteristics, manufacturing process
and technology, functions and uses, product specifications, pricing, distribution and marketing and tariff
classification of the goods. The two are technically and commercially substitutable. The consumers have used
and are using the two interchangeably. The other interested party has not disputed the applicant’s claim wit h
respect to the goods manufactured by the domestic industry being a ‘like article’ to the subject goods. The
Authority, therefore, holds that the goods produced by the domestic industry are ‘like article’ to the subject
goods imported from the subject cou ntries in terms of Rule 2(d) of the AD Rules, 1995.
C.3.2 Scope of the PUC
13. No party has disputed the definition of the product under consideration as proposed by the applicant and as
defined by the Authority at the stage of the initiation of the investigation.10 It is further noted that the product
under consideration defined in the present investigation is similar to the product under consideration defined
in previous investigations concerning ‘metronidazole’.11 In view of the above, the Authority confirms the
scope of the PUC as defined at the stage of initiation.
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6 Initiation Notification F. No. 6/3/2022 -DGTR, “Initiation of anti -dumping investigation concerning imports of “Metronidazole”
originating in or exported from China PR”, 30th September 2022, (hereinafter “ Initiation Notificatio n”)
https://www.dgtr.gov.in/sites/default/files/Initiation%20Notification_%20Metronidazole%20 -%20ENGLISH%20%281%29.pdf .
7 Application for imposition of Anti -Dumping Duty concerning imports of “Metronidazole” from China PR, filed by Aarti Drugs Limited, para 21
(hereinafter “ Application ”).
8 Notification No. 50/2017 – Customs, dated 30th June 2017, issued by the Department of Re venue, Ministry of Finance, Government of India.
9 Application, para 34.
10 Initiation Notification, para 3.
11 Final Findings No. 17/1/99 dated 14th July 2000, “Anti -dumping investigation concerning imports of Metrodinazole from China PR”, para 3,
https://www.dgtr.gov.in/sites/default/files/Final -Finding_24.pdf ; Final Findings (Sunset Review) No. 15/9/2003 -DGAD dated 5th April 2006, “Anti -
dumping (Sunset Review) investigation co ncerning imports of Metronidazole originating in or exported from China PR”, para 5,
https://www.dgtr.gov.in/sites/default/files/adfin_metronidazole_SSR_china.pdf ; Final Findings No. 15/18/2010 -DGAD dated 29th June 2012,
“Sunset Review of anti -dumping duty imposed concerning imports of ‘Metronidazole’ originating in or exported from China PR – Final Findings,
para 13, https://www.dgtr.gov.in/sites/default/files/adfin_SSR2_metronidazole_chinaPR.pdf .
D SCOPE OF DOMESTIC IN DUSTRY AND STANDING
D.1 Submissions made by the other interested party
14. The following submissions have been made by the other interested party with regard to the scope of the
domesti c industry and its standing:
a. The applicant cannot be considered as an eligible domestic industry under Rule 2(b) of the Rules since it
has imported the subject goods from the subject country during the POI.12
b. In the 2nd Sunset Review investigation concernin g imports of ‘Metronidazole’ from China PR, the
Authority therein had excluded the applicant from the scope of the domestic industry under similar
circumstances where the applicant had imported Metronidazole from China PR under a duty exemption
scheme.13
c. The application filed by the applicant for the 3rd sunset review of the previous investigation on
Metronidazole was also rejected by the Authority on the grounds that it had imported Metronidazole from
China PR under advance licenses.14
d. The other interested party claimed that the High Court of Delhi, in Writ Petition No. 7464/2017, had
ordered for the termination of the previous investigation (3rd SSR) concerning Metronidazole since the
applicant was not an eligible ‘domestic industry’.15
e. The facts of the pr evious investigations concerning Metronidazole are similar to the instant investigation.
Since Aarti Drugs Limited was not considered as an eligible petitioner during the two previous sunset
review investigations, they should not be considered as an eligib le ‘domestic industry’ for the purpose of
the present investigation.16
f. The applicant is also related to a producer of the subject goods in China PR. The applicant continues to
hold investments in the Chinses entity and was previously involved in joint ventu re with the Chinese
entity.17
D.2 Submissions made on behalf of the domestic industry
15. The following submissions have been made by the applicant with regard to the scope of the domestic
industry and its standing:
a. Apart from the applicant, there is one other dome stic producer of the product under consideration in
India.18
b. The applicant accounts for [***]%of the total domestic production of the product under consideration in
India.19
c. The applicant has imported the PUC during the POI in volumes that are not significan t in comparison to
its production of the like article in India.
d. The applicant has made imports under the advance authorization scheme for the production of
Metronidazole Benzoate in order to meet its export obligations.20 The entire imports made by the appl icant
have been captively consumed and not sold in the domestic market.21
e. The determinations pertaining to the eligibility of a ‘domestic industry’ under Rule 2(b) is case -specific,
company -specific, period -specific and situation -specific.22 Therefore, there is no reason to link the
conclusions made by the Authority in previous investigations.
f. In the previous investigations, the volume of imports made by the applicant was very high, and amount to
about ***% of its total production. However, in the instant inv estigation, the applicant has imported a
12 Written Submissions of Hubei, page 5.
13 Id., pages 5 & 6.
14 Id., page 6.
15 Written Submissions of Habei, page 7.
16 Id., page 7.
17 Id., page 7.
18 Application, para 25.
19 Application, annexure “standing”.
20 Application, para 36.
21 Id.
22 Written Submissions of the applicant, para 11.
miniscule volume of the subject goods, which amounts to about ***% of its total production.23
g. In the previous investigation, the applicant had imported [***]MT of Metronidazole from China PR,
whereas, in the present investigation, the applicant has imported only [***]MT.24
h. Rule 2(b) is an exclusion -based definition and not an inclusion -based definition. The Authority, may
exclude the applicants from the scope of the domestic industry only if there are cogent reasons j ustifying
its exclusion.25
i. A domestic producer, under Rule 2(b) of the AD Rules, is automatically included within the scope of the
‘domestic industry’, and its exclusion must be specifically justified.26
j. The applicant has contended that in multiple investiga tions,27 the Authority had not excluded a domestic
producer from the definition of the ‘domestic industry’ where import volumes of such domestic producer
in relation to its total production is very low.28
k. The claim of the other interested party that the app licant was excluded from the scope of the domestic
industry in the 3rd SSR of the previous investigation is factually incorrect since the applicant was
considered as a ‘domestic industry’ by the Authority therein.
l. The claim of the other interested party th at the High Court of Delhi, in relation to the previous
investigation, had held that the applicant is ineligible to be considered as a ‘domestic industry’ is false and
misleading.29
m. It is false to state that a related company of the applicant is producing t he subject goods in the subject
country since the previous joint venture between the Chinese entity and the applicant has expired. Further,
there is no direct or indirect control exercised by either of the companies in the other company – in terms
of appoi ntment of board members. The two companies hold separate books of accounts and the applicant
has reduced its investments in the Chinese entity, etc.30
D.3 Examination of the Authority.
16. The submissions made by the applicant and the other interested party with re gard to the product under
consideration have been examined and addressed hereunder. The following issues have been raised by the
applicant and the other interested party with respect to the applicant’s standing:
i Whether the imports of the subject goods mad e by the applicant during the POI and the applicant’s
investment in a Chinese producer of the subject goods disqualify it from being considered as a ‘domestic
industry’ in terms of Rule 2(b)?
ii Whether the application requires the conditions under Rule 5(3) of the AD Rules?
D.3.1 Whether the imports of the subject goods made by the applicant during the POI and the applicant’s
investment in a Chinese producer of the subject goods disqualify it from being considered as a
‘domestic industry’ in terms of Rule 2(b)?
17. In the instant investigation, the applicant has admittedly imported [***]MT of the subject goods from China
PR.31 The applicant has also admitted that it was previously involved in a joint venture with a Chinese producer
of the subject goods, viz. Huanggang Yi nhe Aarti Pharmaceutical Co. Ltd., and continues to hold investments in
the said entity.32 It is also pertinent to note that in previous anti -dumping investigations concerning imports of
Metronidazole from China PR, the Authority had excluded the applicant (Aarti Drugs Ltd.) from the scope of
23 Written Submission of the applicant, para 12.
24 Rejoinder of the applicant, para 18.
25 Writt en submissions of the applicant, para 16.
26 Written Submission of the applicant.
27 Anti-dumping investigation concerning imports of Carbon Black used in rubber applications originating in or exported from Australi a, China PR,
Iran, Malaysia, Russia and Tha iland; Anti-Dumping investigation concerning imports of “Glazed/Unglazed Porcelain/ Vitrified tiles in polished or
unpolished finish with less than 3% water absorption”, originating in or exported from China PR; Anti -dumping investigation concerning import s of
Flat base Steel Wheels originating in/exported from China PR (some parameters); Anti -dumping investigation concerning imports of D ( -) Para
Hydroxy Phenyl Glycine Base (PHPG Base) originating in or exported from the European Union; Anti -dumping invest igation concerning imports
of Styrene Butadiene Rubber SBR of 1500 series and 1700 series originating in or exported from European Union, Korea RP & Tha iland; Anti -
dumping investigation involving imports of PVC Flex Films originating in or exported from Ch ina PR.
28 Rejoinder of the application, paras 15 & 16.
29 Rejoinder of the applicant, para 19.
30 Rejoinder of the applicant, para 20.
31 Rejoinder of the applicant, para 18.
32 Application, para 37.
the ‘domestic industry’ in terms of Rule 2(b) of the AD Rules since the applicant had imported the subject
goods during the POI.33
18. The other interested party, namely Hubei Hongyuan Pharmaceutical Technology Co. Ltd., has contended
that on account of the imports made by the applicant and in light of the conclusions of the Authority in
previous investigations concerning Metronidazole, the applicant is ineligible to constitute a ‘domestic
industry’ in terms of Rule 2(b) o f the AD Rules.34 Hubei has further contended that the applicant is related
to a Chinese producer of the subject goods since it holds investments in the said entity, and this must
disqualify the applicant from the scope of the ‘domestic industry’.35
19. The app licant has argued that mere imports made by domestic producers does not automatically disqualify
such domestic producers from the scope of the ‘domestic industry’.36 According to the applicant, Rule
2(b) requires the Authority to consider whether there are any justifiable reasons to exclude a producer
from the scope of the domestic industry, and not whether such producer must be included . The applicant
has contended that as per Rule 2(b), domestic producers automatically fall under the definition of the
‘dom estic industry’, and they may be excluded only if sufficient reasons exist to justify their exclusion.37
The applicant submits that the other interested party has not provided valid reasons to justify the exclusion
of the applicant.
20. The applicant has furth er submitted that unlike in previous investigations, wherein the applicant had
imported [***%] of its total production (amounting to [***]MT) of the subject goods, during the POI for
the present investigation, the applicant has only imported [***%] of its total production (amounting to
[***]MT).38 The applicant has also consistently stated that it has imported the subject goods under
advance authorisation licenses in order to meet its export obligations. It has been claimed that all imports
of the subject go ods made by the applicants have been captively consumed in the production of the
exported product, and have not been cleared in the domestic market.39
21. With respect to the applicant’s investment in a Chinese producer of the subject goods (Huanggang), the
applicant has stated that the joint venture between the two companies has expired and currently no such
joint venture exists. Further, it has been stated that the applicant does not exercise any legal or operational
control over the Chinese producer. The app licant has submitted that it has not reported the Chinese
producer as a related entity in its annual reports, it has continuously been reducing its investments in the
Chinese producer, the two companies do not have consolidated books of accounts, the Chine se producer is
only shown as a long -term investment in the books of accounts of the applicant, the Chinese producer has
not directly exported any material in the Indian market, and the applicant does not hold any position the
board of directors and has not appointed any board members of the Chinese entity.40
22. The Authority recalls that under Rule 2(b) of the AD Rules, 1995, a domestic producer may be excluded
from the scope of the ‘domestic industry’ if it is an importer of the subject goods from the subjec t country,
or it is related to any exporters or importers of the alleged dumped goods.41 The use of the word ‘may’ in
Rule 2(b) of the AD Rules, 1995 suggests that the Authority has the discretion to even include the
domestic producers that are also importe rs of the subject goods into India within the scope of the
‘domestic industry’, or that are related to exporters or importers of the subject goods.
23. In the case of Gujarat Fertilizers & Chemicals Ltd. ,42 the High Court of Calcutta observed that the
questio n of whether a domestic producer which has imported the subject goods is disqualified from the
scope of ‘domestic industry’ under Rule 2(b) of the AD Rules must be examined based on the nature of
activities carried out by the domestic producer with respect to the imports made by it. In the above case,
the Calcutta High Court held that the producer therein, which had imported 15% of its total production of
the subject goods, qualifies as the domestic industry since such imports were made merely to meet its
33 Final Findings No. 15/18/2010 -DGAD dated 29th June 2012, “ Sunset Review of anti -dumping duty imposed concerning imports of
‘Metronidazole’ originating in or exported from China PR – Final Findings”, para 5,
https://www .dgtr.gov.in/sites/default/files/adfin_SSR2_metronidazole_chinaPR.pdf .
34 Written submissions of Hubei, pages 5 & 6.
35 Id., page 7.
36 Written submissions of the applicant, para 16.
37 Written submissions of the applicant, para 16.
38 Rejoinder of the applic ant, para 18.
39 Application, para 36; see also written submissions of the applicant, para 10.
40 Rejoinder of the applicant, para 20.
41 Rule 2(b) of the AD Rules, 1995 reads as under:
“domestic industry” means the domestic producers as a whole engaged in th e manufacture of the like article and any activity
connected therewith or those whose collective output of the said article constitutes a major proportion of the total domestic
production of that article except when such producers are related to the export ers or importers of the alleged dumped article
or are themselves importers thereof in such case the “domestic industry” may be construed as referring the rest of the
producers.
42 State of Gujarat Fertilizers & Chemicals Ltd. v. Designated Authority and Ors ., 2012 SCCOnLine Cal 8071.
customers’ demands. The High Court observed that the domestic producer was not carrying on the
business of import exclusively for trading purposes, and therefore there was no reason to exclude it from
the scope of ‘domestic industry’ under Rule 2(b) of the AD Rules. Further, in Century Plyboards ,43 the
Gauhati High Court, relying on the WTO Panel decision of EC – Fasteners (China) ,44 held that under
Rule 2(b) of the AD Rules, the Authority has some discretion “… to include the producers related to the
exporter s or importers of the dumped article or the importers themselves in the concept of “domestic
industry” .45
24. The applicant has imported lower volumes of the subject goods (in absolute and relative terms) during the
present investigation as compared to previou s investigations. Further, as stated by the applicant, all of its
imports of the subject goods have been made under the advance authorisation licenses to meet its export
obligations. The applicant continues to be engaged in the production and sales of the product under
consideration in India. The nature of the applicant appears to be that of a producer of the subject goods,
and the applicant does not appear to be in the business of carrying on imports exclusively for trading
purposes. In the light of the pr inciple laid down by the High Court of Calcutta in the case of Gujarat
Fertilizers & Chemicals Ltd. ,46 the Authority holds that the imports made by the applicant during the
period of investigation does not disqualify it from being considered as a ‘domestic industry’ in terms of
Rule 2(b) of the AD Rules.
25. With respect to the applicant’s relation to a producer of the subject goods in the subject country
(Huanggang Yinhe Aarti Pharmaceutical Co. Ltd.), the applicant has submitted that it has not reported
Huangg ang as a related entity in its annual reports, it has continuously been reducing its investments in
Huanggang, the two companies do not have consolidated books of accounts, Huanggang is only shown as
a long -term investment in the books of accounts of the a pplicant, Huanggang has not directly exported any
material in the Indian market, and the applicant does not hold any position in the board of directors and
has not appointed any board members of Huanggang.47 The applicant has also provided a letter wherein it
has submitted that it has only a [***%] stake in Huanggang Yinhe Aarti Pharmaceutical Co. Ltd. and does
not exercise any control over the management of the said company.48 The letter further states that there are
no common directors, senior management pe rsonnel or key managerial persons between the two
companies. Further the letter states that the shareholding by the applicant does not give it any rights to
appoint any of the board members of Huanggang.
26. In light of the decision of the Gauhati High Court i n Century Plyboards ,49 the Authority holds that the
applicant’s relation to a producer of the subject goods in the subject country does not disqualify the
applicant from being considered as a ‘domestic industry’ in terms of Rule 2(b) of the AD Rules.
27. The A uthority therefore holds that the applicant constitutes a ‘domestic industry’ in terms of Rule 2(b) of
the AD Rules.
D.3.2 Whether the application requires the conditions under Rule 5(3) of the AD Rules?
28. As per Rule 5(3) of the AD Rules, an application for anti -dumping investigation must be made ‘ by or on
behalf of the domestic industry ’. The ‘standing’ requirement of Rule 5(3) of the AD Rules has the
following two conditions:
i the domestic producers supporting the application must account for not less than 25% o f the total domestic
production of the product under consideration in India;50 and
ii the application must be supported by producers whose collective output constitutes more than 50% of the
total production of the like article produced by that portion of the domestic industry expressing either
support for or opposition to the application.51
43 Century Plyboards (I) Ltd. v. Union of India and Ors., 2022 SCCOnLine Gau 643.
44 WTO Panel Report, European Commission - Definitive Anti -Dumping Measures on Certain Iron or Steel Fasteners from China (DS 397),
adopted on 28 Ju ly 2011, WT/DS397/R
45 Century Plyboards, 2022 SCCOnLine Gau 643, para 54.
46 State of Gujarat Fertilizers & Chemicals Ltd. , 2012 SCCOnLine Cal 8071.
47 Rejoinder of the applicant, para 20.
48 Letter from Aarti Drugs Ltd, dated 27th July 2023.
49 Century Plyboards (I) Ltd. v. Union of India and Ors., 2022 SCCOnLine Gau 643.
50 Proviso to Rule 5(3)(a) of the AD Rules, which reads as under:
Provided that no i nvestigation shall be initiated if domestic producers expressly supporting the application account for less
than twenty -five per cent of the total production of the like article by the domestic industry, and
51 Explanation to Rule 5(3) of the AD Rules, whic h reads as under:
Explanation. - For the purpose of this rule the application shall be deemed to have been made by or on behalf of the domestic
industry, if it is supported by those domestic producers whose collective output constitute more than fifty per cent of the total
production of the like article produced by that portion of the domestic industry expressing either support for or opposition, as
the case may be, to the application.
29. The applicant has stated that apart from it, M/s. Unichem Laboratories is also engaged in the production of
the product under consideration in India.52 The applicant has subm itted that M/s. Unichem Laboratories
does not sell the PUC in India, and its entire production of the PUC is meant for export operations.53 The
following table enumerates the production figures of the domestic producers of the like article as
considered at the stage of initiation:
SN Name of the domestic producer Status of
the
producer Production Volumes* Production
share* Production
share range
1 Aarti Drugs Limited Applicant *** MT ***% 80-85%
2 Unichem Laboratories Neutral *** MT ***% 15-20%
3 Total *** MT ***% 100%
*Figures during the period of investigation (i.e. April 2021 to March 2022)
30. It is seen that the applicant’s share in total domestic production was more than 25% of the eligible
domestic production during the POI. Thus, the first limb of th e requirement laid down in Rule 5 (3) (a) is
fulfilled. With respect to the second condition, it is noted that the volume of only such domestic producers
is to be taken into account who have either expressed support or opposition to the application. As the other
eligible producer has not expressed opposition to the application at the stage of initiation, it can be
concluded that the application is supported by domestic producers whose collective output constitute more
than 50% of the production among the pr oducers which had expressed either it “support or opposition” to
the application. Thus, the requirement of the second limb of Rule 5 (3) of the AD Rules, 1995 was also
fulfilled.
31. Accordingly, the Authority holds that the applicant constitutes ‘domestic in dustry’ within the meaning of
Rule 2(b) of the AD Rules, 1995 and considers that the application satisfies the criteria of standing in
terms of Rule 5(3) of the AD Rules, 1995.
****
E CONFIDENTIALITY
32. With regard to the confidentiality of the information/data submitted by the interested parties, Rule 7 of the
AD Rules provides as follows:
Confidential information: (1) Notwithstanding anything contained in sub -rules (2), (3) and (7) of rule 6,
sub-rule (2) of rule 12, sub -rule (4) of rule 15 and subrule (4) of rule 17, the copies of applications
received under sub -rule (1) of rule 5, or any other information provided to the designated authority on a
confidential basis by any party in the course of investigation, shall, upon the designated authority being
satisf ied as to its confidentiality, be treated as such by it and no such information shall be disclosed to any
other party without specific authorization of the party providing such information.
(2) The designated authority may require the parties providing in formation on confidential basis to furnish
non-confidential summary thereof and if, in the opinion of a party providing such information, such
information is not susceptible of summary, such party may submit to the designated authority a statement
of reaso ns why summarization is not possible.
(3) Notwithstanding anything contained in sub -rule (2), if the designated authority is satisfied that the request
for confidentiality is not warranted or the supplier of the information is either unwilling to make th e
information public or to authorise its disclosure in a generalized or summary form, it may disregard such
information.”
33. No interested party has made any submission with regards to the confidentiality. The information and data
submitted by the interested party and the domestic industry on a confidential basis was examined with
regard to the sufficiency of the confidentiality claims. On being satisfied, the Authority has accepted the
confidentiality claims wherever warranted, and such information has been c onsidered confidential and not
disclosed to the other interested party. Wherever required, parties providing information on a confidential
basis were directed to provide a sufficient non -confidential version of the information filed by them on a
confidenti al basis. Parties were directed to share the non -confidential version of their submissions through
e-mails.
*****
52 Application, para 30.
53 Id.
Market Economy Treatment (MET), Normal Value, Export Price & Determination of Dumping Margin
F MARKET ECONOMY TREAT MENT (MET) AND NORMA L VALUE
F.1 Submissions of the other interested party
34. The other interested party has made the following submissions with respect to the market economy treatment
of China PR:54
a. China’s Accession Protocol to the WTO expired on 11th December 2016, and therefore China PR sh ould
be treated as a market economy.
b. In EC – Fasteners (China) , the Appellate Body has held that China PR automatically obtains a market -
economy status upon the expiry of Article 15 of China’s Accession Protocol to the WTO.
c. The WTO Agreement and China’s A ccession Protocol to the WTO must be interpreted in good faith and
based on the principle of ‘ pacta sunt survanda ’. India has an obligation to grant market -economy status to
China PR after the expiry of Article 15 of China’s Accession Protocol.
d. Various oth er jurisdictions such as EU and USA have treated China as a market -economy country after
the expiry of Article 15 of China’s Accession Protocol.
e. The intention of the framers of the Agreement was to restrict the non -market economy status of China PR
to 15 y ears only.
f. The understanding of the EU and the USA at the time of negotiating China’s accession to the WTO was
that the non -market economy treatment of China would be in place only for 15 years.
g. Regardless of how China PR is classified in the domestic law s of India, there is an international obligation
to treat China PR as a market -economy country.
F.2 Submissions of the domestic industry
35. The domestic industry has made the following submissions with respect to the market economy treatment
of China PR:55
a. Even t hough Article 15(a)(ii) of China’s Accession Protocol to the WTO has expired 15 years from the
date of China’s accession to the WTO, Article 15(a)(i) of the Accession Protocol continues to remain in
force, and permits the treatment of China as a non -market economy.
b. The Chinese producers must establish, with evidence that market economy conditions exist in their
country for their claim of market -economy treatment to be accepted.
c. The domestic selling price of Chinese producers/exporters must not be accepted unless it can be
established that the cost and domestic prices are appropriate, and reasonably reflect the cost and price of
the product under consideration.
d. Domestic cost and prices cannot be adopted in a situation where there is state interference in
determination of costs and prices.
e. Domestic costs and prices cannot be adopted unless the responding exporters establish that the prices of
major inputs substantially reflect the market value. In a situation where Chinese producers claim that raw
material pri ces are substantially lower than Indian and international raw material prices, it must be
concluded that prices of inputs reported by the responding exporters are distorted.
f. Domestic cost and prices cannot be adopted unless the responding exporter establis h that their books are
audited in line with Chinese GAAP and international accounting standards.
g. An examination must be made about the appropriateness of the costs claimed by the responding exporters.
h. There is no reasonable information available as to the price of the subject goods in a market economy
third country or price from such third country to other countries, including India. Therefore, the normal
value may be constructed on the basis of cost of production with reasonable addition for selling and
general administration, and profits.
54 Written Submissions of Hebei, pages 17 t o 22.
55 Application, paras 41 to 48
F.3 Examination by the Authority
36. It is noted that Hubei Hongyuan Pharmaceutical has argued for treatment for China PR as a market
economy country. The argument is based on the premise that with the expiration of Article 15 (a) (ii) of
China’s Accession Protocol on 11th December 2016, WTO members ( including India) are under an
obligation to treat China PR as a market economy country. Hubei has placed reliance on the WTO
Appellate Body Report in EC – Fasteners56 to substantiate its claim. The Authority notes that Hubei’s
reliance on the Appellate Body’s Report in EC – Fastener is misconceived. The question before the
Appellate Body in that dispute did not pertain to the computation of normal value but rather related to the
compu tation of export price.57
37. Article 15 of China’s Accession Protocol to the WTO provides as follows:
"Article VI of the GATT 1994, the Agreement on Implementation of Article VI of the General Agreement
on Tariffs and Trade 1994 ("Anti -Dumping Agreement") and the SCM Agreement shall apply in
proceedings involving imports of Chinese origin into a WTO Member consistent with the following:
(a) In determining price comparability under Article VI of the GATT 1994 and the Anti -Dumping Agreement,
the importing WTO Member shall use either Chinese prices or costs for the industry under investigation
or a methodology that is not based on a strict comparison with domestic prices or costs in China based on
the following rules:
(i) If the producers under investigation c an clearly show that market economy conditions prevail in the
industry producing the like product with regard to the manufacture, production and sale of that
product, the importing WTO Member shall use Chinese prices or costs for the industry under
investi gation in determining price comparability;
(ii) The importing WTO Member may use a methodology that is not based on a strict comparison with
domestic prices or costs in China if the producers under investigation cannot clearly show that
market economy co nditions prevail in the industry producing the like product with regard to
manufacture, production and sale of that product.
(b) In proceedings under Parts II, III and V of the SCM Agreement, when addressing subsidies described in
Articles 14(a), 14(b), 14(c) and 14(d), relevant provisions of the SCM Agreement shall apply; however, if
there are special difficulties in that application, the importing WTO Member may then use methodologies
for identifying and measuring the subsidy benefit which take into acc ount the possibility that prevailing
terms and conditions in China may not always be available as appropriate benchmarks. In applying such
methodologies, where practicable, the importing WTO Member should adjust such prevailing terms and
conditions before considering the use of terms and conditions prevailing outside China.
(c) The importing WTO Member shall notify methodologies used in accordance with subparagraph (a) to the
Committee on Anti -Dumping Practices and shall notify methodologies used in accord ance with
subparagraph (b) to the Committee on Subsidies and Countervailing Measures.
(d) Once China has established, under the national law of the importing WTO Member, that it is a market
economy, the provisions of subparagraph (a) shall be terminated p rovided that the importing Member's
national law contains market economy criteria as of the date of accession. In any event, the provisions of
subparagraph (a)(ii) shall expire 15 years after the date of accession. In addition, should China establish,
pursuant to the national law of the importing WTO Member, that market economy conditions prevail in a
particular industry or sector, the nonmarket economy provisions of subparagraph (a) shall no longer
apply to that industry or sector."
38. The treatment of China PR as a non – market economy does not solely stem from Article 15 (a) (ii) –
which Hubei has claimed to have expired on 11th December 2016 – but also flows from the remaining text
of Article 15 i.e., subparagraph (a), as well as the broader rules set forth in Article VI of GATT 199458 and
56 Appellate Body Report, European Communities – Definitive Anti -Dumping Measures on Certain Iron or Steel Fasteners from China ,
WT/DS397/AB/R , adopted 28 July 2011
57 Id., para 288 : “We do not consider that the references in paragraph 15(a)(i) and (ii) to producers having to show that "market economy
conditions prevail … with regard to the manufacture, production and sale" of a product means that paragraph 15(a) permits any derogations also
with respect to the determination of export prices. We reach this conclusion because, when producers are not able to show that market economy
conditions prevail (including with regard to the sale of the product), paragraph 15(a) makes it clear that all an importing W TO Member is allowed
to do as a consequence is to "use a methodology that is not based on a st rict comparison with domestic prices or costs in China" .” (emphasis
supplied)
58 See Second Ad Note to GATT Article VI from Annex I, which reads as under:
2. It is recognized that, in the case of imports from a country which has a complete or substantially complete monopoly of its
trade and where all domestic prices are fixed by the State, special difficulties may exist in determining price comparability for
the purposes of paragraph 1, and in such cases importing contracting parties may find it necessary to take into account the
possibility that a strict comparison with domestic prices in such a country may not always be appropriate.
Article 2.2.1.1 of the WTO Anti -Dumping Agreement. As per the current international framework
emerging from Article 15 of China’s Accession Protocol, read with GATT Article VI and Article 2.2.1.1
of the Anti -Dumping Agreeme nt, there are no restrictions in treating China PR as an NME. It is noted that
although Article 15 (a)(ii) has expired, Article 2.2.1.1 of the Anti -Dumping Agreement read with the
Article 15(a)(i) of China’s Accession Protocol to the WTO indicate that prod ucers/exporters from China
PR may be required to prove that market economy conditions exist in China PR. Paragraph 8 of Annexure
I to the AD Rules stipulates that any country that has been determined to be, or has been treated as a non -
market economy count ry, is presumed to be a non -market economy. Exporters from such country may
rebut such a presumption by providing information/evidence stipulated in paragraph 8(3) of Annexure -I to
the AD Rules in the form of a response to the supplemental questionnaire is sued by the Authority.
Therefore, the burden is on the other interested party to prove that Market Economy Conditions prevail in
the subject country.
39. The Authority has a consistent practice of treating China PR as a Non -Market Economy. It is noted that
since the responding producer/exporter from China PR has not filed a response to MET/Supplementary
questionnaire to dispute the presumption that market economy conditions exist in China PR, the normal
value computation is required to be done as per the provi sions of paragraph 7 of Annexure I of the Rules,
which reads as under:
“7. In case of imports from non -market economy countries, normal value shall be determined on the basis
if the price or constructed value in the market economy third country, or the pr ice from such a third
country to other countries, including India or where it is not possible, or on any other reasonable basis,
including the price actually paid or payable in India for the like product, duly adjusted, if necessary, to
include a reasonabl e profit margin. An appropriate market economy third country shall be selected by the
designated authority in a reasonable manner, keeping in view the level of development of the country
concerned and the product in question, and due account shall be taken of any reliable information made
available at the time of selection. Accounts shall be taken within time limits, where appropriate, of the
investigation made in any similar matter in respect of any other market economy third country. The
parties to the in vestigation shall be informed without any unreasonable delay the aforesaid selection of
the market economy third country and shall be given a reasonable period of time to offer their comments. ”
40. It is noted that paragraph 7 of Annexure -I to the AD Rules sti pulate three methods of constructing the
normal value for Non -Market Economies: (a) on the basis of price or constructed value in a market
economy third country; (b) export price from a third country to other countries, including India; and (c) on
any othe r reasonable basis. The Authority notes that under the provisions of paragraph 7 of Annexure -I to
the AD Rules, the normal value must first be determined on the basis of the price or constructed value in a
surrogate country, or the price of the exports fro m such country to other countries, including India.
However, when such basis is not possible, only then the Authority can determine the normal value on any
other reasonable basis, including the price paid or payable in India.59
41. It is to be noted that no in formation/evidence has been provided by the parties for the construction of the
normal value on the basis of the first and the second methods. There is no data available with respect to
the price or constructed value of the subject goods produced in a mark et economy third country. Further,
the HS code under which the PUC is being imported also includes other products which are no covered in
the scope of the PUC. Therefore, extrapolating the export price of the subject goods from third country to
other count ries is not possible since the export data for the relevant HS code under which the PUC is being
imported also includes other products which are not covered in the scope of the PUC. There is also no
public data available with the Authority to determine the normal value from the above two methods. In the
absence of the above information/evidence, it is not possible for the Authority to determine normal value
on the basis of the first or second method. Therefore, the Authority has decided to construct normal value
based on the third method, i.e., on any other reasonable basis including the price actually paid or payable
in India. The Authority has constructed the normal value on the basis of the price paid or payable in India.
G EXPORT PRICE
G.1 Export price for Hub ei Hongyuan Pharmaceutical
42. Based on the information furnished in the exporter questionnaire response, the Authority notes that Hubei
is a producer and exporter of the subject goods from China PR. Hubei has exported 199 MT of the subject
goods directly to i ts unrelated customers in India during the POI. Hubei has provided the relevant
information in the form and manner required and has claimed adjustments on account of ocean freight,
insurance, inland transportation, port and other related expenses, credit c osts and bank charges. The
Authority has undertaken desk verification of the information submitted by Hubei to examine its claims
59 See Shenyang Matsushita S. Battery Co. Ltd. v. Exide Industries Ltd. & Ors., (2005) 3 SCC 39, paragraph 7.
and accordingly, the claims have been allowed. The net export price at ex -factory level for Hubei has been
determined after al lowing the due adjustments and the same is mentioned in the dumping margin table
below.
G.2 Export price for all other producers/exporters from China PR
43. The normal value and export price for all producers from China PR have been determined on the basis of
available facts and the same is mentioned in the dumping margin table below.
H DETERMINATION OF DUM PING AND DUMPING MAR GINS
H.1 Submissions of the domestic industry
44. The domestic industry has made the following submissions with respect to the determination of dumping
and dumping margins:
a. Inclusion of April to September 2021 for dumping and injury analysis is inappropriate since there was low
dumping in April 2021 to September 2021 as compared to October 2021 to March 2022.60
b. The dumping margin should be determined by c omparing the weighted average normal value to the
transaction wise export price.61
c. Annexure -1 of the AD Rule and Article 2.4.2 of the Anti -Dumping Agreement permit the Authority to
calculate the dumping margin by comparing the weighted average normal value to the prices of individual
export transactions if it is found that a pattern of export prices differ significantly among different
purchasers, regions or time periods, and if an explanation cannot be provided as to why such differences
cannot be taken int o account.62
d. Till 2020 -21, the net adjusted CIF price (CIF price of base year adjusted with raw material prices) of
imports was lower than the actual import price.63
e. The Chinese producers had increased their prices more than the change in raw material price s and were
not dumping in the domestic market. However, in the first half of 2021 -22, both the raw material cost and
import price increased, but the increase in import price was not in line with an increase in raw material
cost.64
f. In the first half of 2021 -22, the dumping margin was positive, however, because the volume of imports
was low during this period, the imports were not having any material impact on the prices of the domestic
industry.65
g. In the second half of 2021 -22, the export price had declined wh en the raw material price had increased,
and the dumping margin has intensified. This shows that there is a pattern of export prices which differs
sharply among different time periods.66
h. From almost no aggressive pricing in the first half, the exporters hav e resorted to aggressive dumping in
the second half of 2021 -22.67
i. The difference in pattern of export prices between different the first and the second half of the POI cannot
be addressed by an average -to-average determination since the export prices did n ot move in tandem with
the raw material prices.68
j. There is a substantial difference in dumping margin in the first half of the POI as compared to the second
half of the POI.69
k. The applicant referred to the Appellate Body70 decision, and investigations conduct ed by the US -
60 Written submiss ions of the applicant, para 17.
61 Id., para 18.
62 Written submissions of the applicant, paras 18 to 20.
63 Id., para 23.
64 Id., para 23.
65 Id.
66 Id., para 24.
67 Id., para 24.
68 Id., para 25.
69 Id., para 27.
70 Appellate Body Report, United States – Certain M ethodologies and Their Application to Anti -Dumping Proceedings Involving China ,
WT/DS471/AB/R and Add.1, adopted 22 May 2017, DSR 2017:III, p. 1423; Appellate Body Report, United States – Anti-Dumping and
Countervailing Measures on Large Residential Washers from Korea , WT/DS464/AB/R and Add.1, adopted 26 September 2016, DSR 2016:V,
p. 2275.
Department of Commerce71 and the EU72 to argue that in case there is a pattern of export prices which
differ significantly among different time periods, the investigating authority may resort to comparing the
weighted average normal value to eac h transaction of export price, regardless of the reasons for such
patterns.73
l. The applicant referred to the order of Ld. CESTAT in Kothari Sugars & Chemicals Ltd. v. Designated
Authority, wherein it was held that if volume of imports at a particular price l evel is sufficient enough to
have adverse impact on domestic selling prices, the same should be taken into account and given due
weightage in the analysis.74
m. In US – Differential Pricing Methodology,75 the Panel has permitted investigating authorities to use
zeroing methodology while comparing the weighted average normal value to transaction wise export
prices.76
H.2 Submissions of the other interested party
45. The other interested party has made the following submissions regarding the computation of the dumping
marg in:
a. The applicant had initially proposed a 6 -month period of investigation; however, the Authority had
adopted a POI of 12 months while initiating the investigation. However, the applicant is once again
requesting for the consideration of a six -month inves tigating period while computing the normal value.77
b. As per the Manual of Operating Practices of Trade Remedy Investigations, once the POI has been fixed, it
cannot be changed later on.78
c. The Authority, in its wisdom has fixed the POI as 12 months, and ther efore, there is no reason for
modifying the same.79
d. It has been the consistent practice of the Authority to analyse the POI as a whole for the purpose of
assessment of the dumping margin, injury margin and rate of duty.80
H.3 Examination of the Authority
46. Paragra ph 6(iv) of Annexure -I to the Anti -Dumping Rules reads as follows:
“Subject to the provisions governing comparison in this paragraph, the existence of margin dumping
during the investigation phase shall normally be established on the basis of comparison o f a weighted
average normal value and export prices on a transaction -to-transaction basis. A normal value
established on a weighted average basis may be compared to the prices of the individual export
transactions if it is found that the pattern of export prices which differs significantly among different
purchasers, regions or time periods and if an explanation is provided as to why such differences cannot
be taken into account appropriately by the use of weighted average -to-weighted average or transaction -
to-transaction comparison .”81
47. The above provision provides three methodologies for the determination of dumping and computation of
the dumping margin:
i By comparing individual normal values to individual export prices on a transaction -to-transaction basis
(hereinafter referred to as ‘T -T methodology’).
71 Issues and Decisions Memorandum for the Antidumping Du ty Investigation of Large Residential Washers from the Republic of Korea (A -580-
868), United States Department of Commerce.
72 Commission Regulation (EC) No. 355/2006 of 28 February 2006 imposing a provisional anti -dumping duty on imports of side -by-side
refrigerators originating in the Republic of Korea ; Council Regulation (EC) No 1050/2002 of 14 June 2002 imposing a definitive anti -dumping
duty and collective definitively the provisional duty imposed on imports of recordable compact disks originating in Ta iwan ; Council Regulation
(EC) No 2604/2000 of 27 November 2000 imposing a definitive anti -dumping duty and collecting definitively the provisional duty imposed on
imports of certain polyethylene terephthalate originating in India, Indonesia, Malaysia, the Republic of Korea, Taiwan and Thailand ; Council
Regulation (EC) No 2605/2000 of 27 November 2000 imposing definitive anti -dumping duties on imports of certain electronic weighing scales
(REWS) originating in the People’s Republic of China, the Republic of Korea and Taiwan; Council Implementing Regulation (EU) No 78/2013 of
17 January 2013 imposing a definitive anti -dumping duty and collecting definitely the provisional duty imposed on imports of certain tube and pipe
fittings of iron and steel originating i n Russia and Turkey.
73 Id., paras 28 to 31.
74 Written submissions of the applicant, para 34.
75 Panel Report, United States – Anti-Dumping Measures Applying Differential Pricing Methodology to Softwood Lumber from Canada ,
WT/DS534/R and Add.1, circulated to WTO Membe rs 9 April 2019, appealed 4 June 2019.
76 Id., para 35.
77 Rejoind er submissions of Hubei.
78 Id., page 2.
79 Id.
80 Written submissions of Hubei, page 7.
81 Annexure -I to the Anti -Dumping Rules is in pari materia with Article 2.4.2 of the WTO Anti -Dumping Agreement.
ii By comparing the weighted average normal value to the weighted average export price (hereinafter
referred to as ‘W -W methodology’); or
iii By comparing the weighted average normal value to prices of individual exp ort transactions (hereinafter
referred to as ‘W -T methodology’).
48. As per Paragraph 6(iv) of Annexure -I to the Rules, the W -T methodology can be used if it is found that
there is a pattern of export transactions which differs significantly among different pu rchasers, regions or
time periods, and such differences cannot be taken into account by the use of the W -W methodology or
the T -T methodology.
49. The applicant has stated that the inclusion of April to September 2021 (hereinafter referred to as “H1” to
indic ate the first half of the POI) for dumping and injury analysis is inappropriate since there was low
dumping margin in April to September 2021 as compared to October 2021 to March 2022 (hereinafter
referred to as “H2” to indicate the second half of the POI) .82 The applicant has therefore requested the
Authority to calculate the dumping margin by comparing weighted average normal value to individual
export transactions.83
50. The applicant has stated that there is a pattern of significant export price difference i n the first half of the
POI as compared to the second half. The applicant has submitted that the net adjusted CIF price (i.e. CIF
price of base year adjusted with the raw material price) was lower than the actual import price. According
to the applicant, t his implies that the Chinese producers had, in fact, increased their prices more than the
change in raw material cost and were practically not dumping in the domestic market. It was argued that in
H1, both the raw material cost and the import price increas ed, but the increase in import price was not in
line with the increase in raw material cost.84 The applicant has presented the following table to
demonstrate its claims:
S.No. Particulars CIF price
(Rs/MT) Raw Material
cost
(Rs./MT) Adjusted CIF
price (Rs./ MT) Difference
(Rs./MT)
1. 2018 -19 *** *** *** ***
2. 2019 -20 *** *** *** ***
3. 2020 -21 *** *** *** ***
4. POI – H1 *** *** *** ***
5. POI – H2 *** *** *** ***
6. POI (2021 -22) *** *** *** ***
51. The applicant’s argument on the basis of the above -mentioned tab le are not tenable because in calculation
of the adjusted CIF price, while the applicant is adding the raw material cost of the current year, it is
adding the other costs of the previous year to reach the adjusted CIF price. For example, the difference in
CIF price and raw material for 2019 -20 is *** (costs other than raw material). To calculated the adjusted
CIF price for 2020 -21, the applicant has added this “costs other than raw material” of 2019 -20 to the raw
material cost of 2020 -21 (5,31,801) to reac h the figure of ***. The assumption that “costs other than raw
material” shall remain unchanged for the next year has been improperly drawn.
52. The applicant has further submitted that in the second half of 2021 -22, the export price has declined when
the raw material price had in fact increased; therefore, the dumping margin during this period had
allegedly increased. The applicant claims that this shows that there is a pattern of export prices which
differs among different time periods. The applicant has sub mitted that from almost no aggressive pricing
in the first half of the POI, the exporters have resorted to aggressive dumping in the second half.85 The
applicant has presented the following table to demonstrate its claims:
82 Written submissions of the Applicant, para 17.
83 Writte n submissions of the applicant, para 21.
84 Written submissions of the applicant, para 23.
85 Written submissions of the applicant , para 24.
S.No. Particulars Raw Material cost
(Rs./MT) Import price CIF (Rs./MT)
1. POI – 1st Half *** ***
2. POI – 2nd Half *** ***
3. Change Rs. /MT *** ***
4. Change % *** ***
53. The applicant has further submitted that the above difference of pattern of export price between different
time periods c annot be remedied by adopting the W -W methodology since the export price has not moved
in tandem with the raw material price.86 The applicant claims that the dumping margin in the first half of
the POI was only 5%, which has increased to 24% in the second h alf of the POI.87 The applicant has
presented the following table to demonstrate its claims:
S.No. Particulars UOM POI-H1 POI-H2 2021 -22
1. Normal Value $/MT *** *** ***
2. Net Export Price $/MT *** *** ***
3. Dumping Margin $/MT *** *** ***
4. Dumping Margin % 5% 24% 20%
54. The applicant has relied on the decision of the Appellate Body in US – Anti-Dumping Methodologies
(China) to argue that the investigating authority has a discretion in deciding which methodology to adopt,
as long as the investigating authority identifies ‘a pattern of export prices which differs significantly
among different purchasers, regions or time’:
“5.22. … Accordingly, investigating authorities enjoy a margin of discretion regarding the methods or
tools they wish to use in establishing the existence of a pattern. However, irrespective of the method used,
investigating authorities are required to identify 'a pattern of export prices which differ significantly
among different purchasers, regions or time periods' within the meaning of the second sentence of Article
2.4.2 and consistently with their obligations under the Anti -Dumping Agreement. ”
55. The applicant has further argued that the Authority is not required to identify the reasons for such
differences in the export prices and is merely required to examine whether a pattern of export price exists.
The applicant has submitted that if it is found that there is a pattern of export price, the Authority has the
discretion to adopt any appropriate methodology for the determination of the dumpin g margin.88 The
applicant has relied on the WTO Appellate Body decision in US – Washing Machines and the USDOC’s
Issues and Decision Memorandum in the anti -dumping investigation concerning imports of large
residential washers from the Republic of Korea89 to support its contention. The observations of the
Appellate Body are as under:
“5.65. … The text of the second sentence of Article 2.4.2 also does not imply an examination of the
motivation for, or intent behind, the differences in prices. We thus see meri t in the United States' argument
that, under the second sentence of Article 2.4.2, the investigating authority is charged with finding
whether a pattern of export prices exists, not whether an exporter or producer has intentionally patterned
its export pri ces to 'target' and 'mask' dumping. ”
56. The applicants have also relied on decisions of the European Commission,90 wherein it has been observed
as under:
“(31) For all three exporting producers a clear pattern of export prices which significantly differed
between regions was established. It was indeed found that significant volumes at low prices were
86 Written submissions of the applicant, para 25.
87 Id., para 27.
88 Written submissions of the applicant, para 29.
89 The USDOC observed that:
Thus, while the Department may consider other factors in conducting a targeted dumping analysis, the statute does not
require the Department to consider why such differences exist. The only obligations imposed on the Department in its analysis
appear in section 777A(d)(1)(B) of the Act. Section 777A(d)(1)(B) of the Act requires the Department (1) to examine whether
there is a pattern of export prices for comparable merchandise that differ significantly among purchasers, regions, or time
periods and, if such a pattern exists, (2) to explain why such differences cannot be taken into account using the average -to-
average or transaction -to-transaction comparison methods. The Act does not require the Department to discern why such
pattern s arise.
90 Supra Note 72.
concentrated on the UK and French markets. These two markets were responsible for more than 50 % of
the imports of the product concerned in the Community during t he IP.
(32) The dumping found on these markets would have been inappropriately disguised by the use of a
comparison of a weighted average normal value with a weighted average of export prices to all Member
States of the European Union, as the prices at du mped levels found for all three exporting producers on
the UK and French markets were wholly or partly offset by higher and largely non -dumped prices on
other Community markets. Such methodology would not, therefore, reflect the full degree of dumping
being practised. It was accordingly found appropriate to reflect in the calculation of the dumping the
significant differences in the pattern of export prices among different regions.
(33) In this case, the transaction -to-transaction comparison was not found to be an appropriate
alternative comparison method because the process of selecting individual transactions in order to make
such a comparison was considered too impractical and arbitrary, with tens of thousands of exports and
domestic transactions. ”91
57. Lastly, the applicant has relied on the WTO Panel decision in US – Differential Pricing Methodology to
contend that the zeroing methodology may be adopted in the present investigation.92 In the above case, the
WTO Panel had observed as under:
“We recall that a n interpreter is not free to adopt a reading that would result in reducing whole clauses or
paragraphs of a treaty to redundancy or inutility. Therefore, contextual considerations also support our
view that the second sentence of Article 2.4.2 does not pro hibit zeroing under the W -T methodology.
Based on the above, we find that an investigating authority is permitted to use zeroing while applying the
W-T methodology to the pattern transactions .”
58. The other interested party has submitted that the applicant ha d initially proposed a 6 -month period of
investigation; the Authority had adopted a POI of 12 months while initiating the investigation. However,
the applicant is once again requesting for the consideration of a six month investigating period while
computi ng the normal value.93 It was contended that as per the Manual of Operating Practices of Trade
Remedy Investigations, once the POI has been fixed, it cannot be changed later on.94 The other interested
party has submitted that the Authority, in its wisdom has fixed the POI as 12 months, and therefore, there
is no reason for modifying the same.95 It was further submitted that the consistent practice of the Authority
has been to analyse the POI as a whole for the purpose of assessment of the dumping margin, injur y
margin and rate of duty.96
59. The Authority notes that in order to apply the W -T methodology, it must first be established that the
export prices differ significantly among different purchasers, regions or time periods, and such differences
cannot be taken i nto account appropriately by adopting the W -W methodology or the T -T methodology.
The applicant in the instant investigation has claimed that there is a pattern of export prices which differ
across different time periods since the export price in the 1st half of the POI (i.e., from April to September
2021) is much higher than the export price in the 2nd half of the POI (i.e., from October 2021 to March
2022). In order to examine this claim, the Authority has compared the export price in the first half of th e
POI with the export price in the second half of the POI based on the import data maintained by DGCI&S
and the exporter’s questionnaire response. The difference in export prices has been set out in the table
below:
Sl.
No. Particular UOM 1st Half of
POI 2nd Half of
POI
Exports from China PR#
1. Export price Rs./Kg 729 716
2. Volume of imports MT 147 338
# As per the data reported by DGCI&S
60. The applicant has claimed that in the second half of 2021 -22, the export price has declined when the raw
material pri ce had in fact increased and the dumping margin has intensified in this period. The applicant
91 Commission Regulation (EC) No. 355/2006 of 28 February 2006 imposing a provisional anti -dumping duty on imports of side -by-side
refrigerators originating in the Republic of Korea ; Council Regulation (EC) No 1050/2002 of 14 June 2002 imposing a definitive anti -dumping
duty and collective definitively the provisional duty imposed on imports of recordable compact disks originating in Taiwan
92 Written submissions of the applicant, para 35.
93 Rejoinder submissions of Hubei.
94 Rejoinde r submissions of Hubei, page 2.
95 Rejoinder submissions of Hubei.
96 Written submissions of Hubei, page 7.
claims that this shows a pattern of export price which differs sharply among different time periods. The
applicant has argued that from almost no aggressive prici ng in the first half of the POI, the exporters have
resorted to aggressive dumping in the second half of the POI.97 The applicant has claimed that the CIF
import price of Chinese exporters has not moved in tandem with the change in the cost of the raw
mater ials. The applicant has requested the Authority to take note of the disparity between the increase in
the raw material costs in the 2nd half of the POI and the changes in the CIF import price in the 2nd half of
the POI.
61. With respect to the differences in cost of raw materials relative to the differences in export price, Hubei
has claimed that the cost of raw materials has not increased in relation to what is claimed by the applicant.
The applicant has submitted that the Chinese producer does not operate in market economy conditions,
therefore, its costs and prices must not be accepted.98 The applicant states that it has procured its raw
materials from various unaffiliated sources, which reflect international prices. It has been claimed that in
case the cost of raw materials of the Chinese producers/exporters are below the international raw material
prices, it must be concluded that the prices of inputs of the responding exporters are distorted.99
62. The applicant has claimed that the Chinese exporter does not ope rate on market economy conditions, and
therefore its costs must not be accepted. It is noted that any distortions to the costs of inputs of the Chinese
exporters would be factored into the assessment of dumping since the Authority has computed the normal
value of the Chinese exporters based on Paragraph 7 of Annexure -I to the AD Rules. The Authority has
already made necessary adjustments to take into account the distortions to the input prices of the Chinese
exporters while computing the normal value. The a cceptance of the applicant’s argument would
effectively mean adoption of a constructed export price, which is permitted only under limited
circumstances i.e., when an association or compensatory arrangement between the importer and the
exporter or a third party has been established.100
63. As seen from the table above, the Authority notes that there is no pattern of significant differences in
export prices among different time periods. The difference between the export price of the second half of
the POI and the first half of the POI is only miniscule. Therefore, the Authority does not find a valid and
justifiable reason for computing the dumping margin based on the W -T methodology. The Authority has
therefore assessed the dumping margin based on the W -W methodol ogy. With respect to the applicant’s
argument regarding ‘zeroing’, the Authority notes that it has been consistently held by the WTO Panel and
Appellate Body that ‘zeroing’ is not permitted under the Anti -Dumping Agreement.101
64. Considering the normal value a nd export price for subject goods, the proposed dumping margins are as
follows:
S.No. Producer Normal
Value
(₹/MT) Net Export
Price
(₹/MT) Dumping
Margin
(₹/MT) Dumping
Margin
(%) Dumping
Margin
Range
1. Hubei Hongyuan
Pharmaceutical
Technology Co.,
Ltd *** *** *** *** 10-15%
2. Any other producer *** *** *** *** 10-15%
*****
Methodology of Injury Assessment and Examination of Causal Link
65. Rule 11 of the AD Rules, 1995 read with Annexure II to the AD Rules, 1995 provides that an injury
determination shall involve examination of factors that may indicate injury to the domestic industry, “…
taking into account all r elevant facts, including the volume of dumped imports, their effect on prices in the
domestic market for like articles and the consequent effect of such imports on domestic producers of such
97 Written submission of the applicant, para 24.
98 Rejoinder of the applicant, para 24.
99 Id., para 25.
100 See Section 9A(b) of the Customs Tariff Act, 1975; see also Article 2.3 of the Anti -Dumping Agreement.
101 Appellate Body Report, European Communities – Anti-Dumping Duties on Imports of Cotton -Type Bed Linen from India , WT/DS141/AB/R ,
adopted 12 March 2001; Appellate Body Report, United States – Continued Existence and Application of Zeroing Methodology , WT/DS350/AB/R ,
adopted 19 February 2009; Appellate Body Report, United States – Laws, Regu lations and Methodology for Calculating Dumping Margins
("Zeroing") , WT/D S294/AB/R , adopted 9 May 2006; Appellate Body Report, United States – Measures Relating to Zeroing and Sunset Reviews ,
WT/DS322/AB/R , adopted 23 January 2007; Panel Report, United States – Use of Zeroing in Anti -Dumping Measures Involving Products from
Korea , WT/DS402/R , adopted 24 February 2011.
articles… ”. Further, in considering the effect of the dumped impo rts on prices, it is considered necessary
to examine whether there has been a significant price undercutting by the dumped imports as compared
with the price of the like article in India, or whether the effect of such imports is otherwise to depress
prices to a significant degree or prevent price increases, which otherwise would have occurred, to a
significant degree.
66. The applicant has requested the Authority to conduct the injury analysis on a half yearly basis, by
separately examining the trends of injur y during the first half of the POI and the second half of the POI.
The applicant submitted that in several investigations, the Authority has conducted a quarterly/half yearly
analysis of the performance of the domestic industry.102
67. The Authority has examined the effect of dumped imports on the state of the domestic industry in the
paragraphs below. Wherever required, the Authority has separately examined the trends in the 1st half of
the POI and the 2nd half of the POI.
I VOLUME EFFECT OF DUM PED IMPORTS
I.1 Assessm ent of Demand
I.1.1 Submissions of the domestic industry
68. The domestic industry has made the following submission regarding the volume effects of the dumped
imports:
a. The applicant has requested the Authority to conduct the injury analysis on a half yearly basis. The
applicant has submitted that the Authority had conducted a half yearly analysis of the injury examination
in several previous investigations.
b. The volume of imports from the subject country declined during the first half of the POI and has increased
significantly in the second half of the POI.103
c. Imports in relation to the production and consumption has also shown the same pattern.104
d. The increase in imports was both in terms of absolute and relative production and consumption in India.105
e. The imports have inc reased 3.5 times during the second half of the POI as compared to the first half of the
POI.106
I.1.2 Submissions of the other interested party
69. The other interested party has made the following submissions regarding the volume effects of the
imports:
a. The reason f or the increase of imports from the subject country from 2018 to 2022 is not dumping, but
rather the growth of the Indian market demands following the development of the downstream industry.107
b. The imports from China PR, have at no point during the injury pe riod, put any sort of volume pressure on
the sales of the petitioner.108
c. With a decline in demand, the imports from the subject country have also declined, whereas, the sales of
the petitioner have slightly increased.109
102 Anti-Dumping Investigations concerning imports of Carbon Black used in rubber applications originating i n or exported from
Australia, China PR, Iran, Malaysia, Russia and Thailand; Anti -Dumping investigation concerning imports of “Glazed/Unglazed
Porcelain/ Vitrified tiles in polished or unpolished finish with less than 3% water absorption”, originating in o r exported from
China PR; Anti -dumping investigation concerning imports of Flat base Steel Wheels originating in/exported from China PR (some
parameters); Anti -dumping investigation concerning imports of D ( -) Para Hydroxy Phenyl Glycine Base (PHPG Base) o riginating
in or exported from the European Union; Anti -dumping investigation concerning imports of Styrene Butadiene Rubber SBR of
1500 series and 1700 series originating in or exported from European Union, Korea RP & Thailand; Anti -dumping investigation
involving imports of PVC Flex Films originating in or exported from China PR.
103 Application, para 60.
104 Written submissions of the applicant, para 40
105 Id.
106 Id.
107 Written submissions of Hubei, page 8
108 Id., page 9.
109 Id.
d. The share of imports from China PR in relation to the production and demand in India has continuously
declined during the period examined.110
I.1.3 Examination of the Authority
70. With regard to the volume of the dumped imports, the Authority is required to consider whether there has
been a significant increase in the volume of dumped imports, either in absolute terms or relative to
production or consumption in India. The transaction – wise import data of DGCI&S has been considered
for the purpose of injury assessment. The Authority has also examined the trends of imports in 6 months
of the post -POI period, (i.e., from April 2022 to September 2022) wherever necessary to assess whether
the trends during the POI are sustained. It is noted that the examination of post -POI is not usually
warranted in an origi nal investigation. However, the factual circumstances of the present investigation
demand the same. The applicant had in its original application requested the Authority to determine the
dumping and injury for the POI October 2021 – March 2022. However, th e reasons provided by the
applicant were not sufficient enough to accept the said period as the POI. The Authority had therefore
revised the POI as April 2021 – March 2022 through the initiation notification. Upon further analysis, it
was found that injury was non -existent for the period April 2021 – September 2021 (H1) which warranted
the investigation team to further consider whether the period October 2021 – March 2022 (H2) was a
period of aberration or a state of continued injury. The investigation team has therefore analysed the 6
month post -POI data for the period April 2022 to September 2022 to determine the same.
71. The import volumes of the subject goods from the subject countries are as follows:
S.
No
. Particulars UOM 2018 -
19 2019 -
20 2020 -
21 POI
(H1) POI
(H2) POI
(2021 -
22)
1. Domestic Sales of Applicant MT *** *** *** *** *** ***
Trend Indexed 100 111 103 - - 101
2. Sales of other producers MT 0 0 0 0 0 0
Trend Indexed 0 0 0 - - 0
3. Imports from subject country MT 839 662 397 147 338 485
Trend Indexed 100 79 47 - - 58
4. Imports from other countries MT 26 0 0 0 0 0
Trend Indexed 100 0 0 - - 0
5. Total imports MT 865 662 397 147 338 485
Trend Indexed 100 77 46 - - 56
6. Total demand/consumption (excluding
captive consumption of DI) MT *** *** *** *** *** ***
Trend Indexed 100 96 79 - - 82
7. Total demand/consumption (including
captive consumption of DI) MT *** *** *** *** *** ***
Trend Indexed 100 96 86 - - 91
72. The total demand/consumption of the product under consideration in India has declined from the base year
to the POI. However, the domestic sales of the applicant have increased marginally from the base year to
the POI. There are no other producers in India that are selling the product under consideration in the
domestic market. The imports from the subject country have declined from the base year to the POI, while
imports from other countries are nil from the year 2019 -20 to the POI. It is the applicant’s contention that
there has been an increase in imports in the second half of the POI, a s compared to the first half of the
POI. It is seen that the domestic sales of the applicant have marginally reduced in the second half of the
POI as compared to the first half, however, the overall sales of the applicant during the POI have slightly
incre ased as compared to the base year, and has marginally reduced as compared to the previous year.
110 Id., page 10.
Volume effects through the injury period
Volume effects (POI)
I.2 Import Volumes and Market Share
I.2.1 Submission of the domestic industry
73. The domestic industry has made the following submissions with respect to import volumes and market
share:
a. The market share of the applicant increased till April 2020 to September 2021, however declined
thereafter with an increase in imports.111
b. Market share of imports in the proposed period is the highest over the injury period.112
c. The volume of imports from China PR declined till September 2021 had has increased significantly
thereafter.113
111 Application, p ara 62.
112 Id.
113 Written submissions of the applicant, para 40.
d. The increase in imports was in both absolute terms and in relation to production and consumptio n in India.
The imports have increased 3.5 times in the period October 2021 to March 2022 as compared to April
2021 to September 2021.114
I.2.2 Submissions of the other interested party
74. The Hubei has made the following submissions with respect to import volumes an d market share:
a. Imports from China PR have, at no point in time during the period considered, put any sort of volume
pressure on the sales of the petitioner.115
b. The sales of the petitioner have slightly increased.116
c. Imports from China PR in relation to Indian production and total demand have also declined during the
period observed.117
I.2.3 Examination of the Authority
75. With regard to the volume of the dumped imports, the Authority is required to consider whether there has
been a significant increase in dumped imports , either in absolute terms or relative to production or
consumption in India. The import volumes of the subject goods from the subject countries and share of the
dumped imports during the injury investigation period are as follows:
S.
No Particulars UOM 2018-
19 2019 -
20 2020 -
21 POI
(H1) POI
(H2) POI
(2021 -
22)
Imports in Absolute Terms
1. Imports from subject country MT 839 662 397 147 338 485
Trend Indexed 100 79 47 n/a n/a 58
2. Imports from other countries MT 26 0 0 0 0 0
Trend Indexed 100 0 0 0 0 0
3. Total imports MT 865 662 397 147 338 485
Trend Indexed 100 77 46 n/a n/a 56
4. Total demand/consumption
(excluding captive consumption
of DI) MT *** *** *** *** *** ***
Trend Indexed 100 96 79 n/a n/a 82
5. Total demand/consumption
(including captive co nsumption
of DI) MT *** *** *** *** *** ***
Trend Indexed 100 96 86 - - 91
Subject imports in relation to
5. Indian Production % *** *** *** *** *** ***
Trend Indexed 100 61 39 25 59 42
6. Total Demand (excluding
captive consumption of DI) % *** *** *** *** *** ***
Trend Indexed 100 82 60 46 91 70
7. Total Demand (including captive
consumption of DI) % *** *** *** *** *** ***
Trend Indexed 100 82 55 40 86 64
8. Total Imports % 97% 100% 100% 100% 100% 100%
Trend Indexed 100 103 103 103 103 103
76. Imports from the subject country have declined during the period examined. Imports from China PR
during the POI have almost halved as compared to the base year. There was a miniscule volume of
imports from other countries during the base year; however, there have been no imports from other
countries thereafter. There is a decline in volume of imports during the POI in absolute terms. As far as
imports in relative terms are concerned, it is seen from the table above that imports in relation to Indian
productio n have declined during the POI as compared to the base year. There is a marginal increase in
imports from the subject country in relation to Indian production and Indian demand in the POI as
114 Id.
115 Written submissions of Hubei, page 9.
116 Id.
117 Id., page 10.
compared to 2020 -21; however, imports in relation to Indian prod uction and Indian demand during the
POI is below the base year levels.
77. The applicant has stated that during the second half of the POI, there was a significant increase in imports
from the subject country in absolute terms. While it is true that imports in absolute terms have increased
during the second half of the POI as compared to the first half of the POI, the share of imports in relation
to the Indian production and Indian demand during the second half of the POI is still lower than the base
year. This is because the sales of the domestic industry during the second half of the POI is significantly
higher than the import volumes. It is further seen that subject import volumes have increased by ***%
during the second half of the POI as compared to the fir st half of the POI (i.e. from *** MT to ***MT),
whereas, the domestic sales of the applicant have only declined by ***% (i.e. from ***MT to ***MT).
This indicates that the decline in volume of sales of the domestic industry has not been proportionate to
the increase in volume of imports during the second half of the POI. Despite the increase in volume of
imports during the second half of the POI, the domestic industry has managed to maintain substantial sales
volume. Further, it may be noted that there was a decline in total demand during the POI as compared to
the base year, which could have also contributed to the decline in sales volumes of the domestic industry.
78. The Authority has also examined the post -POI trends of imports in the table below. It is obs erved that
there has been a substantial increase in imports in the 6 -month period immediately following the POI (i.e.
April to September 2022). The import volumes during the 6 -month post -POI period are almost equal to
the import volume during the base year (12 months). However, the landed price of imports in the 6 -month
post-POI period is substantially higher than previous periods. In fact, the landed price of imports during
the April to September 2022 period is at the highest level and is ***% higher than the landed price in the
second half of the POI, and ***% higher than the landed price during the base year. The landed price
during this 6 -month post -POI period is also higher than the NIP calculated for the POI.
S.
N0. Particulars UOM Base
year
(2018 -
19) POI (H1) POI (H2) POI
(2021 -22) Post-POI
(April –
September
2022)
1. Imports from subject country MT 839 147 338 485 799
2. Imports from other countries MT 26 0 0 0 -
3. Total imports MT 865 147 338 485 799
4. Landed Price Rs./Kg 787 841 837 838 978
5. Selling Price of DI Rs./Kg. *** *** *** *** ***
79. The Authority has assessed the market shares of imports as well as the domestic industry (excluding
captive sales) in the table below:
S.
N0. Particulars UOM 2018 -19 2019 -20 2020 -21 POI (H1) POI (H2) POI
(2021-22)
1. Domestic Sales of Applicant % *** *** *** *** *** ***
Trend Indexed 100 115 131 141 109 124
2. Sales of other producers % *** *** *** *** *** ***
Trend Indexed 0 0 0 0 0 0
3. Imports from subject country % *** *** *** *** *** ***
Trend Indexed 100 83 61 46 93 85
4. Imports from other countries % *** *** *** *** *** ***
Trend Indexed 100 0 0 0 0 0
5. Total imports % *** *** *** *** *** ***
Trend Indexed 100 79 58 45 88 85
80. The market share of domestic industry has improved during the POI as com pared to the base year, while
the market share of the imports from the subject country has declined during this period. During the 2nd
half of the POI, the market share of the domestic industry is ***%, while the market share of the imports
from the subjec t country is ***%. It is seen that during the second half of the POI, the market share of the
domestic industry has declined in comparison to the first half of the POI as well as the previous year. On
the other hand, the market share of the imports from th e subject country has increased during the second
half of the POI.
81. The Authority has also compared the volume trends observed during the present investigation with the
historic trends of imports of Metronidazole from China PR in the table given under:
S.
N0. Particulars UOM Jan-
Dec
2010* Jan-
June
2011* 201
8-
19 2019 -
20 2020 -
21 POI
(2021 -
22)
1. Sales of the domestic industry MT 268 175 *** *** *** ***
2. Sales of other producers MT 466 466 0 0 0 0
Trend Indexed 100 100 0 0 0 0
3. Total sales of domestic produc ers MT 734 641 *** *** *** ***
4. Imports from subject country MT 1,133 1,049 839 662 397 485
Trend Indexed 100 93 74 58 35 58
5. Imports from other countries MT 0 92 26 0 0 0
Trend Indexed - 100 28 0 0 0
6. Total imports MT 1,133 1,141 865 662 397 485
Trend Indexed 100 101 76 58 35 58
7. Demand/Consumption (excluding
captive consumption of DI) MT 1,867 1,782 *** *** *** ***
Market share in Demand (excluding captive sales of the DI)
8. Domestic Industry % 14.38% 9.82% *** *** *** ***
9. Other producers % 24.94% 26.14% 0% 0% 0% 0%
10. Imports from subject country % 60.68% 58.88% *** *** *** ***
11. Imports from other countries % 0% 5.16% *** *** *** ***
* As per the final findings of the 2nd SSR of the previous investigation on Metronidazole118
82. The period of inv estigation of the 2nd SSR of the previous investigation on Metronidazole was January to
December 2010. The Authority had also analyzed the post -POI data of January to July 2011 therein. As
can be observed from the table above, the demand for Metronidazole in the year 2010 and 2011 is similar
to the demand for Metronidazole during the POI. Whereas in the year 2010 and 2011, the exports from
China PR occupied a substantial portion of the market share, during the injury period and the POI for the
present inves tigation, the domestic industry has captured a significant portion of the domestic demand.
*****
J PRICE EFFECT
J.1 Submission of the Parties
J.1.1 Submissions of the domestic industry
83. The domestic industry has made the following submissions with respect to price effe cts:
a. The landed price of the subject imports during the POI is below the selling price of the domestic
industry.119
118 Final Findings No. 15/9/2003 -DGAD dated 29th June 2012, “Sunset Review of anti -dumping duty imposed concerning imports of
‘Metronidazole’ originating in or exported from China PR”, para 20, https://dgtr.gov.in/sites/default/files/adfin_SSR2_metronidazole_chinaPR.pdf
119 Application, par a 75.
b. The price undercutting was negative during the entire period examined except during the POI.120
c. Price undercutting was negative even during Apri l to September 2021.121
d. Price underselling during the POI is positive.122
e. Prior to the POI, the landed price of imports was above the cost of sales and the selling price of the
applicant, and therefore, the applicant was able to fetch reasonable prices.123
f. Durin g the POI, the cost of sales increased globally, but the landed price of imports declined even below
costs. The domestic industry has not been able to increase its selling price in the same proportion as
increase in cost.124
g. Prior to the October 2021 – March 2022 period, the landed price of imports was above the cost of sales
and the selling price of the domestic industry. However, in October 2021 – March 2022, the cost of sales
increased sharply, but the landed price of imports has declined below the cost.125
h. Even compared to the April 2021 to September 2021 period, the landed price has declined, whereas the
cost of sales has increased.126
J.1.2 Submissions of the other interested party
84. The other interested party has made the following submissions with respect to the p rice: effects:
a. The cost of sales of the domestic industry has increased substantially, by 23% during the POI as compared
to the base year.127
b. The landed price of imports from China has remained almost the same during the POI as compared to the
base year as t here is not much fluctuations in the price of raw materials used by the producer/exporter.128
c. Price undercutting is negative throughout the injury period and is slightly positive during the POI.129
d. The domestic industry is in a position to increase the price t o sell at a higher price in the Indian market.130
J.1.3 Examination of the Authority
85. The impact on the prices of the domestic industry on account of the dumped imports from the subject
country has been examined with reference to the price undercutting, price suppr ession and price
depression, if any. For the purpose of this analysis, the cost of production and net sales realization (NSR)
of the domestic industry have been compared with the landed price of imports of the subject goods from
the subject country.
J.2 Price undercutting effect
86. With regard to the effect of the dumped imports on prices, it is required to be analysed whether there has
been a significant price undercutting by the dumped imports as compared to the price of the like products
in India, or whether t he effect of such imports is otherwise to depress the prices or prevent price increases,
which otherwise would have occurred in the normal course.
S.
No. Particulars UOM 2018 -
19 2019 -
20 2020 -
21 POI
(H1) POI
(H2) POI
(2021 -
22)
1. Import volume MT 839 662 397 147 338 485
2. Landed price ₹/MT 7,87,08
2 7,46,70
0 8,30,52
4 8,40,696 8,36,797 8,37,977
120 Id., para 75.
121 Written submissions of the applicant, para 42.
122 Application, para 76.
123 Id., para 79.
124 Id., para 79.
125 Written submissions of the applicant, para 44.
126 Id., para 45.
127 Written submissions of Hubei, page 10.
128 Id., page 10.
129 Id., page 10 -11.
130 Id., page 11.
3. Net Sales Realisation (NSR) ₹/MT *** *** *** *** *** ***
Trend Indexed 100 98 108 109 115 112
4. Price undercutting ₹/MT *** *** *** *** *** ***
Trend Indexed -100 -22 -34 -57 97 19
5. Price undercutting % *** *** *** *** *** ***
Range Indexed (0-5) (0-5) (0-5) (0-5) 0-5 0-5
6. Raw material cost of
domestic industry ₹/MT *** *** *** *** *** ***
Trend Indexed 100 96 99 115 138 126
87. The price undercutting throughout the examined period, except the POI is negative. In the POI, the price
undercutting is ***%. During the second half of the POI, the price undercutting was ***%. The landed
price of imports has been below the net sales realization of the domestic industry only during the second
half o f the POI. Even in the first half of the POI, the landed price of imports was above the net sales
realization. It is noticed that from the base year to 2020 -21, even though the net sales realization of the
domestic industry was lower than the landed price, the profitability parameters (as mentioned in table to
paragraph 110) of the domestic industry was positive and significant. The domestic industry had been
profitable during this period even though it was selling the PUC at a lower price than the subject imports.
88. The applicant has contended that during the POI, particularly, in the second half of the POI, there has been
an increase in price of raw materials, whereas the import price of the subject goods has not moved in
tandem.131 The applicant submitted th at with the increase in prices of the raw materials, the export price
and landed value should have increased, however, this has not been the case.132 Hubei, on the other hand
submitted that there has been no significant fluctuation in its price of raw materi als.133 However, Hubei
has not provided any evidence to substantiate its claims. The applicant submitted that since Chinese
producers operate in non -market economy conditions, the prices of raw materials in China is not are not
set by market forces.134 The app licant submitted that the Chinese raw material prices are substantially
lower than both Indian as well as international raw material prices.135 The applicant has submitted that it
has procured raw materials from several sources, which reflect international p rices.136 The applicant has
submitted the following information regarding the fluctuation of its raw material prices:137
Source Domestic Imported
Period 2020 -21 2021 -22 Increase 2020 -21 2021 -22 Increase
2 Methyl 5 -Nitro
Imidazole *** *** *** *** *** ***
Formic Acid
85% *** *** *** *** *** ***
Ethylene Oxide *** *** *** *** *** ***
Anhydrous
Ammonia Gas *** *** *** *** *** ***
Unit: ₹/MT
89. The applicant’s claim that the prices of raw materials in India have moved in tandem with international
raw material pri ces cannot be accepted. The fluctuation in prices of raw materials from India are not
similar to the international prices of raw materials. Further, the prices of raw materials in India have
grown at a substantially higher rate than the international price s in raw materials. The Indian raw material
prices have increased by about 27% during the POI as compared to the previous year, whereas the
international prices of raw materials have increased only by about ***% during the POI as compared to
the previous y ear. The increase in international raw materials prices is seen only with respect to 2 Methyl
5-Nitro Imidazole and not with other raw materials.
131 Written submissions of the applicant, paras 22 -24.
132 Id.
133 Written submissions of Hubei, page 10.
134 Rejoinder of the applicant, para 25.
135 Id.
136 Rejoinder of the applicant, para 25.
137 Id.
90. The Authority notes that the increase in cost of domestic raw materials during the POI has contributed to
the applicant’s increase in net sales realization. This has led to a situation wherein the price undercutting
during the POI is positive. It is further noticed that during the first half of the POI, the price undercutting
is negative, whereas only in the seco nd half of the POI, the price undercutting is positive.
J.3 Price Suppression and Depression
91. In order to assess as to whether imports from the subject countries were suppressing/depressing the prices
of the domestic industry and whether the effect of such impo rts is to suppress prices to a significant degree
or prevent price increases which otherwise would have occurred to a significant degree, the Authority has
compared the cost of production and the net selling price of the domestic industry over the injury p eriod
along with the landed price of imports over the injury period, and shown in the table below:
S.
No. Particulars UOM 2018 -
19 2019 -
20 2020 -
21 POI
(H1) POI
(H2) POI
(2021 -
22)
1. Cost of sales per unit ₹/MT *** *** *** *** *** ***
Trend Indexed 100 106 101 115 139 126
2. Selling price per unit ₹/MT *** *** *** *** *** ***
Trend Indexed 100 98 108 109 115 112
3. Landed Price ₹/MT *** *** *** *** *** ***
4. Raw material cost of
domestic industry ₹/MT *** *** *** *** *** ***
Trend Indexed 100 96 99 115 138 126
92. It is seen that the cost of sales has increased from the base year to the POI. During the second half of the POI,
the cost of sales has increased significantly. The selling price of the product under consideration has also
increased. While the cost o f sales has increased by ***% from the base year to the POI, the selling price has
increased by ***%. It is further noted that the cost of raw materials of the domestic industry has also
increased by ***% from the base year to the POI. From the first half of the POI to the second half, the price
of raw materials increased by ***%, and the applicant’s cost of sales increased by ***%. The increase in cost
of sales during this period appears to be directly attributable to the increase in raw material costs.
93. The landed price has also increased from the base year to the POI. The Authority notes that during the 2nd
half of the POI, the landed price of the imports has been lower than the selling price of the applicants.
During the second half of the POI, the app licant’s selling price was also lower than its cost of sales, thereby
indicating that it has incurred losses during the second half of the POI. As discussed above, the increase in
cost of sales, could be attributable to the increase in raw material prices. In fact, from 2018 -19 till the first
half of the POI, the selling price of the domestic industry was below the landed price, and yet the profitability
and market share of the applicant were substantial. The Authority notes that the apparent price
suppress ive/depressive effects of the imports observed during the second half of the POI are a result of an
increase in raw material prices, which occurred during this period.
K ECONOMIC PARAMETERS PERTAINING TO THE DO MESTIC INDUSTRY
K.1 Production, Capacity, Capacity Utilisation and Sales
K.1.1 Submission of the domestic industry
94. The domestic industry made the following submissions with respect to the production, capacity, capacity
utilization and sales:
a. The domestic sales of the applicant have declined during the POI.138
b. The production and capacity utilization of the applicant has increased during the POI due to an increase in
export sales of the applicant.139
c. The primary market for the applicant is the domestic market; however, due to the increase in imports from
138 Application, para 64.
139 Id.
the subject co untry, the applicant is forced to export.140
d. The export sales volumes of the applicant have increased, whereas domestic sales have increased till the
year 2019 -20 and have declined thereafter.141
K.1.2 Submissions of the other interested party
95. The other interested party made the following submissions with respect to production, capacity, capacity
utilization and sales of the domestic industry:
a. The capacity of the petitioner has remained stable. The production and sales of the petitioner have
increased sharply.142
K.1.3 Exam ination of the Authority
96. The following table shows the capacity, production and sales parameters of the applicant:
S.
No
. Particulars UOM 2018 -
19 2019 -
20 2020 -
21 2021 -22 H1 2021 -22 H2 POI
(2021 -
22)
1. Installed capacity MT *** *** *** *** *** ***
Trend Indexed 100 100 100 100 100 100
2. Production - PUC MT *** *** *** *** *** ***
Trend Indexed 100 119 109 126 122 124
3. Capacity Utilisation % *** *** *** *** *** ***
Trend Indexed 100 119 109 126 122 124
Sales Volume
4. Domestic MT *** *** *** *** *** ***
Trend Indexed 100 111 103 53 48 101
5. Exports MT *** *** *** *** *** ***
Trend Indexed 100 99 133 78 93 171
6. Captive MT *** *** *** *** *** ***
Trend Indexed 100 96 125 79 59 137
7. Total sales of the domestic
industry MT *** *** *** *** *** ***
Trend Indexed 100 106 114 64 61 124
8. Subject Imports MT 865 662 397 147 338 485
97. It is seen that:
i The installed capacity of the applicant has remained stable throughout the injury period and the POI.
ii The production and capacity utilization has increased fr om the base year to the POI. The production and
capacity utilization has increased from the base year to 2019 -20, and has declined slightly in the year
2020 -21, and has once again picked up during the POI. The capacity utilization during the second half of
the POI (when the raw material prices of the domestic industry had increased substantially) stands at
***%, which is significant.
iii The domestic sales has slightly increased during the POI as compared to the base year despite the alleged
price undercutting. The domestic sales of the applicant was at the highest level during the year 2019 -20
and has declined thereafter. The export sales and captive consumption of raw materials has continuously
increased from the base year to the POI. The applicant has contend ed that due to the increase in volume of
imports from the subject country, they have begun shifting their focus away from the domestic markets to
the export markets.
140 Id.
141 Written submissions of the applicant, para 65.
142 Written submissions of Hubei, page 12.
iv The overall sales of the applicant (i.e. domestic sales + export sales + captive sales) h ave steadily
increased throughout the examined period, yet the domestic sales of the applicant has not shown a
substantial increase during the examined period.
98. The contention of the applicant that due to an increase in volume of imports from the subject c ountry, they
have been forced to shift their focus to the export markets is not tenable. If this had been the case, the
applicant’s export sales would have increased with an increase in volume of subject import and vice -versa.
However, this has not been th e case. The Authority notes that during the years 2018 -19 and 2019 -20, the
import volumes from the subject country was far higher than the import volumes during the POI; yet, the
export sales of the applicant during the years 2018 -19 to 2019 -20 was lower t han its export sales during
the POI. The Authority further notes that during the year 2020 -21, although there was extremely low
volume of imports from the subject country (lowest among all years examined), the applicant has exported
significant quantities of the PUC. It is to be further noted that the increase in export sales cannot be
considered a counter reaction to the alleged dumping given the fact that the export market has always been
more price attractive for the applicant. The same can be concluded from the following table:
Particulars UOM 2
018-
19 2019 -
20 2020 -
21 2021 -
22 H1 2021 -
22 H2 2021 -
Sales Volume
Domestic MT *
** *** *** *** *** ***
Exports MT *
** *** *** *** *** ***
Captive MT *
** *** *** *** *** ***
Sales Value
Domestic ₹ Lacs *
** *** *** *** *** ***
Exports ₹ Lacs *
** *** *** *** *** ***
99. Further, from the year 2019 -20 to the year 2020 -21, the import volumes from the subject countries
declined by ***%, whereas the export sales of the applicant increased by ***% during the same perio d. It
is true that during the POI, the import volumes from the subject country has increased as compared to the
previous year; however, the Authority notes that this appears to not have a direct correlation to the
applicant’s tendency to export the PUC as has been examined above.
100. It is further noted that from 2018 -19 to 2020 -21, when the applicant was not suffering injury either in
terms of its profitability or in terms of its market share, the applicant’s domestic sales has remained more
or less constant and has merely fluctuated between *** MT to ***MT. The applicant has not been able to
improve its domestic sales volumes during this period when there was apparently no injury from the
subject imports. Yet, the applicant has increased its export sales volu mes. This period (2018 -19 to 2020 -
21) was a period which saw a gradual decline in imports of the subject goods. This shows that the
applicant’s tendency to sell in the export market is not influenced by the increase in imports from the
subject countries. T he applicant has been continuously increasing its export sales irrespective of the
volume of imports from the subject country. The applicant, for certain reasons which are unrelated to
imports from the subject country, has not been able to increase its dom estic sales beyond a certain level
despite a relatively high capacity utilization. In fact, during the POI, the overall sales of the applicant
(domestic, export and captive) were even higher than its production capacity.
K.2 Market Share
K.2.1 Submission of the dom estic industry
101. The domestic industry has made the following submissions with respect to the market shares:
a. The market share of the applicant increased till April 2020 to September 2021 as imports from the subject
country declined. With an increase in impor ts, the market share of the applicant declined.143
143 Application, para 62.
K.2.2 Submissions of the other interested party
102. The other interested party made the following submissions with respect to market share:
a. Sales of the petitioner have increased during the POI as compared to the base year. The export sales and
captive consumption sales have also increased sharply.144
K.2.3 Examination of the Authority
103. The Authority has assessed the market shares of imports as well as the domestic industry in the table
below:
S.
No. Particulars UOM 2018 -19 2019-20 2020 -21 POI (H1) POI (H2) POI
(2021 -22)
1. Domestic Sales of Applicant % *** *** *** *** *** ***
Trend Indexed 100 115 131 141 109 124
2. Sales of other producers % *** *** *** *** *** ***
Trend Indexed 0 0 0 0 0 0
3. Imports from subject country % *** *** *** *** *** ***
Trend Indexed 100 82 60 46 91 70
4. Imports from other countries % *** *** *** *** *** ***
Trend Indexed 100 0 0 0 0 0
5. Total imports % *** *** *** *** *** ***
Trend Indexed 100 79 58 45 88 68
104. The market share of domestic indu stry has improved during the POI as compared to the base year, while
the market share of the imports from the subject country has declined during this period. During the 2nd
half of the POI, the market share of the domestic industry is ***%, while the mark et share of the imports
from the subject country is ***%. It is seen that during the second half of the POI, the market share of the
domestic industry has declined in comparison to the first half of the POI as well as the previous year. On
the other hand, the market share of the imports from the subject country has increased during the second
half of the POI.
105. The Authority has also compared the volume trends observed during the present investigation with the
trends which were noticed during the 2nd Sunset R eview of the previous investigation on Metronidazole
from China PR in the table given under:
S.
No. Particulars UOM Jan-
Dec
2010* Jan-
June
2011* 2018 -
19 2019 -
20 2020 -
21 POI
(2021 -
22)
1. Sales of the domestic industry MT 268 175 *** *** *** ***
2. Sales of ot her producers MT 466 466 0 0 0
Trend Indexed 100 100 0 0 0 0
3. Total sales of domestic producers MT 734 641 *** *** *** ***
4. Imports from subject country MT 1,133 1,049 839 662 397 485
Trend Indexed 100 93 74 58 35
5. Imports from other countries MT 0 92 26 0 0 0
Trend Indexed - 100 28 0 0 0
6. Total imports MT 1,133 1,141 *** *** *** ***
Trend Indexed 100 101 76 58 35
7. Demand/Consumption (excluding
captive sales of the DI) MT 1,867 1,782 *** *** *** ***
Market share in Demand (excluding captive sales of the DI)
8. Domestic Industry % 14.38% 9.82% *** *** *** ***
9. Other producers % 24.94% 26.14% *** *** *** ***
144 Written Submissions of Hubei, page 12.
10. Imports from subject country % 60.68% 58.88% *** *** *** ***
11. Imports from other countries % 0% 5.16% *** *** *** ***
* As per the f inal findings of the 2nd SSR of the previous investigation on Metronidazole145
106. The period of investigation of the 2nd SSR of the previous investigation on Metronidazole was January to
December 2010. The Authority had also analyzed the post -POI data of Januar y to July 2011 therein. As
can be observed from the table above, the demand for Metronidazole in the year 2010 and 2011 is similar
to the demand for Metronidazole during the POI. Whereas in the year 2010 and 2011, the exports from
China PR occupied a subst antial portion of the market share, during the injury period and the POI for the
present investigation, the domestic industry has captured a significant portion of the domestic demand.
K.3 Profitability, Return on Capital Employed and Cash Profits.
K.3.1 Submission of the domestic industry
107. The domestic industry made the following submissions with respect to profitability, return on capital
employed and cash profits
a. Profitability of the applicant has declined significantly in the POI. The applicant is earning the lowe st
profits during the POI.146
b. Cash profits and ROCE have shown the same trends as profitability.147
c. Cash profits and profit before tax are historically the lowest levels during the POI.148
d. The applicant placed reliance on the decision of the Ld. CESTAT in the c ase of Forum of Acrylic Fibre
Manufacturers v. Designated Authoritrity , to argue that price determination in a market economy is an
outcome of market forces of supply and demand. Therefore, the decline in profitability of the domestic
industry should not b e seen as insignificant.149
K.3.2 Submissions of the other interested party
108. The other interested party has made the following submissions with respect to profitability, cash profits
and return on capital employed:
a. The profitability of the domestic industry has de clined due to a sharp and sudden increase in cost of sales
of the applicant, whereas the selling price of the applicant has not increased in tandem.150
b. The increase in cost of sales is due to an increase in raw material cost of the applicant. The cost of raw
materials may not be as substantial as claimed by the applicant.151
K.3.3 Examination of the Authority
109. The following table lays down the figures pertaining to the financial parameters of the domestic industry:
S.
No. Particulars UOM 2018 -19 2019 -20 2020 -21 POI (H 1) POI (H2) POI
(2021 -22)
1. Cost of sales per unit ₹/MT *** *** *** *** *** ***
Trend Indexed 100 106 101 115 139 126
2. Selling price per unit ₹/MT *** *** *** *** *** ***
Trend Indexed 100 98 108 109 115 112
3. Profit/Loss ₹/MT *** *** *** *** *** ***
Trend Indexed 100 47 147 77 (12) 35
4. Profit/Loss (PBT) ₹ Lakhs *** *** *** *** *** ***
Trend Indexed 100 63 152 - - 35
5. PBIT ₹/MT *** *** *** *** *** ***
Trend Indexed 100 59 140 74 (8) 35
6. PBIT ₹ Lakhs *** *** *** *** *** ***
Trend Indexed 100 66 145 79 (8) 36
145 Final Findings No. 15/9/2003 -DGAD dated 29th June 2012, “Sunset Review of anti -dumping duty imposed concerning imports of
‘Metronidazole’ originating in or exported from China PR”, para 20, https://dgtr.gov.in/sites/default/files/adfin_SSR2_metronidazole_chinaPR. pdf
146 Application, para 68.
147 Application, para 68.
148 Written submissions of the applicant, para 71.
149 Rejoinder of the applicant, paras 30& 31.
150 Written submissions of Hubei, page 13.
151 Id.
7. Cash profits ₹/MT *** *** *** *** *** ***
Trend Indexed 100 61 144 79 (5) 39
8. Cash profits ₹ Lakhs *** *** *** *** *** ***
Trend Indexed 100 68 149 84 (5) 39
9. ROCE % *** *** *** *** *** ***
Trend Indexed 100 64 144 75 (8) 35
110. The applicant has relied on the decision of the Ld. CE STAT in the case of Forum of Acrylic Fibre
Manufacturers v. Designated Authority , to argue that profits are relevant and important to business enterprises
and the decline in profits of the domestic industry should not be regarded as insignificant or incons equential.152
111. It is seen that:
i The cost of sales and selling price have increased from the base year to the POI. The cost of sales has
increased substantially during the POI as compared to the previous year. The increase in cost of sales is
most significant during the second half of the POI.
ii The profits of the applicant have declined in the year 2019 -20, and have increased in the year 2020 -21,
and declined during the POI to the lowest levels. The same trend is observed for PBIT, cash profits and
ROCE. During the second half of the POI, the applicant has incurred losses. However, during the first half
of the POI, the applicant is sufficiently profitable. Although the applicant’s profitability has declined in
the POI in relation to previous years, it has been ov erall profitable.
iii It is seen that during the year 2020 -21, while the volume of imports has been at the lowest levels of the
examined period, the applicant had made substantial profits. This is also reflected in the PBIT, cash profits
and ROCE.
112. The perform ance of the applicant must also be examined in the light of the substantial increase in raw
material cost during the POI (particularly the second half of the POI). It is seen that while in the first half
of the POI, the applicant is making sufficient profi ts, with a stable and satisfactory ROCE, during the
second half of the POI, when the raw material costs increased, the profitability of the applicant has also
declined.
113. During the second half of the POI, the applicant’s selling price was also lower than i ts cost of sales,
thereby indicating that it has incurred losses during the second half of the POI. The increase in cost of
sales, could be attributable to the increase in raw material prices. While the cost of sales has moved in
tandem with the price of r aw materials, the selling price of the domestic industry has moved in tandem
with the landed value.
S.
No. Particulars UOM 2018 -
19 2019 -
20 2020 -
21 POI
(H1) POI
(H2) POI
(2021 -
22)
1. Cost of sales per unit ₹/MT *** *** *** *** *** ***
Trend Indexed 100 106 101 115 139 126
2. Selling price per unit
(Domestic) ₹/MT *** *** *** *** *** ***
Trend Indexed 100 98 108 109 115 112
3. Landed Price ₹/MT 7,87,08
2 7,46,70
0 8,30,52
4 8,40,696 8,36,797 8,37,977
4. Raw material cost of
domestic industry ₹/MT *** *** *** *** *** ***
Trend Indexed 100 96 99 115 138 126
152 Rejoinder of the applicant, paras 30 & 31.
114. Due to the significant increase in raw material costs during the second half of the POI, the cost of sales of
the domestic industry also increased. However, during the second half of the POI, the landed pr ice has
remained stable and therefore the domestic industry was unable to increase its selling price. It is the
increase in raw material price and not the decline in landed price which has affected the profitability of the
domestic industry. The domestic i ndustry has contended that the landed price of the import from the
subject country has not moved in tandem with the increase in raw material prices, and therefore, the
domestic industry has not been able to adjust its selling price to the increase in raw m aterial prices. The
domestic industry has submitted that the pricing behaviour of exporters – whereby import prices have
been unaffected by increase in raw material prices – is causing injury to the domestic industry.
115. The applicant has claimed that the CIF import price of Chinese exporters has not moved in tandem with
the change in the cost of the raw materials. The applicant has requested the Authority to take note of the
disparity between the changes in the raw material costs and the changes in the CIF import price. With
respect to the differences cost of raw materials relative to the differences in export price, Hubei has
claimed that the cost of raw materials has not increased in relation to what is claimed by the applicant. The
applicant has submitte d that the Chinese producer does not operate in market economy conditions,
therefore, its costs and prices must not be accepted.153 The applicant states that it has procured its raw
materials from various unaffiliated sources, which reflect international pri ces. It has been claimed that in
case the cost of raw materials of the Chinese producers/exporters are below the international raw material
prices, it must be concluded that the prices of inputs of the responding exporters are distorted.154
116. The Authority not es that the domestic industry has sourced its raw materials from both domestic and
international suppliers. The applicant has provided data of the month -wise prices of the major raw
material of metronidazole 2 Methyl 5 -Nitro Imidazole (“2 -MNI”), which it h as procured from both
domestic as well as international sources. The month -wise price of 2 -MNI procured by the applicant
during the POI is as under:
Month Unit price of 2 -MNI
(Rs. / Kg)
Domestic Imported
Apr-21 *** ***
May-21 *** ***
Jun-21 *** ***
153 Rejoinder of the applicant, para 24.
154 Id., para 25.
Jul-21 *** ***
Aug-21 *** ***
Sep-21 *** ***
Oct-21 *** ***
Nov-21 *** ***
Dec-21 *** ***
Jan-22 *** ***
Feb-22 *** ***
Mar-22 *** ***
117. As seen from the table and graph above, the prices of domestically sourced 2 -MNI has consistently
increased. Du ring the second half of the POI, the price of domestically sourced 2 -MNI is higher than the
international price of 2 -MNI. Pertinently, vide email dated 29th July 2023, the domestic industry has itself
conceded that the raw material price (particularly the price of 2 -MNI) has increased more sharply in the
Indian market as compared to the international market.155 The Authority further notes that the increase in
raw material cost without the corresponding increase in landed price of the subject goods is merely
restricted to H2 of the POI. As noted in paragraph 143 below, during the 6 month post -POI period, the raw
material price has increased by Rs. *** per MT ( ***% increase) as compared to the preceding 6 months,
whereas the landed value has increased by Rs. *** per MT ( ***% increase), and the selling price has
increased by Rs. *** per MT ( ***% increase). The abnormal increase in raw material cost relative to the
landed value was noticed only during H2 of the POI, which is an aberration. The Authority notes that any
determination of injury cannot solely be based on the H2 of the POI – which appears to be period of
aberration, more so in view of the H1 of the POI and the post -POI period.
K.4 Inventories
K.4.1 Submissions of the domestic industry
118. The applicant has made the f ollowing submissions with respect to its inventories:
a. The inventories of the applicant have declined over the injury period and during the POI.156
b. Closing inventories increased in 2019 -20 when COVID lockdown was imposed, resultantly, the average
inventories increased during this period.157
155 Email of the applicant dated 29th July 2023.
156 Application, para 70.
157 Written submissions of applicant, para 69.
c. The closing inventories declined in the year 2020 -21 since the production of the applicant declined.158
d. The inventories of the applicant have declined as it has undertaken export sales.159
K.4.2 Submissions of the other interested par ty
119. The other interested party has made no specific submissions with respect to inventories
K.4.3 Examination of the Authority
120. The following table shows the inventory figures of the domestic industry:
Particulars UOM 2018 -19 201
-
0 202
-
1 POI
(
H
) PO
I
(
H
) POI
(2021 -
)
Opening
Inventory MT *** *** *** *** *** ***
Trend Indexed 100 35 387 168 112 168
Closing
Inventory MT *** *** *** *** *** ***
Trend Indexed 100 1,10
1 479 319 201 201
Average
Inventory MT *** *** *** *** *** ***
Trend Indexed 100 312 411 208 135 177
121. It is seen that there has been an increase in inventories from 2018 -19 to 2020 -21. Thereafter, the level of
inventories has declined. During the POI, the average inventories have reduced, however, the level of
inventories during the POI is stil l higher than the base year. There was an accumulation of stock in the
year 2020 -21. However, it is seen that a substantial amount of stock was cleared during the POI. This is
despite the high production and capacity utilization of the applicant. Further, as noted above, the total
sales of the domestic industry during the POI (domestic sales + export sales + captive sales) is ***MT.
The domestic industry appears to not be facing much difficulty in making sales and clearing its existing
stock through differe nt sales channels (domestic, export or captive).
K.5 Employment, wages and productivity
K.5.1 Submission of the domestic industry
122. The domestic industry has made the following submissions with respect to employment, wages and
productivity:
a. Productivity and salary & wages has increased over the injury period. Number of employees have
declined.160
b. Employment and wages are not dependent on the performance of the product under consideration and the
applicant is not claiming injury in these parameters.161
K.5.2 Submissions of the other interested party
123. The other interested party has made the following submissions with respect to employment, wages and
productivity:
a. The number of employees increased during the POI as compared to the base year.162
158 Id.
159 Id.
160 Application, para 66.
161 Id.
162 Written submissions of Hubei, page 13
b. Wages slightly declined during the POI .163
c. Employment and wages are not dependent on the performance of the product under consideration and the
applicant is not claiming injury in these parameters. Thus, there is no injury to the domestic industry from
the imports from China PR.164
d. Productivity pe r day and productivity per employee has increased sharply from the base year to the POI.165
K.5.3 Examination of the Authority
124. The following table shows the figures with respect to employment, wages and productivity:
Particulars UOM 2018 -19 2019 -20 2020 -21 POI (H1 ) POI (H2) POI
(2021 -22)
Salary & Wages ₹ Lacs *** *** *** *** *** ***
Trend Indexed 100 109 127 142 140 141
No. of Employees Nos *** *** *** *** *** ***
Trend Indexed 100 101 95 95 95 95
Productivity per day MT/days *** *** *** *** *** ***
Trend Indexed 100 119 109 126 122 124
Productivity per
employee MT/Nos *** *** *** *** *** ***
Trend Indexed 100 118 115 133 128 131
125. The salary and wages have increased significantly from the base year to the POI, although the number of
employees has declined. T he productivity per day and productivity per employee has also improved. The
applicant is not claiming injury with respect to the abovementioned parameters.166
K.6 Growth
K.6.1 Submission of the domestic industry
126. The domestic industry has made the following submission s with respect to its growth:
a. The applicant recorded positive growth in the period April 2020 to September 2021, but recorded a
negative growth in majority of the parameters in the POI.167
K.6.2 Submissions of the other interested party
127. The other interested party has made no submissions with respect to growth.
K.6.3 Examination of the Authority
128. The growth in terms of production, capacity utilization, domestic sales volume, inventories, profits, cash
profits and return on investment is as per below table:
S.
No. Particula rs UOM 2019 -20 2020 -21 POI
1 Production Y/Y *** *** ***
2 Sales Y/Y *** *** ***
3 Profit/(Loss) per unit Y/Y *** *** ***
4 Inventory Y/Y *** *** ***
5 Market Share Y/Y *** *** ***
7 Cash Profit Y/Y *** *** ***
163 Written submissions of Hubei, page 13.
164 Id.
165 Id., page 14.
166 Application, para 66.
167 Application, para 72.
8 PBIT Y/Y *** *** ***
9 ROI Y/Y *** *** ***
129. It is noted that during the POI, the growth of the domestic industry has declined as compared to 2020 -21.
However, it may be noted that during the year 2020 -21, the volume of imports from the subject goods was
very low. A plausible reason for the low volume of imports during 2020 -21 is the COVID -19 pandemic
and the consequent decline in demand. Further, in 2020 -21, the profitability of the domestic industry was
substantial. Consequently, the growth of the domestic industry during the POI has declin ed as compared to
2020 -21. The impact of decline in demand is also visible on the production and sales figures of the
domestic industry, which have registered a negative growth in 2020 -21.
K.7 Ability to raise capital investment
130. Applicant submitted that it is faced with low return on capital employed and that its ability to raise capital
investments have significantly weakened due to the presence of dumped imports.168 However, the
applicant has not provided any evidence to substantiate its claim. Therefore, the Authority is unable to
conclude that the domestic industry is suffering injury on this parameter.
K.8 Conclusion on injury
131. Having examined all parameters above, the Authority has observed that:
i The volume of imports has declined from the base year as compared to the POI. There is an increase in
imports during the POI as compared to the previous year, however, imports in relation to the Indian
production and the total demand has declined as compared to the base year.
ii Although there is an increase in imports duri ng the post -POI period, the landed price of the imports during
this post -POI period is substantially higher than the landed price during any other examined period. In
fact, the landed price during this period is higher than the NIP calculated for the POI.
iii The market share of the domestic industry during the POI has significantly improved. Further the
applicant is the sole domestic producer that is selling the PUC in the Indian market. Apart from the
applicant, there is one other domestic producer in India; however, the other domestic producer is not
selling the PUC in the Indian market. The market share of imports from the subject country have declined.
iv Imports from the subject country and market share of imports is significantly lower during the POI as
compared to the period January 2020 to June 2011. There has been a positive growth of Indian producers
in the market. The domestic producers have become stable and are able to compete with the imports even
without the protection of the duty.
v The price undercu tting and price suppression/depression throughout the entire examined period, except the
second half of the POI is negative. However, during the second half of the POI, the price of raw materials
has substantially increased, which has contributed to the si gnificant increase in cost of production of the
applicant, and consequently, the positive price undercutting and price suppression/depression during this
period.
vi The performance of the domestic industry in terms of production, installed capacity, sales vol umes has
improved during the POI as compared to the base year. This is despite the increase in raw material price
during the POI.
vii The domestic industry has been profitable throughout the entire examined period except the second half of
the POI. Only during the second half of the POI, the profitability (profits, cash profits, ROCE and PBIT)
are negative. The Authority notes that the negative profitability during the second half of the POI is
attributable to the increase in cost of raw materials during this p eriod.
viii The average inventories of the applicant have increased during the POI as compared to the base year.
However, the inventories during the POI have declined when compared to the previous year.
ix The salary and wages, productivity per day, and productivi ty per employee has improved during the POI
as compared to the base year. The applicant has not claimed injury in this respect.
x The applicant has shown positive growth in terms of its production and sales figures, but has shown
negative growth in terms of profitability. As examined above, the negative growth in terms of the
profitability of the applicant is as a result of the increase in raw material cost.
168 Application, para 73.
*****
L POST -POI ANALYSIS
L.1 Submission of the domestic industry
132. The domestic industry has contended that the decline in performance during the 2nd half of the POI was
not a temporary phenomenon, but rather the import trend and the injury to the domestic industry has
persisted even after the POI. Vide email dated 29th July 2023, the domestic industry has furni shed
information for the April 2022 to September 2022 period to argue that the domestic industry has continued
to suffer injury even after the POI. The domestic industry has submitted that October 2021 to March 2022
was not a temporary phenomenon, but the alleged dumping of the Chinese exporters has continued
thereafter.169 The applicant has submitted that imports of the applicant have increased in absolute terms in
the period April 2022 to September 2022.170 The domestic industry has submitted that their marke t share
has declined, whereas the market share of the Chinese Exporters has increased to more than ***%. The
applicant submitted that it had the capacity to cater to ***% of the total domestic demand, however, it is
unable to capture sufficient market shar e.171
133. The applicant has further submitted that even though the import price during the April 2022 to September
2022 period have increased, the imports are still being made at dumped prices.172 The domestic industry
further submitted that the difference between the selling price and the raw material cost continues to
remain low even in the April 2022 to September 2022 period:173
S.
No. Period UOM Selling price Raw material cost Difference Difference (%)
1 2018 -19 Rs/KG *** *** *** ***
2 2019 -20 Rs/KG *** *** *** ***
3 2020 -21 Rs/KG *** *** *** ***
4 2021 -22 (H1) Rs/KG *** *** *** ***
5 2021 -22 (H2) Rs/KG *** *** *** ***
6 2022 -23 (H1) Rs/KG *** *** *** ***
134. The applicant further submitted that while it is true that the raw material price has increased more sh arply
in the domestic market as compared to the international market, however, despite the increase, the raw
material price in the domestic market continued to remain low.174 The applicant contended that the decline
in profitability is due to the sourcing of raw material from the domestic market and if the applicant had
sourced raw material from the international market, its losses would have been higher:175
S.
No. Particulars Actual
(Rs./MT) Considering entire raw material
imported (Rs./MT)
Apr-Sep'20 Oct'-
Mar'
21 Apr-Sep'20 Oct'-
Mar'
1 Raw material cost *** *** *** ***
2 Other cost *** *** *** ***
3 Total cost *** *** *** ***
4 Selling price *** *** *** ***
5 Profit/unit *** *** *** ***
L.2 Examination of the Authority
135. The Authority notes that the volum e of imports during the April 2022 to September 2022 period has
169 Email received from the applicant dated 29th July 2023, paragraph 1.
170 Id., para 2.
171 Id., para 3.
172 Email from the applicant dated 29th July 2023, paragraph 5.
173 Id., para 6.
174 Email from the applicant dated 29th July 2023, para 9.
175 Id., para 9.
increased. However, it is to be noted that the landed price of imports during this period has also
substantially increased. Furthermore, it is seen that there is also a substantial increase in demand for the
PUC during the April 2022 to September 2022 period, while the domestic sales of the domestic industry
has increased as compared to the previous years:
Particulars UOM 2018 -19 2019 -20 2020 -21 2021 -22
H1*
2021 -22
H2* 2021 -
22 2022 -23
H1*
Import volume MT *** *** *** *** *** *** ***
Domestic sales MT *** *** *** *** *** *** ***
Trend Indexed 100 111 103 106 96 101 111
Domestic sales including
captive consumption MT *** *** *** *** *** *** ***
Trend Indexed 100 108 109 119 102 110 113
Demand (including
captive sales of DI) MT *** *** *** *** *** *** ***
Trend Indexed 100 96 86 88 93 91 139
Demand (excluding
captive sales of DI) MT *** *** *** *** *** *** ***
Trend Indexed 100 96 79 75 88 82 143
Market share of imports
(excluding cap tive sales
of DI) % *** *** *** *** *** *** ***
Trend Indexed 100 83 61 46 93 71 134
Market share of applicant
(excluding captive sales
of the DI) % *** *** *** *** *** *** ***
Trend Indexed 100 116 132 142 109 125 79
Market share of applicant
(includi ng captive sales of
the DI) % *** *** *** *** *** *** ***
Trend Indexed 100 111 127 134 109 122 81
* means the figures have been annualised
136. It is noticed that the installed capacity of the applicant has remained the same throughout the examined
period . Throughout the examined period (including the post -POI period), the domestic sales of the
applicant have remained at almost same levels with minor variations year -on-year (fluctuating between
***MT to ***MT). It is further noticed that the post -POI perio d is the only period wherein the volumes of
imports from the subject country is higher than the domestic sales of the applicant. From the graph and the
table above, it appears as if the sales of the domestic industry have not been impacted by the imports f rom
the subject country. Throughout the examined period, the domestic sales of the applicant have been at a
constant and stable level with minor variations year -on-year. Even from the period 2018 -19 to the first
half of the POI, when the volume of imports from the subject country were very low and declining, the
domestic sales of the applicant still remain at the stable levels, with minor variations. The increase in
volume of imports during the post -POI period has not had an impact on the stable domestic sa les of the
domestic industry.
137. In the post -POI period, the imports from the subject country do not appear to have disturbed the sales of
the applicant, but rather the total demand for the subject goods in India has increased, and the imports
from the subj ect country have catered to this increase in demand, without substantially affecting the sales
of the domestic industry. It must further be noted that during the post -POI period, the total domestic
demand is much higher than the installed capacity of the d omestic industry and the demand appears to be
growing. The applicant has argued that it has the capacity to cater to more ***% of the total domestic
demand in India. However, based on the trends of the domestic sales, it appears that the domestic industry
is unable to increase its domestic sales above a certain level, even when the import volumes were very
low.
138. Upon analysis of the market share, a preliminary inference can be drawn that the market share of the
domestic industry appears to be declining. How ever, when these figures are juxtaposed with the price
behaviour of imports and domestic sales, a completely different picture is seen. As mentioned in the table
below, it is noted that the selling price of the domestic industry is significantly below the landed value of
imports. The principles of economics dictate that all other things being equal (e.g., quality of a product),
consumers would prefer to buy goods offered at lower prices as compared to higher priced goods. Despite
selling their goods at pric es lower than the imports, the domestic industry has not been able to capture a
larger share of the growth in demand. The domestic industry has not been able to afford any plausible
explanation for the same. The capture of the growth in demand by imports t herefore does not appear to
adversely impact the competitiveness of the domestic industry in the post -POI period:
Particulars UOM 2018 -19 2019 -20 2020 -21 2021 -22 (H1) 2021 -22 (H2) 2022 -23
(H1)
Landed price Rs./Kg 787 747 831 841 837 978
Trend Indexed 100 95 106 107 106 124
Selling price Rs./Kg *** *** *** *** *** ***
Trend Indexed 100 98 108 109 115 125
Raw material cost Rs./Kg *** *** *** *** *** ***
Trend Indexed 100 96 99 115 138 144
139. As seen from the table above, the domestic industry also had the opportunity to increase its selling prices,
given the significant difference in landed value of imports and the selling price of the domestically
produced goods, and therefore, increase its profits. However, that has not been the case. Furthermore, the
inability of the domestic industry to capture the growth in demand despite selling at low prices shows that
other unknown factors are at play which are inhibiting the domestic industry from capturing the demand.
140. Moreover, the capacity utilisation of the dome stic industry ranged from around ***-***% during the
examined period. Yet, the domestic sales volumes of the domestic industry have not increased beyond a
certain level throughout the examined period. The argument that the domestic has the capacity to cat er to
more than ***% of the total domestic demand is not reasonable since throughout the examined period, the
applicant has dedicated a significant portion of the PUC that it produces to export markets and captive
consumption. Therefore, even with the full capacity utilisation, it is unlikely that the domestic industry
would cater to ***% of the total domestic demand. This is seen from the table below:
Particulars UOM 2018
-19 2019
-20 2020
-21 2021 -22
H1 2021 -22
H2 POI
(2021
-22)
Domestic sales MT *** *** *** *** *** ***
Trend Indexe
d 100 111 103 106 96 101
Export sales MT *** *** *** *** *** ***
Trend Indexe
d 100 99 133 157 186 171
Captive sales MT *** *** *** *** *** ***
Trend Indexe
d 100 96 125 157 118 137
Total sales of the domestic industry MT *** *** *** *** *** ***
Trend Indexe
d 100 106 114 64 61 124
Total demand (including captive consumption of DI) MT *** *** *** *** *** ***
Trend Indexe
d 100 99 88 88 102 140
Total demand (excluding captive consumption of
DI) MT *** *** *** *** *** ***
Trend Indexe
d 100 96 79 - - 82
Import volume MT 839 662 397 147 338 485
141. Further, the argument that the domestic industry was not able to capitalise on the increase in demand due
to imports from the subject country cannot be accepted since the domestic industr y has not been able to
increase its domestic sales volume above a certain level throughout the examined period – including when
the volume of imports from the subject country was low (i.e., during 2018 -19 to the first half of the POI).
Moreover, it must al so be noted that from 2018 -19 to the first half of the POI, the profitability of the
domestic industry was positive and significant while the volume of imports from the subject country were
low. The applicant’s argument that its market share has declined a lso cannot be accepted. As explained
above, the trends in market share cannot not be characterised as a decline in the market share of the
domestic industry, but rather an increase in domestic demand, which the domestic industry has not been
able to cater to. The increased volume of imports has been able to cater to this increase in domestic
demand despite the imports being priced higher than the selling price of the domestic industry.
142. It is further noted that the increase in volume of imports must be ana lysed in the context of the price of
imports, price of raw materials and selling price of the domestic industry:
Particulars UOM 2018 -19 2019 -20 2020 -21 2021 -22 (H1) 2021 -22 (H2) 2022 -23
(H1)
Landed price Rs./Kg 787 747 831 841 837 978
Trend Indexed 100 95 106 107 106 124
Selling price Rs./Kg *** *** *** *** *** ***
Trend Indexed 100 98 108 109 115 125
Raw material cost Rs./Kg *** *** *** *** *** ***
Trend Indexed 100 96 99 115 138 144
143. It is seen that although the volume of imports during the 6 -mont h post -POI period is higher than the
domestic sales volume of the applicant, the landed price of the imports is higher as well. Despite the
higher landed price, the sales volumes of the subject imports are higher than the domestic sales of the
applicant. F urther, during the 6 -month post -POI period, the raw material price has increased by Rs. ***per
MT ( ***% increase) as compared to the preceding 6 months, whereas the landed value has increased by
Rs. ***per MT ( ***% increase), and the selling price has incr eased by Rs. *** per MT ( ***% increase):
Particulars Oct’ 21 to March’ 22
(Rs./Kg) Apr’ 22 to Sept’ 22
(Rs./Kg) Increase
(Rs./Kg) Increase
(%)
Selling price *** *** *** ***
Raw material cost *** *** *** ***
Landed price *** *** *** ***
144. The above table indicates that increase in landed price of the subject imports is higher than the increase in
raw material price. Further, the applicant has also been able to increase its selling price at a higher rate
than the increase in cost of raw materials. It is al so noticed that the domestic industry does not appear to
be facing price pressure from the subject imports since the landed price of the subject imports is higher
than the selling price of the domestic industry.
M INJURY MARGIN
M.1 Submission of the domestic industry
145. The domestic industry has made the following submissions with respect to the injury margin:
a. Since there was negative injury margin during April 2021 to September 2021, the inclusion of 2021 -22 as
a whole for the injury analysis would not be appr opriate.176
b. Performance of the domestic industry in the period April 2021 to September 2021 was reasonably good,
whereas it has deteriorated sharpy in the period October 2021 to March 2022. Inclusion of April 2021 to
September 2021 would imply inclusion of a period when the domestic industry did not suffer material
deterioration in performance.177
c. The Authority must apply the W -T Methodology to assess the injury margin instead of the W -W
Methodology.178
d. The injury margin was negative in the period April 2021 to S eptember 2021, but increased to ***% in
October 2021 to March 2022. Therefore, a calculation done on average basis will imply merging of two
periods when the domestic industry was not suffering from the Chinese dumping.179
e. While the WTO has held that ‘zeroin g’ of dumping is against the mandate of the anti -dumping agreement,
the agreement does not impose restrictions on the Authority to note undertake ‘zeroing’ for injury
margin.180
f. The Authority may only consider those transactions which are below the non -injur ious price for
determination of the injury margin and quantum of duty since the domestic industry’s concerns are only
against the low -priced imports. Hence there is no reason to consider high priced imports under the
determination as well.181
176 Written submissions of the applicant, para 17(a).
177 Id., para 17(c).
178 Id., page 6.
179 Written Submissions of the Applicant, para 26.
180 Id., para 36.
181 Id., para 35.
M.2 Submission of the other interested party
146. The other interested party has made the following submissions with respect to the injury margin:
a. The consolidated data for the POI should be considered by the Authority for computation of the injury
margin.182
b. The petitioner had r equested the Authority to consider a 6 -month POI for the assessment of injury,
however, the Authority has decided to consider a 12 -month POI.183
c. As per paragraph 5.10 of the Manual of Operating Practices for Trade Remedy Investigations, the POI,
once fixed b y the Authority, cannot be modified.184
M.3 Examination of the Authority
147. The determination of injury margin neither reflects the injury in quantitative terms nor does it confirm the
existence of injury. However, since the domestic industry is not suffering inju ry due to the dumped
imports, the Authority does not find it necessary to determine the injury margin.
*****
N CAUSAL LINK AND NON -ATTRIBUTION ANALYSIS
N.1 Submissions of the domestic industry
148. The domestic industry has made the following submissions with respec t to the causal link and non -
attribution analysis:
a. There are negligible imports from countries other than the subject country and are high priced.185
b. The demand for the PUC in India has increased during the POI, while the domestic sales of the applicant
have declined.186
c. There are no trade restrictive practices in India, there has been no significant development in technology,
the applicant has segregated its export performance, the productivity of the applicant has moved in tandem
with changes in production, t he data provided by the applicant relates only to its performance of the
PUC.187
d. The applicant has not faced constraints of raw materials shortage, power shortage, impact of any tax
differential, lack of adequate capacity or investment constraints.188
e. The imp ort price of the subject imports has declined during the POI as compared to the previous years,
allowing it to increase its import volumes.189
f. The import price of the subject imports is significantly below the cost of sales.190
g. The price pressure has significa ntly reduced the applicant’s profits, cash profits and return on capital
employed earned by the domestic industry.191
h. Increase in volume of imports has taken away the market share of the domestic industry.192
N.2 Submission of the other interested party
149. The other interested party has made the following submissions with respect to the causal link and non -
attribution analysis:
a. The WTO Appellate Body, in US – Hot Rolled Steel has held that in a non -attribution analysis, the
investigating authorities are not required t o separate and distinguish the injurious effects of other known
causal factors from the injurious effects of the dumped imports.193
182 Written submissions of Hubei, page 7.
183 Id.
184 Id.
185 Application, para 96.
186 Id., para 98.
187 Id., para 99.
188 Application, para 102.
189 Id., para 104 (i).
190 Id., para 104 (ii).
191 Id., para 104 (iii).
192 Id., para 104 (iv).
193 Written Submi ssions of Hubei, page 15.
b. The Authority is required to separate the injury caused to the domestic industry from the injurious effects
of other factors.194
c. Internal problems, depressed market conditions globally, impact of COVID -19, the influence of the
currency devaluation, inflation, price increase of bulk drug commodities are factors which have
contributed to the injury of the domestic industry.195
d. The Indi an rupee has weakened post the Russia -Ukraine war, which has led to inflation. This is the cause
for injury to the domestic industry.196
N.3 Examination of the Authority
150. Para (v) of Annexure – II to the AD Rules, 1995 requires the Authority to establish that the domestic
industry is suffering injury due to the dumped imports. At the same, the Authority is required to examine
other known factors other than the dumped imports that could have impacted the performance of the
domestic industry so that the injury cause d by other known factors is not attributable to the dumped
imports of the subject goods. The relevant factors in this respect include the volume of subject goods not
sold at dumped prices, contraction in demand or changes in the pattern of consumption, tra de restrictive
practices, changes in technology, the export performance of the domestic industry and the productivity of
the domestic industry. The Authority has noted above that the domestic industry has shown a decline in
performance in the second half o f the POI. The Authority has analysed the other factors which may have
contributed to the domestic industry’s decline in performance. The aforementioned factors have been
examined below:
N.3.1 Contraction in demand
151. It is noted that the demand for the subject goo ds has declined during the POI as compared to the base year.
However, the sales of the domestic industry have not changed substantially, whereas the volume of
imports has declined from the base year as compared to the POI. There has been an increase in vol ume of
imports during the POI as compared to the preceding year.
N.3.2 Change in pattern of consumption
152. None of the interested parties have argued or brought forth any evidence which establishes a change in
pattern of consumption.
N.3.3 Trade restrictive practices
153. None of the interested parties have argued or brought for any evidence regarding the existence of trade
restrictive practices.
N.3.4 Development in technology
154. None of the interested parties have argued or brought forth any evidence to demonstrate any advancement
in technology in the manufacturing of the PUC.
N.3.5 Export performance of the domestic industry
155. The applicant’s export performance has improved during the POI as compared to the base year.
N.3.6 The performance of other products of the domestic industry
156. The injury an alysis has been conducted based on the domestic industry’s performance with respect to the
PUC only. Therefore, the performance of other products of the domestic industry is not relevant for the
purpose of the present investigation.
N.3.7 Depressed global market conditions
157. Hubei has argued that the applicant’s performance has declined due to the depressed global market
conditions as well as the impact of COVID -19. Hubei has further argued that the Russia -Ukraine war has
led to a devaluation of the Indian rupee, which is the cause for the injury of the domestic industry.
However, the Authority notes that apart from merely making such assertions, Hubei has not provided any
evidence to establish its claims.
194 Id., page 16.
195 Id., page 17.
196 Id., page 17.
N.3.8 Increase in the price of raw materials
158. The Authority no tes that the profitability parameters of the domestic industry has been positive throughout
the entire examined period except the second half of the POI. The applicant has also stated that the price
of raw materials during the second half of the POI has in creased substantially, whereas the CIF import
price has not moved in tandem. The applicant has stated that the increase in price of raw materials, along
with the imports from the subject countries are causing injury.
159. The Authority notes the WTO Panel Repor t in EC – Salmon (Norway)197 that any increases in production
costs of the applicant is a relevant factor in assessing the causality of injury to the domestic industry. In
this case, it was argued that the EC industry had experienced significant increase in in per unit costs of
production, which explains why, despite an increase in sales volumes, and constant prices (measured in
pounds sterling) the domestic industry incurred losses. It was argued that if the domestic industry’s cost of
production had not inc reased, it would have been profitable. The Panel observed that the EC was required
to examine the impact of the increase in product cost in its causal link analysis. The Panel observed as
under:
7.660 The EC asserts that Norway has failed to make a prima facie case with respect to its argument that
increased costs were a cause of injury to the EC industry, and that in order to do so, Norway would have
to explain to the Panel why it believes costs should not have increased as they did. We do not agree.
Norw ay has demonstrated that the facts before the investigating authority showed that EC industry
production costs increased, and that it was argued to the investigating authority that that increase in costs
caused injury. The Provisional and Definitive Regula tions do not address this contention. The EC has not
brought forward any information that was before the investigating authority or analysis on this issue. In
the absence of consideration of this argument, the EC has not demonstrated that an objective and
unbiased investigating authority could have concluded that increased production costs were not causing
injury to the domestic industry, and therefore that injury caused by this factor was not attributed to
dumped imports. In these circumstances, our view i s that Norway has demonstrated that the EC failed to
comply with Article 3.5 of the AD Agreement.
160. The Authority notes that there has been an increase in the prices of raw materials for the PUC in the
Indian market. This has contributed to the injury being caused to the domestic industry. As noted above,
the raw material prices of the domestic industry has increased during the second half of the POI. This has
coincided with the decline in performance and profitability parameters of the applicant during the v ery
same period. Therefore, the Authority concludes that the injury to the domestic industry, if any, during the
second half of the POI is as a result of the increase in raw material prices during this period. The Authority
therefore concludes that the inj ury to the domestic industry, if any, is not caused by the imports from the
subject country.
****
O INDIAN INDUSTRY ISSU ES
O.1 Submission of the domestic industry
161. The domestic industry has made the following submissions with respect to the Indian industry issue s:
a. The applicant is the only existing producer that is selling the PUC in the Indian market. Continued
dumping could lead to shortage of production and sales completely.198
b. Cost of API is not significant in the cost of formulations. The duty on the PUC would have an
insignificant impact on the cost of the final product.199
c. The cost of metronidazole API does not play a major role in the final price of the product for the end
consumers. The price for the formulation does not increase in the same proportion as th e Metronidazole.200
d. The impact of the anti -dumping duty on the final formulation is very negligible.201
e. There is significant variation in the prices of the medicines which use Metronidazole as an API. This
197 Panel Report, European Communities – Anti-Dumping Measure on Farmed Salmon from Norway , WT/DS337/R , adopted
15 January 2008.
198 Application, para 82.
199 Id., para 83.
200 Id., para 84.
201 Id., para 85.
shows the ability of the users to bear the cost of th e duty.202
f. Chinese producers have offered very low prices to Indian users in an attempt to eliminate competition
with Indian producers. Once the Indian industry is wiped out, there would be an overdependency on
Chinese producers.203
g. The domestic industry has b een competitive and capable of supplying the product to the consumers in the
competition to fair priced imports.204
h. Souring the PUC from the domestic industry is in the interest of the user industry in India since producers
from the subject country operate w ith the objective of maximizing their profits. The Indian industry, being
located within the same territory as consumers, will keep the consumer’s interest in mind. The consumers
will have to maintain a higher degree of inventory if they have to depend on imported material. On the
contrary, they would not be required to hold a high level of inventory in case they are purchasing from the
domestic producers.205
i. It cannot be presumed that the operations of the consumers would become unviable, merely because
dump ing is prevented by imposition of duty.206
O.2 Submissions of the other interested party
162. The other interested party has made no submissions with respect to the Indian industry’s interest.
O.3 Examination of the Authority
163. The Authority notes that imposition of trade remedial measures is intended to ensure a level playing field.
However, the imposition of such measures may impact different stakeholders variedly. The Authority had
publicized the initiation notification as required under AD Rules, 1995 and also sent a co py of the
application to industry associations as well as to the known importers according to the list provided by the
applicant in order to elicit the views of other stakeholders regarding the impact of the anti -dumping duties,
if imposed.
164. No user indust ry or importer has participated in the investigation. At a very late stage in the investigation,
a few days prior to the issuance of disclosure statement, a company named [ ***] which claimed to be an
importer and user of the subject goods sought opportunit y to present its views before the Authority. It also
explained in its letter that it has been consistently procuring the subject goods from the applicant207.
However, as has been explained above in detail in procedure, the time for registration as an interes ted
party had long been over. Granting opportunity at this stage would prejudice the rights of other interested
parties.
165. The Authority notes the submissions of the applicant that the imposition of the duty would not have an
impact on the end users since Me tronidazole does not have a substantial cost on the end product, and
therefore, the duties on metronidazole would not adversely impact the consumers of the final product. The
Authority notes that the PUC is used as an API in several drugs. The Authority al so notes that in the post -
POI period the landed price of the imports has increased by ***%. Therefore, the imposition of duty
would further increase the cost of the subject goods. The Authority would consider other comments on
economic interest as given in the post -disclosure comments and would consider the same in the final
findings.
166. The Authority notes that the subject good is an active pharmaceutical ingredient, which is used to
manufacture a drug that has been listed in the ‘National List of Essential Medicines’ by the Department of
202 Id., para 86.
203 Application , para 87.
204 Id., para 88.
205 Id., para 89.
206 Id., para 92.
207 Letter from [ ***] dated 25th September 2023:
“As was communicated in our previous letter dated 18 September 2023, it is clarified that [ ***] is both, procuring the Product
Under Consideration (‘PUC’) from the Domestic Indust ry (‘DI’) as well as from the exporters in China PR. Hence, [ ***] is an
importer as well as a user of the PUC and an interested party in terms of the Ru le 2(c) (i) of the Customs Tariff (Identific ation,
Assessment and Collection of Anti· dumping Duty on D umped Articles and for Determination of Injury) Rules, 1995 (‘Indian AD
Rules’). …..
Given that [ ***], [***] , and the DI share a long -standing business relationship, the DI was already aware of the functional email
addresses of these entities. Even then, t he DI chose to use these incorrect email addresses, [ ***] and [***], which have no
relation with [ ***] or its unit/ subsidiary. This is a deliberate attempt by the DI to get an anti -dumping protection while keeping a
major user/ importer of the PUC in the dark, and by not allowing it to participate in the investigation before the Hon'ble
Authority. ”
Pharmaceuticals, Ministry of Health and Family Welfare.208 Further, Metronidazole medicine has been
subject to several price control orders by the National Pharmaceutical Pricing Authority of India, Ministry
of Chemicals and F ertilizers.209
*****
P POST -DISCLOSURE ANALYSIS
167. The Authority circulated the disclosure statement containing all essential facts under consideration for
making final recommendations to the Central Government to all interested parties on 19th September 2023.
The interested parties were directed to file their comments on the disclosure statement by 25th September
2023. The Authority has examined all post – disclosure comments made by the interested parties in these
final findings to the extent deemed relevant. An y submission which was merely a reproduction of the
previous submission and which had been adequately examined by the Authority have not been repeated
for the sake of brevity.
P.1 RE: Domestic industry and standing
168. Hubei has commented that Aarti Drugs Limited cannot be considered as an eligible domestic industry as it
has imported the subject goods during the period of investigation not under advance authorization as
claimed in the petition, but in ordinary course of trade.210 Hubei has stated that the applicant has made the
payment at the Indian Custom Ports for the imports made by them. The details of which are as under:
Row Labels Sum of Quantity Sum of CIF Value (USD)
2021 -22 *** ***
Injury Period *** ***
Post POI *** ***
Pre-injury Period *** ***
Grand T otal *** ***
169. Hubei has submitted that the same situation was noticed in the 2nd sunset review investigation concerning
imports of ‘Metronidazole’ originating in or exported from China PR, wherein Aarti Drugs Limited was
excluded from the scope of the dome stic industry.211 Hubei has further submitted that in the 3rd sunset
review investigation, the Authority had rejected the application of Aarti on the same grounds.212
According to Hubei, the High Court of Delhi, in W.P. No. 7464/2017 has noted that the Aarti D rugs
Limited cannot be considered as an eligible domestic industry.213 Hubei has further submitted that the
applicant is a habitual user of anti -dumping measures.214
170. The Authority re -iterates its observations in paragraphs 20 to 24 of the disclosure statement as well as
paragraphs 20 to 24 of these findings that the volume of imports made by the applicant during the current
POI is lower than the imports by the applicant during previous investigations. Further, the Authority re -
iterates that the applicant has i mported the subject goods under advance authorization licenses in order to
meet its export obligations. Hubei has not provided any evidence to demonstrate that imports were not
made by the applicant under advance authorization licenses. The Authority confi rms its observations in
the disclosure statement regarding the standing of the domestic industry and holds that the applicant
constitutes a ‘domestic industry’ in terms of Rule 2(b) of the AD Rules.
P.2 RE: Assessment of Dumping and Injury Margins
171. The applican t has submitted that in its email dated 29th July 2023, it has requested the Authority to
determine half yearly dumping margins, injury margins and price undercutting.215 The applicant has stated
that the Authority has conducted half yearly examination of th e volume and price effect of imports on the
performance of the domestic industry, however, the Authority has not determined the injury margin and
208 See “National List of Essential Medicines 2022 ”, Notification No X.11035/346/2021 -DRS, Ministry of Health and Family Welfare, available at:
https://main.mohfw.gov.in/sites/default/files/Notification%20and%20Report%20on%20National%20List%20of%20Essential%20Med icines%2C%
202022.pdf , accessed on 21st September 2023, at 10:59 a.m.
209 See Notification No. CG -DL-E-01042023 -244884, published in Gazette of India, Extraordinary, Part II – Section 3 – Sub-section(ii), available
at: https://egazette.gov.in/WriteReadData/2023/244884.pdf , accessed on 21st September 2023, at 11:04 a.m.
210 Post disclosure comments of Hubei, page 3.
211 Final findings No. 15/18/2010 -DGAD dated 29th June 2012, paragraphs 4 and 5
212 Post disclosure comments of Hubei, page 4.
213 Id., page 4.
214 Id., page 5.
215 Post disclosure comments of applicant, paragraph 6.
dumping margin on half yearly basis.216 According to the applicant, a half yearly analysis implies that the
Auth ority has found that there is significant differences in the parameters over the period of investigation
which warrant that an analysis considered for the period of investigation as a whole will not be
appropriate.217 The applicant has therefore submitted th at the dumping and injury margins must be
calculated on a half yearly basis.
172. The applicant has submitted that in several investigations,218 the Authority has conducted a half yearly
analysis where it has found that there is significant difference in cost of production and selling price with
time.219 The applicant has also referred to the Manual of Operating Practice for trade remedy
investigations to argue that a half yearly computation of dumping and injury margin is permitted.220
173. At the outset, it is clarified that the applicant’s assumption that the Authority has carried out half -yearly
analysis as it had found significant differences in price over the period is misplaced. The Authority has
analysed the injury information based on the complete POI. Given the f act that the applicant had made
several submissions regarding injury in H2 of the POI, the Authority has merely bifurcated the POI to
examine the applicant’s submissions. The Authority further examined six months of post -POI data to
verify whether the alle ged injury and conditions in H2 of the POI have continued beyond the POI.
However, as has been mentioned in the “injury” section above, even after considering the submissions of
the applicant, the Authority has reached the conclusion that H2 period of the POI was an aberration.
174. The Authority notes that in the facts and circumstances of the present case, while there has been an alleged
variation in the dumping and injury margins in the first and second half of the POI, the Authority notes
that this is not a result of the change in pattern of export prices/landed values. The Authority has already
determined that there is no pattern of difference in export price between the first half and the second half
of the POI. Further, the Authority notes that the applic ant has procured its raw materials from both
domestic and international sources. The Authority has also noted above that the domestic raw material
prices of the applicant have increased at a higher rate than the international raw material prices during the
second half of the POI.221 Further, in the first half of the POI, the price of domestically sourced 2MNI
was lower than the prices of the internationally sourced 2MNI; however, during the second half of the
POI, the price of domestically sourced 2MNI has i ncreased, and is higher than the prices of the
internationally sourced 2MNI.
175. It is evident that any alleged variation in the dumping or injury margins in the second half of the POI is as
a result of volatility which is specific to the domestic industry al one (i.e., increase in domestic raw
material prices). Since the main cause of the difference in dumping and injury margins during the two
halves of the POI is the variation in domestic raw material prices, the Authority does not deem it fit to
compute the dumping and injury margins on a half yearly basis.
176. Hubei has submitted that the dumping and injury margins which has been computed for it must not be the
same. Hubei has submitted that the Authority must grant a lower rate of duty to it as compared to the
residual category since it has cooperated with the Authority in the investigation. The Authority notes that
since it has concluded that no injury has been caused to the domestic industry due to the alleged dumping
of goods from the subject countries, the A uthority sees no need to examine this contention of Hubei.
P.3 RE: Determination of dumping & injury margin by comparison of weighted average normal
value/NIP to transaction -wise export price/landed value.
177. According to the applicant, the Authority has inapprop riately interpreted and partially considered the
request of the applicant for adopting the W -T Methodology for computation of the dumping margin and
injury margin. The applicant claims that the Authority rejected the applicant’s proposal for computation of
the dumping and injury margins on the grounds that the WTO Panel and Appellate Body has held that
zeroing is not permitted under the Anti -Dumping Agreement.222
216 Id., paragraph 9.
217 Id.
218 Anti -Dumping Investigations concerning imports of Phenol originating in or exported from Japan and
Thailand; Antidumping investigations involving imports of Acetone originating in or exported from Japan and
Thailand; Anti -Dumping Investigations concerning imports of ‘Carbon Black used in rubber applications’
originating in or exported from Australia, China PR, Iran, Malaysia, Russia and Thailand; Anti -Dumping
investigation concerning imports of ‘Chlorinated Polyvinyl Chloride (CPVC) - Whether or not further processed
into compound’ from Korea RP and China PR; Anti -dumping investigation concerning imports of Melamine
originating in or exported from the European Union, Japan, Qatar and the United Arab Emirates; Sunset Review
of anti -dumping duty on Viscose Sta ple Fibre from China PR
219 Post disclosure comments of applicant, paragraph 11.
220 Id., paragraph 10.
221 See paragraphs 88, 116 & 117, supra .
222 Post disclosure comments of applicant, paragraph 12.
178. At the outset, the Authority wishes to indicate that the applicant has not understood the basis on which the
Authority has rejected the applicant’s proposal for adopting the W -T methodology. In paragraphs 58 to 61
of the disclosure statement (paragraphs 58 to 61 of these findings), it is clear that the Authority has
declined to adopt the W -T methodol ogy since there is no pattern of export prices which differs across
different time periods. The observations of the Authority with respect to zeroing was in response to the
applicant’s separate request for adopting of the zeroing methodology as proposed in its written
submissions.223 The applicant has not appreciated the reasoning adopted by the Authority in paragraphs 58
to 61 of the disclosure statement (paragraphs 58 to 61 of these findings).
179. According to the applicant, the Authority has accepted that ther e has been an increase in cost of raw
materials during the second half of the POI.224 The applicant submits that the very fact that the raw
material prices have increased implies that the normal value has increased.225 The applicant has further
submitted that the fact that the export price has declined when the normal value has increased itself shows
that there is a significant difference in the pattern of prices between the two periods.226 The applicant has
submitted that between the first half of the POI and th e second half, the dumping and injury margins
differ, which establishes that a comparison on the basis of weighted average is not appropriate.227 The
applicant has provided the following information to substantiate its claims:
Particulars UOM Separate Compar ison
POI
1st Half 2nd Half Wt. Average
Export Price Rs./Kg *** *** *** ***
Normal Value Rs./Kg *** *** *** ***
Dumping Margin Rs./Kg *** *** *** ***
Non-injurious price Rs./Kg *** *** *** ***
Landed price Rs./Kg *** *** *** ***
Injury margin Rs./Kg *** *** *** ***
Import volumes MT *** *** *** ***
180. The applicant has also referred to the WTO decision of US – AD/CVD measures on Large Residential
Washers from Korea , the US Court of Appeals’ decision in Apex Frozen Foods Pvt. Ltd. v. United States ,
the European Commission’s decision in the case of Certain Tube and Pipe Fittings of Iron or Steel
Originating in Russia and Turkey and the Ld. CESTAT’s order in the case of Kothari Sugars &
Chemicals Ltd. v. Designated Authority to argue that the W -T method ology must be adopted.228
181. With respect to the applicant’s submission that the dumping margin and the injury margin has increased in
the second half of the POI, the Authority notes that the cause for such an increase in dumping and injury
margins during the second half of the POI is clearly the increase in normal value/non -injurious price,
which is constructed on the basis of the applicant’s data. The increase was primarily due to an increase in
domestic raw material prices during the second half of the POI. As examined by the Authority in
paragraph 58 of the disclosure statement (paragraph 58 of these findings), there is no significant increase
in export price. The increase in raw material cost during the second half of the POI – which has translated
to a hig her normal value and non -injurious price – is the reason for the higher dumping and injury margins
during the second half of the POI. This is not sufficient grounds for applying the W -T methodology.
182. As explained in paragraph 58 to 62 of the disclosure stat ement (paragraph 58 to 62 of these final findings),
in order to adopt the W -T Methodology, the Authority must first determine that there is a pattern of
difference in export price across different time periods. The submission of the applicant that the expo rt
price has declined when the normal value has increased is not relevant in determining whether or not to
apply the W -T methodology under Paragraph 6(iv) of Annexure -I to the Anti -Dumping Rules:
“Subject to the provisions governing comparison in this para graph, the existence of margin dumping
during the investigation phase shall normally be established on the basis of comparison of a weighted
average normal value and export prices on a transaction -to-transaction basis. A normal value established
on a weigh ted average basis may be compared to the prices of the individual export transactions if it is
223 Written Submission of the applicant, paragraph 37.
224 Post d isclosure comments of the applicant, paragraph 16.
225 Id., paragraph 17.
226 Id., paragraph 17.
227 Id., paragraph 20.
228 Post disclosure comments of applicant, paragraphs 20 -24.
found that the pattern of export prices which differs significantly among different purchasers, regions or
time periods and if an explanation is provided as to w hy such differences cannot be taken into account
appropriately by the use of weighted average -to-weighted average or transaction -to-transaction
comparison ” (emphasis supplied)
183. As seen above, the Authority is required to first find if there is a pattern of difference between the export
prices . The argument of the applicant that the Authority should consider the relative increase in normal
value is not a relevant factor in determining whether it is appropriate to apply the W -T methodology under
Paragraph 6(iv ) of Annexure -I to the AD Rules. Contrary to the submissions of the applicant, the
Authority is required to establish that there exists a difference in export price between different time
periods. In the absence of a substantial difference between the expo rt prices of two different time periods,
the Authority cannot resort to the W -T methodology. In paragraphs 58 to 61 of the disclosure statement
(paragraphs 58 to 61 of these findings), the Authority has already found that there is an insignificant
differen ce in export prices between the first half of the POI as compared to the second half. The Authority
has also undertaken a detailed analysis as to why the export price must not be adjusted to account for any
changes in the raw material prices of the domesti c industry.229 Further, as already explained above, a
pattern of difference between export prices is prerequisite for the adoption of the W -T methodology under
Paragraph 6(iv) of Annexure -I to the AD Rules; and since the Authority has found no such differenc es in
export price between the first half of the POI and the second half, the Authority has not deemed it
appropriate to adopt the W -T methodology.
184. The applicant has further submitted that the Authority may adopt the zeroing methodology for
computation o f the injury margin.230 Given the fact that the Authority has decided not to apply the W -T
methodology, the Authority does not deem it fit to apply the zeroing methodology for the determination of
the injury margin.
P.4 RE: The sufficiency of the disclosure of e ssential facts
185. The applicant has claimed that the disclosure statement circulated on 19th September 2023 does not fully
disclose the essential facts. According to the applicant, the disclosure statement is incomplete and does not
disclose facts related to various injury parameters and post -POI analysis.231 The applicant has claimed that
the following are some examples of essential facts which may form the basis of the Authority’s
decision:232
Facts Claim of the applicant
Scope of the product under consideratio n This fact has been clearly stated in the disclosure
statement.
Scope of the like article offered by the domestic industry This fact has been clearly stated in the disclosure
statement.
Scope of the domestic industry This fact has been clearly stated in the disclosure
statement.
Dumping and dumping margin in subject imports This fact has been clearly stated in the disclosure
statement.
Whether the domestic industry has suffered from injury This fact has not been completely established or disclosed
to t he domestic industry. The Authority has not
concluded their analysis after examining the various
injury parameters which resulted in unclear disclosures of
facts.
Post period of investigation analysis The Authority has not preliminarily concluded their
analysis of the post POI.
186. The applicant’s claim as to the lack of adequate disclosure is only on the grounds that the conclusion of
the Authority with respect to the existence of injury and the post -POI conclusion of the Authority has not
been disclosed. Th e applicant has also claimed that the post -POI analysis was incompletely done.233
187. The applicant has argued that Article 6.9 of the Anti -Dumping Agreement and Rules 16 of the AD Rules
provides that the Designated Authority shall, before giving its final find ings, inform all interested parties
229 Paragraph 61 of the disclosure statement; see also paragraph 61 supra .
230 Post dis closure comments of the applicant, paragraph 25.
231 Id., paragraph 30.
232 Id., paragraph 37.
233 Post disclosure comments, paragraph 48.
of the essential facts under consideration which form the basis for its decision. The applicant has relied on
the WTO Appellate Body Report in the case of China – GOES234 to argue that in order to apply definitive
measures at the conclusion of anti -dumping investigations, an investigating authority must find dumping,
injury and a causal link, and ‘essential facts’ with respect to these three factors must be disclosed.235
188. The applicant has also relied on EC – Salmon236 to argue that the ‘essential facts’ are the body of facts
essential to the determinations that must be made by the investigating authority before it can decide
whether to apply the measures, i.e., the facts that are necessary to the process of analysis and decision
making by the investigating authority, and not only those that support the decision ultimately reached.
189. The applicant has also relied on the following observations of the Hon’ble High Court of Gujarat:237
“31.5 Thus, while Article 6.9 does not prescribe a p articular form for the disclosure of the essential facts,
it does require in all cases that the investigating authority disclose those facts in such a manner that an
interested party can understand clearly what data the investigating authority has used, an d how those
data were used to determine the margin of dumping. The disclosure statement, therefore, contains the
intermediate findings and conclusions of the designated authority on the essential facts which would
form the basis for the decision whether or not to apply definitive measures and not final conclusions on
whether or not definite measures are required to be applied. In the opinion of this Court, as rightly
submitted by the learned counsel for the petitioners, the disclosure statement should conta in the
conclusions of the designated authority on those essential facts which would form the basis for its decision
as to whether or not to apply definitive measures and not its conclusions on the basis of those essential
facts. The conclusions on the basi s of the essential facts are to be recorded in the final findings, viz.,
whether or not on the basis of such facts definitive measures are required to be applied. The contention
that the disclosure statement is in the nature of a draft order, therefore, do es not merit acceptance,
inasmuch as, a draft order would also contain conclusions on whether or not definitive measures are
required to be applied. ”
190. The applicant’s claim is that the Authority has not disclosed its conclusion with respect to injury and th e
analysis of the injury during the post -POI period. However, it must be noted that the applicant has not
identified which specific parts of the disclosure statement have been inadequately disclosed. The
Authority notes that as per Article 6.9 of the Anti -Dumping Agreement read with Rule 16 of the AD
Rules, the Authority is merely required to disclose the ‘essential facts under consideration’ which form the
basis for its decision.
191. It is noted that the Hon’ble Court in the abovementioned case has also state d that the Authority has to only
provide intermediate findings and conclusions of essential facts. Further, the WTO Compliance Panel’s
Report in the decision of US – Oil Country Tubular Goods Sunset Review ,238 states as under:
“7.148 We note that Article 6.9 imposes a one -time disclosure obligation on the investigating authorities
regarding the essential facts under consideration which would then form the basis of the authorities' final
determination whether to apply definitive measures. The text of Article 6 .9 clarifies that this obligation
applies with respect to facts, as opposed to the reasoning of the investigating authorities. Furthermore,
Article 6.9 applies to essential facts and not to all facts ….” (emphasis supplied)
192. Further, in Korea – Certain Paper ,239 the Panel observed that:
“6.92 Turning to Indonesia's arguments in support of its claim, we note that Indonesia argues that the
KTC should have disclosed under Article 6.9 the fact that it intended to base its injury redetermination
solely on the inform ation from the original investigation. Here too we disagree with the view that the
KTC's intention to base its injury re -determination solely on the data collected in the original
investigation constituted an "essential fact" within the meaning of Article 6.9. The scope of the obligation
under Article 6.9, in our view, excludes the reasoning of the authorities or their intention as to how
certain determinations will be made . We therefore find that Indonesia has failed to make a prima facie
case with regard to its claim under Article 6.9 of the Agreement. ” (footnotes supplied) (emphasis
supplied)
193. In Guatemala – Cement II,240 the WTO Panel held that the Authority is not required to disclose the legal
234 Appellate Body Report, China – Countervailing and Anti -Dumping Duties on Grain Oriented Flat -Rolled Electrical Steel fro m the
United States , WT/DS414/AB/R , adopted 16 November 2012
235 Post discl osure comments of the applicant, paragraph 31.
236 Panel Report, European Communities – Anti-Dumping Measure on Farmed Salmon from Norway , WT/DS337/R , adopted 15 January 2008
237 Nirma Limited v. Union of India , 2017 (358) E.L.T. 146 (Guj.).
238 Panel Report, United States – Sunset Reviews of Anti -Dumping Measures on Oil Country Tubula r Goods from Argentina – Recourse to Article
21.5 of the DSU by Argentina , WT/DS268/RW , adopted 11 May 2007, as modified by Appellate Body Report WT/DS268/AB/RW
239 Panel Report, Korea – Anti-Dumping Duties on Imports of Certain Paper from Indonesia – Recourse to Article 21.5 of the DSU by Indonesia ,
WT/DS312/RW , adopted 22 October 2007.
basis for its final determinations on injury during the course of an investigation:
“8.238 Mexico's claim is based on Articles 6.1, 6.2 and 6.9 of the AD Agreement. We note that Articles 6.1
and 6.9 impose certain obligations on investigating authorities in respect of "information", "evidence"
and "essential facts". However, Mexico's claim does not concern interested parties' right to have access to
certain factual information during the course of an investigation. Mexico's claim concerns interested
parties' alleged right to be informed of an investigating authority's legal determinations during the course
of an investigation. As for Article 6.2, we note that the first sentence of that provision is very general in
nature. We are unable to interpret such a general sentence in a way that would impose a specific
obligatio n on investigating authorities to inform interested parties of the legal basis for its final
determination on injury during the course of an investigation, when the express wording of Article 12.2
only imposes such a specific obligation on investigating au thorities at the end of the investigation .”
(emphasis supplied)
194. The Authority notes that all essential facts under consideration which were the basis of these findings
were disclosed by the Authority in its disclosure statement dated 19th September 2023. T he applicant has
merely claimed that the Authority has not disclosed its conclusions with respect to the injury and the
‘preliminary conclusions’ on the post -POI injury analysis. As noted by the WTO Panel Reports cited
above, the Authority is required to d isclose only the essential facts and not its conclusions, reasoning and
the legal basis for its injury determination.
195. The Authority notes that the Hon’ble Gujarat High Court241 has observed that “ the disclosure statement
should contain the conclusions of th e designated authority on those essential facts which would form the
basis for its decision as to whether or not to apply definitive measures and not its conclusions on the basis
of those essential facts .” As summarized in Section K.8 of these findings abo ve, the Authority has
concluded that the domestic industry is not suffering from injury on account of the allegedly dumped
imports. Therefore, disclosure of the final determinations regarding the existence of injury in the
disclosure statement would have a mounted to the disclosure of the conclusion of the final findings as a
whole, which, as per the decision of the Hon’ble High Court of Gujarat, is not required to be done in the
disclosure statement.
P.5 RE: Injury Analysis
196. The applicant has claimed that its a rguments mentioned in paragraphs 22 to 24 of its written submission
have not been taken on record.242 The Authority notes that this claim of the applicant is erroneous. At
paragraphs 49 to 51 of the disclosure statement, the Authority has clearly taken on re cord the submissions
of the applicant. Further, the Authority notes that the arguments of the applicant in paragraphs 22 to 24 of
its written submission is with respect to the determination of the pattern of export prices in relation to the
dumping margin calculation and has no relevance to the injury determination.
197. The applicant has contended that even when the imports in the base year were higher, they were
significantly above the cost of the domestic industry and were therefore not impacting the domest ic
industry.243 The applicant has submitted that when the import prices are seen in relation to the raw
material prices, there would be injury:
Particulars Landed price
Rs/MT Raw material cost
Rs/MT Adjusted price
Rs/MT Difference Rs/MT
2018 -19 *** *** *** ***
2019 -20 *** *** *** ***
2020 -21 *** *** *** ***
H1 21 -22 *** *** *** ***
H2 21 -22 *** *** *** ***
2021 -22 *** *** *** ***
198. The applicant has submitted that the landed prices during the POI are below the levels which they should
have been after d ue adjustments for raw materials.244 It is noted that injury must be analysed in the context
of increase in price of imports, price of raw materials and selling price of the domestic industry (as the
240 Panel Report, Guatemala – Definitive Anti -Dumping Measures on Grey Portland Cement from Mexico , WT/DS156/R , adopted
17 November 2000.
241 Nirma Limited v. Union of India , 2017 (358) E.L.T. 146 (Guj.).
242 Post disclosure comments of applicant, paragraph 41.
243 Id., paragraph 42.
244 Post disclosure comments of applicant, paragraph 43.
Authority had observed in paragraph 126 of its disclosure statement).
199. Hubei has re -iterated that it has provided evidence regarding the raw material costs associated with its
production of the subject goods.245 Hubei has further submitted that the applicant has purchased
metronidazole from Hubei prior to the POI and after the POI. Hubei has also stated that the applicant has
sourced 2MNI from Hubei during pre -POI, POI and post -POI periods.246 Hubei has stated that two main
raw materials for the production of the PUC are oxirane, which constitutes about ***% of the t otal raw
material cost and 2 -MNI, which constitutes ***% of the total raw material cost.247 Hubei has provided
information from ‘Oilchem’ website (a leading provider of energy and chemical information and market
price index) that the raw material costs for H ubei did not undergo any material change in the second half
of the POI.248 Hubei further submits that there were no significant increase in cost of 2MNI for its
production of the subject goods.249
200. The Authority re -iterates its observations that the increase in the cost of raw materials, which was not
matched by a corresponding increase in the landed price of the subject goods, was mainly confined to the
second half (H2) of the POI. As outlined in paragraph 143 above, in the six months following the POI,
raw mat erial prices rose by Rs. *** per metric ton (a ***% increase) compared to the preceding six
months. In contrast, the landed value saw a more significant increase of Rs. *** per metric ton (a ***%
increase), and the selling price went up by Rs. *** per metr ic ton (an ***% increase). This unusual surge
in raw material costs relative to the landed value appears to be an anomaly specific to H2 of the POI. The
Authority underscores that any determination regarding the existence of injury cannot be based solely o n
H2 of the POI, given its exceptional nature, more so in view of H1 of the POI and the period following the
POI.
201. Hubei has re -iterated its submission that there is no causal link between the dumping and the alleged
injury.250 The Authority has taken note of the absence of causal link between the dumping and the alleged
injury.
P.6 RE: Post -POI Analysis
202. The applicant has claimed that the volume of imports has increased significantly during the post -POI
period; the imports have tripled in the post -POI period; the increase in imports is over and above the
increase in demand; despite an increase in demand in the post -POI period, the domestic sales did not
increase with the increase in demand; the market share of imports of the subject country has significantly
incre ased in the post -POI period; the market share of the applicant is the lowest in the post -POI period.
203. The Authority found the injury to be non -existent for the period April 2021 – September 2021 (H1). This
fact has also not been disputed by the applicant, even in its post -disclosure comments. Therefore, the
Authority has analysed 6 months of post -POI data to determine if the state of injury and the factors at play
during the period October 2021 to March 2022 were merely an aberration.
204. The Authority re -iterates its conclusion in Section L.2 of these findings regarding the post -POI analysis.
The Authority has found that the imports from the subject country do not appear to have disturbed the
sales of the applicant, but rather the total demand for the subject goods in India has increased, and the
imports from the subject country have catered to this increase in demand, without substantially affecting
the sales of the domestic industry. Further, as mentioned in the table to paragraph 138, the selling price of
the domestic industry is significantly below the landed value of imports during the post -POI period.
Despite selling their goods at prices lower than the imports, the domestic industry has not been able to
capture a larger share of the growth in demand. The domestic industry has not been able to afford any
plausible explanation for the same. The capture of the growth in demand by imports therefore does not
appear to adversely impact the competitiveness of the domestic industry in the post -POI period.
205. Further, the argument that the domestic industry was not able to capitalise on the increase in demand due
to imports from the subject country cannot be accepted since in the six months following the POI, the
domestic industry's selling prices were actually lower t han the landed prices of the imported goods.
According to economic principles, all else being equal (such as product quality), consumers generally
prefer to purchase goods at lower prices rather than higher ones. Even though the domestic industry
offered t heir products at lower prices than the imports, they failed to secure a larger share of the expanding
market demand. The domestic industry has not been able to provide a reasonable explanation for this
245 Post disclosure comments of Hubei, page 6.
246 Id.
247 Id.
248 Id., pag e 8.
249 Id.
250 Post disclosure comments of Hubei, page 10.
phenomenon. Therefore, it seems that the competitivene ss of the domestic industry in the post -POI period
has not been negatively affected by the import's ability to capture the growing demand.
206. As seen from paragraph 140 of these findings above, the argument that the applicant has not been able to
increase it s market share cannot be accepted since the applicant has consistently dedicated a significant
portion of the PUC that it produces to export markets and captive consumption. Therefore, the domestic
industry has not been able to increase its domestic sales volume above a certain level throughout the
examined period – including when the volume of imports from the subject country was low (i.e., during
2018 -19 to the first half of the POI). The applicant’s argument that its market share has declined also
cannot be accepted. As explained above, the trends in market share cannot not be characterised as a
decline in the market share of the domestic industry, but rather an increase in domestic demand. In fact, in
absolute numbers there has been an increase in the sa les of the domestic industry.
P.7 Economic interest and miscellaneous issues
207. With respect to the economic interest, the applicant has re -iterated all its submission made earlier. The
Authority has already addressed the public interest concerns in Section O of these findings.
208. The applicant has suggested that the Authority recommend a benchmark duty.251 However, since the
Authority has already observed that no injury is being caused to the domestic industry due to dumped
imports, this issue is not being considered .
209. Hubei has claimed that the 22% ROCE adopted by the Authority grants undue protection to the domestic
industry.252 Since the Authority has concluded that the applicant is not suffering from injury caused due to
dumping, this submission of Hubei is not requ ired to be addressed.
Q CONCLUSION
210. Based on the submissions made, substantiated information provided by the interested parties and the facts
available before the Authority as recorded and examined in the aforementioned paragraphs and on the
basis of determi nation of dumping and consequent injury to the domestic industry, the Authority
concludes the following:
i The subject goods exported from the subject countries and the article manufactured by the domestic
industry are ‘like article’ to each other in terms of Rule 2 (d) of the AD Rules, 1995.
ii The applicant accounts for ***% of the eligible domestic production. The applicant satisfies the
requirements stipulated under Rule 2 (b) of the AD Rules, 1995 and the application satisfies the standing
requirements un der Rule 5(3) of the AD Rules, 1995.
iii The application contained all information relevant for the purpose of initiation of the anti – dumping
investigation and necessary evidence in terms of Rule 5(2) of the AD Rules, 1995 to justify the initiation
of the present investigation for determination of dumping and material injury to the domestic industry in
terms of Rule 5 (3) of the AD Rules, 1995.
iv The claims regarding confidentiality were accepted wherever warranted and in case, where such
confidentiality cla ims were found to be excessive, the interested parties were directed to disclose the same
or provide appropriate non – confidential summary of the same in terms of Rule 7 of the AD Rules, 1995.
v Dumping margin : One producer from China PR namely Hubei Hongyu an Pharmaceutical Technology
Co., Ltd. had participated in the investigation. Based on the information provided by such exporter and the
constructed normal value, the dumping margin for exports of Hubei Hongyuan Pharmaceutical
Technology Co., Ltd was deter mined to be positive.
vi Volume effect : The volume of imports and the dumping margin of the subject goods from the subject
countries were found to be above de minimis thresholds as stipulated under para (iii) of Annexure – II to
the AD Rules, 1995.
vii With re spect to the volume effect of the imports on the state of the domestic industry as required to be
assessed under para (ii) of the AD Rules, 1995, it was found that the volume of imports has declined
significantly from the base year as compared to the POI. The volume of imports during April 2021 to
September 2021 (H1) was at very low levels. There was an increase in imports during the POI as
compared to the immediate previous year, however, imports in relation to the Indian production and the
total demand ha s declined as compared to the base year.
251 Post disclosure comments, paragraph 51.
252 Post disclosure comments of Hubei, page 10 -12.
viii The market share of the domestic industry during the POI has significantly improved. The market share of
imports from the subject country has declined.
ix Imports from the subject country and market share of imports i s significantly lower during the POI as
compared to the period January 2020 to June 2011. There has been a positive growth of Indian producers
in the market. The domestic producers have become stable and are able to compete with the imports even
without th e protection of the duty.
x Price effect : As regards the price effect of such dumped imports, it was found that the price undercutting
and price suppression/depression throughout the entire examined period, except the second half of the POI
is negative. Howe ver, during the second half of the POI, the price of raw materials has substantially
increased, which has contributed to the significant increase in cost of production of the applicant, and
consequently, the positive price undercutting and price suppressio n/depression during this period.
xi As regards the effect of such dumped on the economic parameters of the domestic industry, the following
conclusions were reached:
a) The performance of the domestic industry in terms of production, installed capacity, sales v olumes has
improved during the POI as compared to the base year. This is despite the increase in raw material price
during the POI.
b) The domestic industry has been profitable throughout the entire examined period except the second half of
the POI. Only duri ng the second half of the POI, the profitability (profits, cash profits, ROCE and PBIT)
are negative. However, if the POI is seen as a whole, the domestic industry is profitable.
c) The average inventories of the applicant have increased during the POI as com pared to the base year.
However, the inventories during the POI have declined when compared to the previous year.
d) The salary and wages, productivity per day, and productivity per employee has improved during the POI
as compared to the base year. The applic ant has not claimed injury in this respect.
e) The applicant has shown positive growth in terms of its production and sales figures, but has shown
negative growth in terms of profitability. As examined above, the decline in growth in terms of the
profitabilit y of the applicant is as a result of the increase in raw material cost.
f) The total sales of the applicant (i.e., the domestic sales + captive sales + export sales) is at the highest
period during the POI.
g) The injury to the domestic industry was non -existent for the period April 2021 – September 2021 (H1),
and was limited to only the period October 2021 – March 2022 (H2). The Authority examined the 6 month
post-POI period of April 2022 to September 2022 and has determined that the injury suffered by the
domes tic industry during H2 was merely an aberration.
h) The domestic sales volume of the domestic industry during the post -POI period has also increased.
i) In the post -POI period, the applicant’s selling price is significantly below the landed value of the subjec t
goods imported from China PR, yet the market share of imports from China PR are higher than the market
share of the domestic industry. Despite selling their goods at prices lower than the imports, the domestic
industry has not been able to capture a larg er share of the growth in demand. The domestic industry has
not been able to afford any plausible explanation for the same.
j) In the post -POI period, the demand for the subject goods has increased, however, the domestic industry
has not been able to capture this increase in demand despite having a lower selling price than the landed
value of the subject imports. During this period, the domestic sales volume of the domestic industry has
also increased.
xii Injury Margin : Since the domestic industry is not being in jured as a result of imports of the subject
goods from China PR, the Authority does not find it necessary to determine the injury margin.
xiii Causal link : It was found that domestic industry has not suffered injury, and the decline in the
performance of the d omestic industry is only restricted to the second half of the POI. This has coincided
with the decline in performance and profitability parameters of the applicant during the very same period.
Therefore, the injury to the domestic industry, if any, during the second half of the POI is as a result of the
increase in raw material prices during this period and not the dumped imports.
xiv Indian industry issues : The Authority notes that the subject good is an active pharmaceutical ingredient,
which is used to manuf acture a drug that has been listed in the ‘National List of Essential Medicines’ by
the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers. Further, Metronidazole
medicine has been subject to several price control orders by the National Pharmaceutical Pricing
Authority of India.
*****
R RECOMMENDATIONS
211. Having examined the contentions of various interested parties and on the basis of above facts, circumstances
and analysis, the Authority concludes that the domestic industry is not sufferi ng material injury due to
imports from the subject country in terms of the provisions enshrined under the Anti -Dumping Rules. In
view of the above, the Authority does not consider it appropriate to recommend levy of anti -dumping duty on
the imports of sub ject goods from the subject country. Therefore, in terms of Section 9A and 9B of the
Customs Tariff Act read with Rule 14(b), Rule 17(1)(a)(ii) and Rule 11(2) of the Anti -Dumping Rules, the
Designated Authority decides to terminate the present investigatio n which was initiated vide Notification
No.F.No.6/3/2022 -DGTR, dated 30th September 2022.
*****
S FURTHER PROCEDURE
212. An appeal against this notification shall lie before the Customs, Excise and Services Tax Appellate Tribunal
in accordance with the Customs Ta riff Act, 1975.
ANANT SWARUP, Designated Authority
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