SSR of ADD on imports of woven fabric having more than 50 percent Flax content known as Flax Fabric from China PR and Hong Kong

REGD. No. D. L.-33004/99 The Gazette of India CG-DL-E-11082025-265348 EXTRAORDINARY PART I-Section 1 PUBLISHED BY AUTHORITY NEW DELHI, FRIDAY, AUGUST 8, 2025/SHRAVANA 17, 1947 MINISTRY OF COMMERCE AND INDUSTRY (Department of Commerce) (DIRECTORATE GENERAL OF TRADE REMEDIES) FINAL FINDING New Delhi, the 8th August, 2025 Case No. ADD (SSR) - 03/2025 Subject: Final finding in the sunset review investigation of anti-dumping duty imposed on imports of woven fabric (having more than 50% Flax content) commonly known as "Flax Fabric" from China PR and Hong Kong F. No. 07/05/2025-DGTR.—Having regard to the Customs Tariff Act 1975, as amended from time to time (hereinafter also referred to 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 also referred to as "Rules"). The Designated Authority (hereinafter referred to as "the Authority") received an application from M/s Grasim Industries Ltd. - Jaya Shree Textiles (hereinafter referred to as the 'applicant' or the 'domestic industry') for sunset review investigation on imports of woven fabric (having more than 50% Flax content) commonly known as "Flax Fabric" (hereinafter referred to as the "subject goods" or the "product under consideration" or the "PUC”), originating in or exported from China PR and Hong Kong (hereinafter referred to as the "subject countries"). A. BACKGROUND OF THE CASE 1. The original anti-dumping investigation concerning imports of product under consideration from China PR and Hong Kong was initiated by the Authority vide Notification No. 14/8/2008- DGAD dated 3rd October, 2008. The Authority notified preliminary finding recommending provisional antidumping duties on 17th February 2009. The provisional duties were imposed vide Customs Notification No. 30/2009-Customs dated 26th March, 2009. The Final Findings Notification was issued by the Authority vide Notification No. 14/08/2008-DGAD dated 1st October, 2009 recommending imposition of definitive antidumping duty. Definitive antidumping duties were imposed vide Customs Notification No. 142/2009- Customs (ADD) dated 21st December, 2009. 2. The Authority initiated first sunset review investigation vide Notification no. 15/30/2013- DGAD dated 10th March 2014. The Authority recommended modification and continuation of anti-dumping duties vide Notification No.15/30/2013-DGAD dated 9th June 2015. The same were imposed vide Notification No. 39/2015-Customs/ dated 12th August, 2015. 3. As imports continued to cause injury to the domestic industry despite existence of duties, M/s Grasim Industries Limited-Jaya Shree Textiles filed an application before the Authority to conduct a review investigation. The Authority initiated a second sunset review investigation vide Notification No. 7/26/2019-DGTR dated 23rd December 2019. The Authority recommended extension and enhancement of duties owing to continued dumping from subject countries on 17th August 2020. Accordingly, anti-dumping duties were extended at revised rates vide Notification No. 35/2020-Customs (ADD) dated 10th November, 2020. 4. The Authority, on the basis of a duly substantiated application filed by the Applicant with sufficient evidence of likelihood of dumping and injury, initiated the sunset review investigation vide Notification No.7/05/2025 DGTR dated 29th March, 2025, in accordance with Section 9A (5) of the Act, read with Rule 23 of the Anti- dumping Rules, to review the need for continued imposition of the antidumping duties in respect of the subject goods, originating in or exported from subject countries, and to examine whether the expiry of the said duty is likely to lead to continuation of dumping and injury to the domestic industry. B. PROCEDURE 5. The procedure described below has been followed with regard to the investigation: i. The Authority issued a notification dated 29th March 2025, published in the Gazette of India - Extraordinary, initiating the sunset review of anti-dumping investigation concerning the imports of the product under consideration from the subject countries. ii. The Authority sent copy of the initiation notification dated 29th March 2025 to the embassies of the subject countries in India, known producers and exporters from the subject countries, known importers/users and other interested parties, as per available information. The interested parties were requested to provide relevant information in the form and manner prescribed in the initiation notification and make their views known in writing within the prescribed time-limit. iii. The Authority provided a copy of the non-confidential version of the application to the known producers/exporters and to the embassies of the subject countries in India in accordance with Rule 6(3) of the Rules. iv. The Authority sent questionnaires to the following known producers/exporters in the subject countries in accordance with Rule 6(4) of the Rules: a. Hunan Huasheng Industrial & Trading Co. Ltd. b. Mengyin Cotton Textile Co. Ltd c. Harbin Chaolong Flax Co. Ltd. d. Binfenzhuang Fabric Co. Ltd. e. Huafang Ramie Textile Co. Ltd f. Zhucheng Deliyuan Textile Co. Ltd. g. Haining Yutex Co. Ltd h. Qingdao Yuzhou Knit and Textile Co. Ltd. i. Wujiang Maishunda Silk Textile Co Ltd. v. None of the exporters filed the response to exporter's questionnaires, nor have they filed any other submissions. Trade and Industry Department (TID) of Hong Kong Special Administrative Region (HKSAR), China, Chamber of Commerce for Import and Export of Textiles (CCCT) registered themselves as interested party, however, have not made any submissions. vi. Questionnaire was sent to the following known importers/users of subject goods in India calling for necessary information in accordance with Rule 6(4) of the Anti-Dumping Rules - i. K. Mohan Textiles, Bangalore, Karnataka ii. Prateek Apparels Pvt. Ltd., Karnataka iii. Ambattur Clothing Co. Ltd, Tamil Nadu iv. Aditya Birla Nuvo Ltd, Karnataka v. Shahi Exports, Pvt. Ltd, Faridabad vi. Richa & Co., New Delhi vii. Mulberry Silk Limited, Karnataka viii. Indian Terrian Clothing Pvt. Ltd, Tamil Nadu ix. Orient Clothing Co. P. Ltd, Haryana x. Mohan Clothing Co (P) Ltd., Haryana xi. Anish India Export, Haryana xii. Gokaldas Images, Karnataka xiii. Prasam Exports, Maharashtra xiv. Raymond Ltd. (Textile division), Mumbai vii. None of the importers or users have filed the response to questionnaires, nor have they filed any other submissions, in response to the Initiation notification. viii. Exporters, foreign producers and other interested parties who have not responded to the Authority, or not supplied information relevant to this investigation, have been treated as non-cooperating interested parties. ix. The Authority issued an economic interest questionnaire (EIQ) to all the known producers and exporters, importers and the domestic industry. The economic interest questionnaire was also shared with the administrative line ministry. Economic interest questionnaire was filed only by the domestic industry. None of the other interested parties have filed the economic interest questionnaire. x. A list of all the interested parties was uploaded on the DGTR website along with the request therein to all of them to email the non-confidential version of their submissions to all the other interested parties. xi. The period of investigation (POI) for the purpose of the present investigation is 1st October 2023 to September 2024 (a period of 12 months). The injury period for the investigation will cover the periods 2021-22, 2022-23, 2023-24 and the POI. xii. A request was made to the Directorate General for Systems and Data Management (DG Systems) for transaction-wise import data of the subject goods for the injury period. The Authority received the data and has relied upon this data for the necessary analysis after due examination of the transactions. xiii. The Authority has examined the information furnished by the domestic industry to the extent possible on the basis of guidelines laid down in Annexure III of the Rules to work out the cost of production and the non-injurious price of the subject goods in India so as to ascertain if anti-dumping duty lower than the dumping margin would be sufficient to remove injury to the domestic industry. xiv. In accordance with Rule 6(6) of the Anti-Dumping Rules, the Authority provided opportunity to the interested parties to present their views orally in a hearing. The public oral hearing was held on 30th June 2025. Domestic industry and representative of Hong Kong Special Administrative Region participated, however, only the representative of domestic industry made submissions. Attendees were requested to file written submissions of the views expressed orally by 6th July 2025 and Rejoinder by 13th July 2025. Only domestic industry has made submissions post oral hearing. xv. A Disclosure Statement containing the essential facts in this investigation was issued to the interested parties on 29th July 2025 and the interested parties were allowed time upto 04th August 2025 to comment on the same. The comments on Disclosure Statement received from the interested parties have been considered, to the extent found relevant, in this Final Findings. xvi. In accordance with Rule 6(8), wherever an interested party has refused access to or has otherwise not provided necessary information during the course of the present investigation, or has significantly impeded the investigation, the Authority has considered such parties as non-cooperative and recorded the findings on the basis of available facts. xvii. Non-injurious price (hereinafter referred to as ‘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 Generally Accepted Accounting Principles (GAAP) and Annexure III to the AD Rules. xviii. In accordance with Rule 8, the Authority, during the course of the investigation, satisfied itself as to the accuracy of the information supplied by the domestic industry which forms the basis of the final finding. The Authority verified the data and documents submitted by the domestic industry to the extent considered relevant, and necessary. xix. '***' in this final finding represents information furnished by domestic industry on confidential basis and so considered by the Authority under the AD Rules. xx. The average exchange rate of 1US$ = Rs. 84.27 prevailing during the POI has been adopted by the Authority. C. PRODUCT UNDER CONSIDATION AND LIKE ARTICLE C.1 Views of the Domestic Industry 6. The domestic industry has made the following submissions with regard to the product under consideration and like article: i. The product under consideration is Flax Fabric having Flax content more than 50% originating in or exported from China PR and Hong Kong. It is normally classified under Chapter 53 of the Customs Tariff Act. ii. "Flax" and "Linen" are synonyms and the word flax is also known as Linen and can be used to produce yam and fabric made from flax fibres. It is often used as in generic term to describe a class of woven bed, bathtub, table and kitchen textiles because traditionally flax was widely used for towels sheets etc. iii. The present investigation being a sunset review investigation, product under consideration remains the same as defined in the previously conducted investigation. iv. No significant development has taken place over the period with regard to product under consideration. v. Product under consideration is made from cellulosic plant called flax, grown in Northem European countries mainly in France and Belgium. These fibres are then converted to linen yarn through wet spinning process, which is unique to any other spinning process. This linen yarn is used as grey or dyed as required for weaving. After weaving it is processed and finished and sold in the market. vi. The product produced by the domestic industry is like article to the product imported from subject countries. C.2 Views of other interested parties 7. No submissions have been made by the exporters/other interested parties with regard to the product under consideration and like article. C.3 Examination by Authority 8. The present investigation is a sunset review investigation and the scope of the product under consideration remains the same as defined in the original investigation. The product under consideration as defined in the last conducted investigation is reproduced hereunder - "The product under consideration is flax fabric originating in or exported from China PR and Hong Kong is normally classified under Chapter 53 of the Customs Tariff Act. "Flax" and " Linen" ore synonyms and the word flax is also known as Linen and can be used as in generic term to describe a class of woven bed, bathtub, table and kitchen textiles because traditionally flax was widely used for towels, sheets etc. This product is classified under Customs Tariff Chapter 53 at subheading 53.09. The Custom classification is indicative only and not binding on the scope of investigation. Woven fabric (having more than 50% flax contents) produced by the domestic industry and those being imported from the subject countries are like articles and is the Product under Consideration within the meaning of the rules. The Authority notes that as per the grade-wise production statement, the domestic industry has produced fabric having flax content of 30-50%. This is 0.62% of the total production. As the domestic industry is not making substantial production of fabric having flax content of up to 50%, the Authority has therefore concluded the product under consideration to have flax content of more than 50%." 9. The other interested parties were asked to provide their comments on the scope of the product under consideration within 15 days of initiation of the investigation. No comments were received from any of the interested parties except the applicant and therefore, the Authority vide Notification dated 23.04.2025 notified that the scope of the product under consideration is same as defined in the initiation notification having regard to the past investigations. It was further clarified that no PCN methodology is being adopted in the present investigation. 10. The product is classifiable under Chapter 53, under sub-heading 5309 of the Customs Tariff Act, 1975. It is also noted that the customs classification is indicative only and in no way binding on the scope of subject investigation. 11. The Authority notes that the subject goods produced by the domestic industry and that imported from the subject countries are comparable in terms of characteristics such as physical & chemical characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution & marketing and tariff classification of the goods. The two are technically and commercially substitutable. Accordingly, the Authority notes that the product produced by the domestic industry are 'like article' to the product under consideration imported from the subject countries in terms of Rule 2(d) of the Rules and the scope of product under consideration remains the same as defined in the original investigation. 12. Further, none of the importers, exporters and other interested parties have advanced any argument with regard to the scope of the product under consideration and like article. Thus, the scope of the product under consideration in the present review investigation remains the same as that in the original investigation. D. SCOPE OF DOMESTIC INDUSTRY AND STANDING D.1 Views of Domestic Industry 13. Following submissions have been made by the domestic industry with regard to standing and scope of domestic industry: a. The present application has been filed by M/s Grasim Industries Limited - Jaya Shree Textiles. At the time of filing the application, the applicant was supported by five producers of the product under consideration. Post oral hearing, fifteen other producers have expressed support for the application. Therefore, the following producers have supported the said application: i. Global Images (India) Pvt. Ltd., ii. Govardhan Overseas Pvt. Ltd., iii. Jagdamba Textiles Private Limited, iv. Raymond Luxury Cottons Ltd., v. Sachdeva Fabric World Pvt. Ltd. vi. Bhavna Fabrics vii. Lee Weaving viii. Madhusudan Weaves have. ix. Mayank Textiles x. Raghav Enterprises xi. Shree Balaji Silk xii. Shree Jay Ambe Silk xiii. Shree Krishna Silk xiv. Shree Ram Silk xv. Sudamo Impex Pvt. Ltd. xvi. Sisai Fibres Pvt. Ltd. xvii. Kottex Industries Pvt. Ltd. xviii. Darshan Creation Private Limited. xix. Keshari Industries Private Limited xx. Vrijesh Natural Fibre and Fabric India Pvt. Ltd. xxi. AK Fabrics xxii. Viraat Fashion b. There are a number of producers of the product under consideration in India. The Designated Authority, in the last investigation, held that production of the subject goods is widespread in the MSME sector, making it infeasible to aggregate data from all units. c. Additionally, since a weaver can produce different kinds of fabrics, including flax, many producers engaged in cotton fabric production also manufacture small volumes of flax fabric. Accordingly, the most appropriate method to quantify Indian production-consistent with past practice is to rely on raw material consumption. d. The domestic industry has, following the past practice, relied on raw material consumption to estimate total Indian production. The applicant's production represents a “major proportion" of total Indian production e. The Applicant constitutes a major proportion of Indian production. The Applicant has not imported the subject goods from the subject countries nor is related to any exporters or producers in the subject countries. Therefore, the Applicant satisfied the standing requirement under the Rules and the Applicant constitutes "Domestic Industry". f. Standing is not a mandatory requirement in a sunset review. The 25% and 50% condition that the DGTR requires is under Rule 5 and not covered under Rule 23. D.2 Views of the other interested parties 14. No submissions have been made by the exporters/other interested parties with regard to with regard to standing and scope of domestic industry. D.3 Examination by the Authority 15. Rule 2(b) of the Rules defines domestic industry as under: "(b) "domestic industry" means the domestic producers as a whole engaged in the 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 exporters or importers of the alleged dumped article or are themselves importers thereof in such case the term 'domestic industry' may be construed as referring to the rest of the producers". 16. The Authority notes the present application has been filed by M/s Grasim Industries Limited – Jaya Shree Textiles. The related party of the applicant has imported insignificant quantity of the subject goods from the subject countries. 17. It is noted that production of product under consideration in the country is quite dispersed, including within the MSME sector. There is no published data regarding gross domestic production of the product in the country. The issue was considered in the original findings and previous sunset review investigations as well. It was held that due to lack of reliable information and production being in unorganised sector, the production of product under consideration is required to be assessed on the basis of raw material consumption. The applicant has followed the same methodology in the present case to determine Indian production and share of Domestic Industry. 18. The Authority had duly called upon all interested parties to furnish relevant information However, none of the other interested parties came forward to contest or rebut the submissions made by the domestic industry. Accordingly, in consonance with the previous investigation in the case and in accordance with Rule 6(8) of the Anti-Dumping Rules, the Authority has treated the data submitted by the domestic industry as the best facts available. Owing to the non-availability of publicly verifiable production data, the Authority has adopted the established methodology and has estimated the production of the product under consideration based on raw material consumption as declared by the Applicant. It is noted that the Applicant's production accounts for 25.73% of the domestic production. The Authority further records that, in terms of Rule 23 governing sunset reviews, the requirement of establishing domestic industry standing as per Rule 5(3) is not mandated for a review. 19. The application has been supported by following producers: i. Global Images (India) Pvt. Ltd., ii. Govardhan Overseas Pvt. Ltd., iii. Jagdamba Textiles Private Limited, iv. Raymond Luxury Cottons Ltd., v. Sachdeva Fabric World Pvt. Ltd. vi. Bhavna Fabrics vii. Lee Weaving viii. Madhusudan Weaves have. ix. Mayank Textiles x. Raghav Enterprises xi. Shree Balaji Silk xii. Shree Jay Ambe Silk xiii. Shree Krishna Silk xiv. Shree Ram Silk xv. Sudamo Impex Pvt. Ltd. xvi. Sisai Fibres Pvt. Ltd. xvii. Kottex Industries Pvt. Ltd. xviii. Darshan Creation Private Limited xix. Keshari Industries Private Limited xx. Vrijesh Natural Fibre and Fabric India Pvt. Ltd. xxi. AK Fabrics xxii. Viraat Fashion 20. M/s Raymond Luxury Cottons Ltd., which is a producer in the organised sector has also submitted its injury information post oral hearing. It is noted that the production by the applicant constitutes a major proportion. Further, M/s Raymond Luxury Cottons Ltd has provided only injury information, however, without detailed costing information. E. DETERMINATION OF NORMAL VALUE, EXPORT PRICE AND DUMPING MARGIN E.1 Normal Value 21. Under Section 9A (1)(c), normal value in relation to an article means: i. The comparable price, in the ordinary course of trade, for the like article, when meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section (6), or ii. When there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either :- a. comparable representative price of the like article when exported from the exporting country or territory or an appropriate third country ds determined in accordance with the rules made under sub- section (6); or b. the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section (6); Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely trans-shipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin. E.2 Submissions by the domestic industry 22. The submissions made by the domestic industry with regard to normal value, export price and dumping margin are as follows - a. The subject countries have continued to dump subject goods in India despite existing anti-dumping duties. b. Even though the provisions of Article 15(a)(ii) have expired, WTO members are required to consider domestic prices or costs in China PR only if the producers under investigation can clearly show that the market economy conditions prevail in the industry producing the like product with regard to manufacture, production and sale of that product as per Article 15(a)(i), which the Chinese producers in the present case have not shown. c. No verifiable evidence of the actual selling price of cost in a market economy third country is available for determining the normal value for China PR. d. None of the exporters have responded to the questionnaire issued by the Authority. The normal value should be determined as per Para 7 of the Annexure I of the ADD Rules. Furthermore, exporters should be considered non-cooperative as per Rule 6(8) and the Authority should proceed according to the best information available. e. There is no significant difference in the technology adopted or the manufacturing process used for producing the subject goods or raw material prices in subject countries, therefore the calculations are justified. f. In view of the above the Applicant has determined Normal Value in China on the basis of cost of production in India, based on the cost of the domestic industry duly adjusted with selling, general and administrative expenses. g. Since there is no evidence available with regard to the selling price of the product under consideration in Hong Kong, therefore the Applicant has determined normal value in Hong Kong on the basis of cost of production in India, after due adjustments. h. The export price is adjusted on account of ocean freight, marine insurance, commission, inland freight, port expenses, bank charges, secondary packaging, credit costs and inventory carrying costs. i. The dumping margin calculated is not only significant, but also substantial. E.3 Submissions by other interested parties 23. No submissions have been made by the exporters/other interested parties with regard to normal value, export price and dumping margin. E.4 Examination by the Authority Market economy status for Chinese Producers 24. Article 15 of China's Accession Protocol in 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 can 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 WO Member shall use Chinese prices or costs for the industry under investigation 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 conditions 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 account 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 accordance 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 provided 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 non-market economy provisions of subparagraph (a) shall no longer apply to that industry or sector." 25. It is noted that while, the provision contained in Article 15 (a) (ii) have expired on 11.12.2016, the provision under Article 2.2.1.1 of WTO read with obligation under 15 (a)(i) of the Accession protocol require criterion stipulated in para 8 of the Annexure I of the India's Rules to be satisfied through the information/data to be provided in the supplementary questionnaire on claiming the market economy status. As none of the producers from China PR has not participated, the normal value has been determined in accordance with para 7 of Annexure I of the Rules. E.4 Determination of Normal Value for all Producers in China PR 26. At the stage of initiation, the Authority constructed the normal value for China PR based on the best estimates of the cost of the production of the domestic industry after duly adjusting the selling, general and administrative expenses and profits. Upon initiation, the Authority advised the producers/ exporters in China PR to respond to the notice of initiation and provide information relevant to determination of their market economy status. The Authority sent copies of the supplementary questionnaire to all the known producers/ exporters for rebutting presumption of non-market economy in accordance with criteria laid down in Para 8(3) of Annexure-I to the Rules and furnish relevant detailed information. The Authority also requested Government of China PR to advise the producers/ exporters in China PR to provide the relevant information. However, none of the producers/exporters have responded. 27. Para 7 of Annexure 1 of the Rules provides as under "In case of imports from non-market economy countries, normal value shall be determined on the basis of the price or constructed value in the market economy third country, or the price 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 reasonable 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 investigation shall be informed without any unreasonable delay the aforesaid selection of the market economy third country and be given a reasonable period of time to offer their comments." 28. Para 7 lays down a hierarchy for determination of normal value and provides that normal value shall be determined on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other country, including India, or where it is not possible, 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 reasonable profit margin. Thus, the Authority notes that the normal value is required to be determined having regard to the various sequential alternatives provided under Annexure 7. 29. There is no evidence of price or constructed value prevailing in market economy third country brought forward by any interested party. Thus, normal value could not be determined based on price prevailing in market economy third country. Further, the subject goods are being imported into India largely from the subject countries, thus imports into India by other countries could not be considered. Thus, normal value could not be determined based on price prevailing in market economy third country. In the absence of sufficient information on record, regarding the other methods as enshrined in Para 7 of Annexure I of the Rules, the Authority has determined the normal value by considering the method on "any other reasonable basis". The Authority has, therefore, constructed the normal value for China PR on the basis of cost of production in India, duly adjusted, including selling, general and administrative expenses and addition of reasonable profits. The constructed normal value so determined for POI by the Authority is mentioned in the dumping margin table below. E.6 Determination of Normal Value for Hong Kong 30. Since none of the producers and exporters in Hong Kong have responded to the questionnaire in the form and manner prescribed, nor have submitted any evidence with regard to the Normal Value of the subject good in the subject country, the Authority is constrained to determine the normal value in this country on the basis of the facts available. Additionally, there is no evidence regarding the selling price of the product under consideration in Hong Kong. Normal value for Hong Kong is thus based on the cost of production in India, after due adjustments. The normal value so determined for Hong Kong is mentioned in the dumping margin table below. E.7 Determination of Export Price 31. As none of the producers/exporters in the subject countries have cooperated, the Authority has adopted the DG Systems Data for determining the CIF price. The export price has been determined based on weighted average import price into India. 32. Price adjustments have been made on the basis of claims made by the Applicant in view of non-cooperation from exporters from China PR and Hong Kong. The export price has been determined at ex-factory level, after considering adjustments on account of ocean freight, marine insurance, commission, bank commission, inland freight expenses, port expenses. E.8 Determination of dumping margin for producers and exporters in the subject countries 33. Considering the normal value and export price as above, the dumping margins for all producers/exporters of the subject goods from the subject countries are determined as below. It is seen that the dumping margin continues to be more than de minimis and significant. Dumping Margin : +-------------------+---------+-----------+-----------+ | Particulars | Unit | China PR | Hong Kong | +===================+=========+===========+===========+ | Normal Value | $/Mtr | *** | *** | +-------------------+---------+-----------+-----------+ | Net Export Price | $/Mtr | *** | *** | +-------------------+---------+-----------+-----------+ | Dumping Margin | $/Mtr | *** | *** | +-------------------+---------+-----------+-----------+ | Dumping Margin | % | *** | *** | +-------------------+---------+-----------+-----------+ | Dumping Margin | Range | 110-120 | 40-50 | +-------------------+---------+-----------+-----------+ F. ASSESSMENT OF INJURY AND CAUSAL LINK 34. Rule 11 of the Rules read with Annexure II provides that an injury determination shall involve examination of factors that may indicate injury to the domestic industry, ".. taking into account all relevant 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 articles...". In considering the effect of the dumped imports 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. 35. Rule 23 of the Rules provides that the provisions of Rule 6,7,8,9, 10, 11, 16, 18, 19 and 20 shall apply mutatis mutandis in case of a review. In case the performance of the domestic industry shows that it has not suffered injury during the current injury period, the Authority shall determine whether cessation of the present duty is likely to lead to continuation of injury to the domestic industry. 36. The Authority notes that the application for imposition of antidumping duty has been filed by M/s Grasim Industries Limited-Jaya Shree Textiles and supported by many supporters as stated in relevant para earlier. In terms of Rule 2(b) of the Rules, the Applicant has been treated as the domestic industry for the purpose of this investigation. Therefore, for the purpose of this determination the cost and injury information of the Applicant has been examined. F.1 Submissions by the Domestic Industry 37. The submissions of the domestic industry with regard to injury and causal link are reproduced herein below: a. Imports from subject countries have increased significantly throughout the injury period. b. Subject imports in relation to Indian consumption has doubled over the injury period. c. Subject imports in relation to Indian production has increased significantly from base year to the POI. d. Despite duties, subject imports are undercutting domestic selling prices. If existing ADD is removed, price undercutting could substantially increase further. e. Similarly, subject imports are also substantially undercutting domestic cost of sales despite existing duties. If ADD is removed, cost undercutting is substantially more. f. Increase in cost of sales has been much more than increase in selling price. In the POI, selling price was below cost of sales. Landed price of subject imports were significantly below both cost and selling price of domestic industry, causing price suppression. g. With increase in demand, the domestic industry has increased production and capacity utilisation. However, to compete with dumped imports and to maintain its market share, domestic industry is selling at losses. h. Despite consistent capacity, increase in demand of subject goods and increased production, market share of domestic industry has declined whereas that of subject imports have significantly increased. i. Due to sustained adverse volume and price effect, domestic industry's economic performance has been adversely affected. j. Domestic industry is facing significant and continuous losses despite existence of duties. k. PBIT, Cash profit and ROCE has turned negative, declining substantially over the injury period. l. The extent of losses has increased by 87% over the injury period. ROCE has dropped further from 13% to 25% over the injury period. m. During the injury period, there was unprecedented increase in prices of flax fibre. Resultantly, although cost increased, Chinese producers did not increase their prices proportionately. Accordingly, domestic producers had to sell below cost to maintain their market share despite such high increase in input price, leading to more losses. n. Inventories with the domestic industry has remained significant throughout injury period, with inventories increasing significantly in the POI when subject imports were at an all-time high. o. There has been positive and continued dumping by subject countries in the previous investigations as well. In the present investigation, dumping margin and injury margin has further increased. p. Dumping margin and injury margin in the present investigation is higher than margins determined by the Authority in the previous two sunset review investigations. q. Producers in subject countries have been absorbing the duties. Therefore, in the last investigation, duties were enhanced by the Authority, however, dumping has intensified. r. The volume of imports is at an all-time high in the POI period. This is despite duties being enhanced in the last sunset review investigation. s. Since original investigation benchmark duty, the increase in import price has been of only approx. 80 rupees. Cost of sales, however, has increased many times over. t. While cost of sales has increased by *** % over the injury period, the increase in landed value of imports has been only 8% during the same period. Imports are much below cost, even with addition of existing duties. u. The domestic industry is suffering unprecedented losses. Comparing ROCE in original investigation which was at *** %, ROCE in present investigation stands at -*** %. v. The law does not mention an upper limit on the number of years of protection. There are 263 cases, wherein duties have been in effect for 15-20 years and 207 wherein duties have been imposed for 20-25 years. DGTR has imposed duties since 1997 in acrylic fibre from Thailand and acrylonitrile butadiene rubber from Korea. w. It has been the consistent practice of Authority to include imports under advance authorisation or similar schemes in injury analysis. Such imports denote the price at which subject goods would be imported in absence of measures. Further, such imports create competition and change the price line, thereby benchmark the prices in the domestic market. Thus, these imports have been considered by Authority to determine dumping and injury margin as these dumped imports adversely affect the opportunities available to domestic industry to increase their supplies to these exporters and to that extent, the demand of the subject goods declines. Additionally, license holder has the choice to either import the input on duty free basis or procure the same from indigenous source by the mechanism of advance release order. Non-inclusion of advance authorisation volume would distort injury analysis x. Majority of producers of subject goods are centred in the MSME sector, with a few major players. If duties are ceased, MSME sector would collapse and organised sector would suffer immensely. F.2 Submissions by other interested parties 38. No submissions have been made by the exporters/other interested parties with regard to injury or causal link. F.3 Examination by the Authority 39. The present investigation is a sunset review of anti-dumping duties in force. Rule 23 provides that provisions of Rule 11 shall apply, mutatis mutandis in case of a review as well. The Authority has, therefore, determined injury to the domestic industry reconsidering, mutatis mutandis, the provisions of Rule 11 read with Annexure II. Rule 11 of the Rules read with Annexure II provides that an injury determination shall involve examination of factors that may indicate injury to the domestic industry, "...taking into account all relevant 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 articles ....". In considering the effect of the dumped imports 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 e to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree. 40. As regards the consequent impact of dumped imports on the domestic industry, Para (iv) of Annexure II of the Rules states as under- "(iv) The examination of the impact of the dumped imports on the domestic industry concerned, shall include an evaluation of all relevant economic factors and indices having a bearing on the state of the industry, including natural and potential decline in sales, profits, output, market share, productivity, return on investments or utilization of capacity; factors affecting domestic prices, the magnitude of the margin of dumping, actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital investments. " 41. For the purpose of current injury analysis, the Authority has examined the volume and price effects of dumped imports of the subject goods on the domestic industry and its effect on the prices and profitability to examine the existence of injury and causal links between the dumping and injury, if any. The Authority has taken note of the various submissions made by domestic industry and has examined the injury to the domestic industry in accordance with the Rules. F3.1 ASSESSMENT OF DEMAND 42. For the purpose of assessment of the domestic consumption/demand of the subject goods, the sales volume of the domestic industry and other Indian producers have been added to the total imports into India and the same have been summarized below. +----------------------------+-----------+---------+---------+---------+-----+ | Particulars | Unit | 2021-22 | 2022-23 | 2023-24 | POI | +============================+===========+=========+=========+=========+=====+ | Sales of Domestic Industry | 000'Mtr | *** | *** | *** | *** | | | Index | 100 | 109 | 106 | 103 | +----------------------------+-----------+---------+---------+---------+-----+ | Sales of other Indian | 000'Mtr | *** | *** | *** | *** | | producers | Index | 100 | 109 | 106 | 103 | +----------------------------+-----------+---------+---------+---------+-----+ | Imports from China PR | 000'Mtr | 10,641 | 11,531 | 15,945 | 16,112 | +----------------------------+-----------+---------+---------+---------+-----+ | Imports from Hong Kong | 000'Mtr | 78 | 1 | 89 | 98 | +----------------------------+-----------+---------+---------+---------+-----+ | Imports from Other | 000'Mtr | 582 | 894 | 1,248 | 1,333 | | Countries | | | | | | +----------------------------+-----------+---------+---------+---------+-----+ | Total Demand/Consumption | 000'Mtr | *** | *** | *** | *** | | | Index | 100 | 109 | 117 | 116 | +----------------------------+-----------+---------+---------+---------+-----+ 43. It is noted that the demand for the product under consideration has consistently increased over the injury period. F.3.2 VOLUME EFFECTS OF DUMPED IMPORTS i. Import volume and share of the imports from the subject countries 44. With regard to the volume of 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. In the present case, however, ADD has been in force. The volume of imports of the subject goods from the subject countries have been analyzed as under: +----------------------------+-----------+---------+---------+---------+---------+ | Particulars | Unit | 2021-22 | 2022-23 | 2023-24 | POI | +============================+===========+=========+=========+=========+=========+ | Import Volume | | | | | | +----------------------------+-----------+---------+---------+---------+---------+ | Subject countries | 000'Mtr. | 10,718 | 11,531 | 16,034 | 16,210 | +----------------------------+-----------+---------+---------+---------+---------+ | i. China PR | 000'Mtr | 10,641 | 11,531 | 15,945 | 16,112 | +----------------------------+-----------+---------+---------+---------+---------+ | ii.Hong Kong | 000'Mtr | 78 | 1 | 89 | 98 | +----------------------------+-----------+---------+---------+---------+---------+ | iii. Other countries | 000'Mtr | 582 | 894 | 1,248 | 1,333 | +----------------------------+-----------+---------+---------+---------+---------+ | Total Imports | 000'Mtr | 11,300 | 12,425 | 17,282 | 17,543 | +----------------------------+-----------+---------+---------+---------+---------+ | Subject imports in | | | | | | | relation to: | | | | | | +----------------------------+-----------+---------+---------+---------+---------+ | Indian production | % | *** | *** | *** | *** | +----------------------------+-----------+---------+---------+---------+---------+ | Indian consumption | % | *** | *** | *** | *** | +----------------------------+-----------+---------+---------+---------+---------+ 45. It is seen that: i. Volume of imports from subject countries constitute more than 95% of total imports of the subject goods into India. ii. Volume of imports from China consistently increased with significant increase in 2023-24 and the POΙ. However, imports from Hongkong have remained at low level. iii. Subject imports in relation to Indian production has doubled in the POI, in comparison to the base year. iv. Similarly, imports in relation to Indian consumption has also increased over the injury period. v. The increase in the volume of subject imports has been far higher than the increase in demand in the country. 46. It is also noted that significant imports are being made under advance license. Consistent with past practice and jurisprudence, the Authority considers that imports made under duty exemption schemes, including advance licenses, have a bearing on the domestic industry's performance and thus should be included in the injury and dumping assessment. F.3.3 PRICE EFFECTS OF DUMPED IMPORTS 47. With regard to the effect of the dumped imports on prices, the Designated Authority is required to consider whether there has been a significant price undercutting by the dumped imports as compared with the price of the like products 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. The impact on the prices of the domestic industry on account of the dumped imports from the subject countries has been examined with reference to the price undercutting, price suppression and price depression, if any. For the purpose of this analysis, the cost of production, net sales realisation and non-injurious price of the domestic industry have been compared with the landed cost of imports from the subject countries. i. Price undercutting 48. In order to determine whether the imports are undercutting the prices, the Authority has undertaken comparison between the landed price of the product and the average selling price of the domestic industry. The landed price of imports, domestic prices and margin of undercutting are shown as per the table below: +-----------------------------+--------------+-------------------+-----------+-----------+ | Particulars | Unit | Subject Countries | China PR | Hongkong | +=============================+==============+===================+===========+===========+ | Import Volume | 000' Mtr. | 16,210 | 16,112 | 98 | +-----------------------------+--------------+-------------------+-----------+-----------+ | Landed Price (Without ADD) | Rs/Mtr. | 275 | 274 | 394 | +-----------------------------+--------------+-------------------+-----------+-----------+ | Landed Price (With ADD) | Rs/Mtr. | 473 | 473 | 490 | +-----------------------------+--------------+-------------------+-----------+-----------+ | Net Sales Realisation | Rs/Mtr. | *** | *** | *** | | | Rs/Mtr. | *** | *** | *** | +-----------------------------+--------------+-------------------+-----------+-----------+ | Price Undercutting | % | *** | *** | *** | | (Without ADD) | Rs/Mtr. | *** | *** | *** | +-----------------------------+--------------+-------------------+-----------+-----------+ | Price Undercutting (With | % | *** | *** | *** | | ADD) | | | | | +-----------------------------+--------------+-------------------+-----------+-----------+ 49. It is seen that landed price of imports from subject countries are below net sales realisation of the domestic industry, showing positive price undercutting. Further, even with addition of existing anti-dumping duties, price undercutting is positive and significant. ii. Price Suppression 50. In order to determine whether the effect of imports is to suppress prices to a significant degree or prevent price increases which otherwise would have occurred, the Authority has examined the changes in the landed price of imports, and cost of production & selling price of the domestic industry over the injury period. +-------------------------------------+-----------+---------+---------+---------+-----+ | Particulars | Unit | 2021-22 | 2022-23 | 2023-24 | POI | +=====================================+===========+=========+=========+=========+=====+ | Cost of Production | Rs/Mtr. | *** | *** | *** | *** | | | Trend | 100 | 131 | 151 | 175 | +-------------------------------------+-----------+---------+---------+---------+-----+ | Selling Price | Rs/Mtr. | *** | *** | *** | *** | | | Trend | 100 | 140 | 154 | 173 | +-------------------------------------+-----------+---------+---------+---------+-----+ | Landed Price-Subject countries | Rs/Mtr. | *** | *** | *** | *** | | (without ADD) | Trend | 100 | 116 | 125 | 132 | +-------------------------------------+-----------+---------+---------+---------+-----+ | Landed Price- Subject countries | Rs/Mtr. | *** | *** | *** | *** | | (with ADD) | Trend | 100 | 112 | 119 | 123 | +-------------------------------------+-----------+---------+---------+---------+-----+ 51. It is seen that the cost of production and selling price of the domestic industry increased over the injury period. However, the selling price has remained below the level of cost of production throughout the injury period. It is also noted that the landed price of the imports was below the cost of production throughout the injury period. Infact the landed price of imports has declined further in 2023-24 and the POI when cost has increased significantly. Resultantly, the domestic industry is unable to increase its selling price in proportion to increase in the cost of production. Thus, subject imports are suppressing the prices of the domestic industry in the market resulting into financial losses. F.3.4 IMPACT OF DUMPED IMPORTS ON ECONOMIC PARAMETERS OF THE DOMESTIC INDUSTRY 52. Annexure - II to the Anti-Dumping Rules requires that the determination of injury shall involve an objective examination of the consequent impact of these imports on domestic producers of such products. The Anti- Dumping Rules further provide that the examination of the impact of the dumped imports on the domestic industry should include an objective evaluation of all relevant economic factors and indices having a bearing on the state of the industry, including actual and potential decline in sales, profits, output, market share, productivity, return on investments or utilization of capacity; factors affecting domestic prices, the magnitude of the margin of dumping; actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital investments. The various injury parameters relating to the domestic industry are discussed herein below. i. Production, capacity, capacity utilisation and sales volume 53. The performance of the domestic industry with regard to production, domestic sales, capacity and capacity utilisation is as follows - +---------------------+----------+---------+---------+---------+-----+ | Particulars | Unit | 2021-22 | 2022-23 | 2023-24 | POI | +=====================+==========+=========+=========+=========+=====+ | Capacity | Mtr | *** | *** | *** | *** | | | Index | 100 | 100 | 100 | 100 | +---------------------+----------+---------+---------+---------+-----+ | Production | Mtr | *** | *** | *** | *** | | | Index | 100 | 100 | 103 | 103 | +---------------------+----------+---------+---------+---------+-----+ | Capacity Utilization| % | 91% | 92% | 94% | 94% | | | Index | 100 | 100 | 103 | 103 | +---------------------+----------+---------+---------+---------+-----+ | Domestic Sales | Mtr | *** | *** | *** | *** | | | Index | 100 | 109 | 106 | 103 | +---------------------+----------+---------+---------+---------+-----+ | Export Sales | Mtr | *** | *** | *** | *** | | | Index | 100 | 85 | 160 | 258 | +---------------------+----------+---------+---------+---------+-----+ 54. It is seen that - i. Capacity with domestic industry has remained constant throughout the injury period. ii. Production and capacity utilisation has increased over the injury period. iii. Sales of domestic industry increased in 2022-23 from base year and declined thereafter, including in the POI, despite increase in demand. ii. Market share in demand 55. The market share of the domestic industry and domestic producers over the injury period is as under: +----------------------------+-------+---------+---------+---------+-----+ | Particulars | Unit | 2021-22 | 2022-23 | 2023-24 | POI | +============================+=======+=========+=========+=========+=====+ | Domestic industry | % | *** | *** | *** | *** | | | Index | 100 | 98 | 87 | 83 | +----------------------------+-------+---------+---------+---------+-----+ | Other domestic producers | % | *** | *** | *** | *** | | | Index | 100 | 99 | 86 | 83 | +----------------------------+-------+---------+---------+---------+-----+ | Imports from subject | % | 17 | 18 | 28 | 28 | | countries | Index | 100 | 103 | 161 | 165 | +----------------------------+-------+---------+---------+---------+-----+ | Other countries | % | 1 | 1 | 2 | 4 | | | Index | 100 | 158 | 198 | 464 | +----------------------------+-------+---------+---------+---------+-----+ 56. It is noted that the market share of domestic industry declined over the injury period whereas that of subject countries has significantly increased throughout the injury period. The market share of other Indian producers have also declined significantly. Subject imports hold significant share of the domestic demand. iii. Profit or loss, cash profits and return on investment 57. Profit/loss, cash profits and return on investment of the domestic industry are as follows: +-----------------------------+-----------+---------+---------+---------+-----+ | Particulars | Unit | 2021-22 | 2022-23 | 2023-24 | POI | +=============================+===========+=========+=========+=========+=====+ | Cost of production | ₹/Mtr | *** | *** | *** | *** | | | Index | 100 | 131 | 151 | 175 | +-----------------------------+-----------+---------+---------+---------+-----+ | Selling Price | ₹/Mtr | *** | *** | *** | *** | | | Index | 100 | 140 | 154 | 173 | +-----------------------------+-----------+---------+---------+---------+-----+ | PBT | ₹/Mtr | *** | *** | *** | *** | | | Index | -100 | -22 | -119 | -187 | +-----------------------------+-----------+---------+---------+---------+-----+ | PBIT (Profit before | ₹ Lacs | *** | *** | *** | *** | | Interest & Tax) | Index | -100 | -18 | -127 | -229 | +-----------------------------+-----------+---------+---------+---------+-----+ | Cash Profit | ₹/Mtr | *** | *** | *** | *** | | | Index | -100 | 126 | -139 | -267 | +-----------------------------+-----------+---------+---------+---------+-----+ | Cash Profit | ₹ Lacs | *** | *** | *** | *** | | | Index | -100 | 128 | -146 | -278 | +-----------------------------+-----------+---------+---------+---------+-----+ | ROCE | % | *** | *** | *** | *** | | | Index | -100 | -17 | -110 | -192 | +-----------------------------+-----------+---------+---------+---------+-----+ 58. The Authority notes as follows: i. The cost of sales and selling price increased throughout the injury period. However, the domestic industry was forced to keep its selling price below the level of cost of sales in view of significantly dumped imports. ii. PBT was negative in the base year, which although improved in 2022-23, but declined further in 2023- 24 till the POI. iii. Cash profit and ROI followed the same trend as that of profits. The domestic industry is garnering negative return on investments during period of investigation. iv. Inventories 59. The data relating to inventories of the subject goods is as follows: +------------------+-----------+---------+---------+---------+-----+ | Particulars | Unit | 2021-22 | 2022-23 | 2023-2024 | POI | +==================+===========+=========+=========+===========+=====+ | Opening Inventory| 000 Mtr | *** | *** | *** | *** | +------------------+-----------+---------+---------+---------+-----+ | Closing Inventory| 000 Mtr | *** | *** | *** | *** | +------------------+-----------+---------+---------+---------+-----+ | Average Inventory| 000 Mtr | *** | *** | *** | *** | | | Index | 100 | 99 | 84 | 93 | +------------------+-----------+---------+---------+---------+-----+ 60. It is seen that inventories with the domestic industry decreased from base year to 2023-24 but increased again in the POI. The average inventory with the domestic industry is significant. v. Employment, wages and productivity 61. The situation of the domestic industry with regard to employment, wages and productivity is as under: +------------------------+---------+---------+---------+---------+-----+ | Particulars | Unit | 2021-22 | 2022-23 | 2023-24 | POI | +========================+=========+=========+=========+=========+=====+ | No. of employees | Nos. | *** | *** | *** | *** | | | Index | 100 | 103 | 109 | 111 | +------------------------+---------+---------+---------+---------+-----+ | Salaries & Wages | ₹ Lacs | *** | *** | *** | *** | | | Index | 100 | 114 | 126 | 123 | +------------------------+---------+---------+---------+---------+-----+ | Productivity/ Employee | MT | *** | *** | *** | *** | | | Index | 100 | 98 | 95 | 93 | +------------------------+---------+---------+---------+---------+-----+ 62. It is noted that employment levels of domestic industry have increased throughout the injury period. Wages paid have also increased following the same trend as that of employment levels. However, productivity per employee has declined. vi.Growth year to year basis 63. Growth year on year are as follows - +--------------------+------+---------+---------+---------+---------+ | Particulars | Unit | 2021-22 | 2022-23 | 2023-24 | POI | +====================+======+=========+=========+=========+=========+ | Production | % | - | 0.94% | 2.21% | -0.29% | +--------------------+------+---------+---------+---------+---------+ | Domestic Sales | % | - | 9.2% | -3.3% | -2.7% | +--------------------+------+---------+---------+---------+---------+ | Capacity Utilisation| % | - | 0.3% | 3.1% | -0.1% | +--------------------+------+---------+---------+---------+---------+ | Profit/Loss | % | - | 77.9% | -436.0% | -57.6% | +--------------------+------+---------+---------+---------+---------+ | Cash Profit | % | - | 128.2% | -617.8% | -90.6% | +--------------------+------+---------+---------+---------+---------+ | PBIT | % | - | 82.1% | -608.2% | -55.1% | +--------------------+------+---------+---------+---------+---------+ | ROCE | % | - | 82.9% | -540% | -74.6% | +--------------------+------+---------+---------+---------+---------+ 64. It is noted that there is positive growth in terms of production and capacity utilisation, the growth in terms of terms of profits, cash profits, PBIT and ROCE is negative. vii. Margin of dumping 65. It is seen that the margin of dumping is positive from subject countries. The Authority notes that there is continued dumping of subject goods from subject countries. viii. Factors affecting prices 66. The import prices are directly affecting the prices of the domestic industry in the market. It is noted that the landed value of the subject goods from subject countries are not only below its net selling price but also below the level of cost of production. Further the landed prices of subject imports have been suppressing the prices of the domestic industry leading to significant decline in profitability and financial losses during POI. Thus, Authority holds that the principal factor affecting the domestic prices is the dumped imports of subject goods from the subject countries. ix.Ability to raise capital investments 67. The domestic industry is suffering financial losses in the period of investigation. With the competition being faced by the domestic industry because of the dumped imports, the operations of the industry have been impacted which has affected its ability to raise capital investment. The domestic industry is a multi-product company and therefore ability to raise capital investment is not governed based on the performance of the product alone. G.NON-ATTRIBUTION ANALYSIS 68. As per the Rules, the Authority is required to, inter alia, examine any known factors other than dumped imports which are injuring or are likely to cause injury to the domestic industry, so that the injury caused by these other factors may not be attributed to the dumped imports. While the present investigation is a sunset review investigation and causal link has already been examined in original investigation, the Authority examined whether other known listed factors have caused or are likely to cause injury to the domestic industry. It was examined whether other factors listed under the Rules could have contributed or likely to contribute to the injury suffered by the domestic industry. a. Volume and price of imports from third countries 69. The Authority notes that imports from other countries other than subject countries are insignificant or the imports have been at high prices. Therefore, imports from third countries cannot be the reason for the injury suffered by the domestic industry. b. Contraction in demand and/or change in pattern of consumption 70. The demand for product under consideration has increased over the injury period. c. Trade restrictive practices 71. The import of the subject goods is not restricted in any manner and the same are freely importable in the country. No evidence has been submitted by any interested parties to suggest that the conditions of competition between the foreign and the domestic producers have undergone any change. d. Development of technology 72. The Authority notes that information on record shows that technology for production of the product has not undergone any change. e. Export performance 73. The Authority has considered the data for domestic operations only for its injury analysis. In any case, there have been an increase in exports made by the domestic industry during the POI. f. Changes in pattern of consumption 74. The subject goods produced by the domestic industry and that imported into India are comparable and the end users find these goods interchangeable. Possible changes in pattern of consumption are not a factor that could have caused claimed injury to the domestic industry. g. Productivity of the domestic industry 75. Productivity per employee as assessed has not shown any significant changes during the injury period. Thus, the Authority notes that deterioration in productivity as such has not been any cause of injury to the domestic industry. h. Factors affecting causal link: 1. The following parameters establishes causal link between imports from China PR and likelihood of injury to the domestic industry in the event of cessation of duty: i. Imports are undercutting the domestic prices even after existing duties. This resulted in increase in imports from China PR to an all-time high despite duties in place. ii. As the market share of the subject imports increased, market share of the domestic industry declined. iii. Whereas both the cost of sales and selling price increased, the increase in selling price was lower than the increase in cost of sales. The price suppression resulted in significant decline in performance of the domestic industry in respect of profits, cash profits and return of investments. iv. The capacity of the Domestic Industry has remained same over the injury period. The production and sales of the domestic industry has also increased over the injury period. However, in an effort to maintain its market share, the domestic industry is incurring losses. v. The injury margin and dumping margin determined in the present POI is substantial, despite existing duties. 2. It is thus seen that the domestic industry suffered continued injury due to dumped imports despite existing duties on PUC. H.MAGNITUDE OF INJURY AND INJURY MARGIN 76. The Authority has determined Non-Injurious Price (NIP) for the domestic industry on the basis of principles laid down in the Rules read with Annexure III, as amended. The non-injurious price of the product under consideration has been determined by adopting the information/data relating to the cost of production provided by the domestic industry. The non-injurious price has been considered for comparing the landed price from the subject countries for calculating injury margin. For determining the non-injurious price, the best utilisation of the raw materials by the domestic industry over the injury period has been considered. The same treatment has been carried out with the utilities. The best utilisation of production capacity over the injury period has been considered. It is ensured that no extraordinary or non-recurring expenses were charged to the cost of production. A reasonable return (pre-tax @ 22%) on average capital employed (i.e., average net fixed assets plus average working capital) for the product under consideration was allowed as pre-tax profit to arrive at the non-injurious price as prescribed in Annexure III of the Rules and being followed. Injury Margin: +--------+----------------+-------+----------+-----------+ | SN | Particulars | UoM | China PR | Hong Kong | +========+================+=======+==========+===========+ | 1 | NIP | $/mtr | *** | *** | +--------+----------------+-------+----------+-----------+ | 2 | Landed price | $/mtr | *** | *** | +--------+----------------+-------+----------+-----------+ | 3 | Injury Margin | $/mtr | *** | *** | +--------+----------------+-------+----------+-----------+ | 4 | Injury Margin | % | *** | *** | +--------+----------------+-------+----------+-----------+ | 5 | Injury Margin | Range | 80-90 | 20-30 | +--------+----------------+-------+----------+-----------+ I. LIKELIHOOD OF CONTINUATION OR RECURRENCE OF INJURY I.1 Submissions by the domestic industry 77. The domestic industry submitted as follows with regard to likelihood of continuation or recurrence of dumping or injury – i. The imports are at its highest level in the POI. Dumping of subject goods continued from subject countries even after enhancement of duties in the last sunset review investigation. ii. Import price has decreased from 2023-24 and declined sharply in the POI. Comparing the cost of sales with selling price since last sunset review investigation, the gap between cost and import price has consistently grown wider. iii. Continued dumping from the subject countries has restrained domestic industry from charging reasonable price for its product. iv. Despite existing duties (a) volume of imports has risen significantly (b) price and cost undercutting is positive even with addition of duties, and (c) dumping and injury margin are positive. This itself shows why duties ought to be continued and enhanced. v. The economic parameters of domestic industry have been adversely affected to such an extent that PBT, cash profit and ROCE are all negative in the POI. If duties are allowed to expire, it would further deteriorate the performance of domestic industry and imports would flood Indian market. vi. Dumping margin and injury margin in the present investigation is more than margin determined by the Authority in the last two investigations. vii. China is the largest producer of subject goods. Producers in subject countries have significant capacities, more than their domestic demand. viii. There are huge capacities for the product under consideration in China PR, far beyond the demand in domestic market. Capacity of even one of the largest producers, is more than Indian demand. ix. China is the largest exporter of subject goods in the world. Producers in subject countries are highly export oriented, as has been noted by the Authority in the last investigation as well. x. China is a global market leader in global flax production. China accounts for over 38.7% of global flax exports by value and more than 50% by volume in the last twelve months. xi. Cessation of existing duties will divert such imports to India and intensify dumping further. xii. Extension of anti-dumping duties is necessary to keep the ADD on flax yarn effective, the raw material of flax fabric production. In the absence of continued duties on flax fabric, importers will simply bypass the duty imposed on yarn by sourcing finished fabric directly from China, where producers typically operate as vertically integrated entities, manufacturing both yarn and fabric in the same company. xiii. India is one of the largest growing market of subject goods. While global flax fabric trade has been witnessing a downturn with global import volumes declining, India has emerged as the fastest growing destination market. xiv. India is one of the most highly penetrated market by Chinese imports globally. xv. Indian market is highly price sensitive and decide procurement based on price, foremost. In the event duties are ceased, domestic industry will have to reduce their selling prices further to compete with dumped imports, intensifying injury further. xvi. Imports from China PR to third countries are below import price to India, making India an attractive market to producers in subject countries. xvii. Many producers in Hong Kong, although are either incorporated or headquartered in Hong Kong, have production facilities in China PR. Therefore, Hong Kong imports have origin in China PR. xviii. All the likelihood parameters held by the Authority in the last investigation, continues to persist. xix. Producers in China PR receive multi-tier benefits from the state that reduces cost of every factor of production. Producers in China PR therefore can produce at substantially reduced production costs compared to a fair market economy. xx. Producers in China are therefore not governed by market forces and are even insulated from raw material cost fluctuation and absorb duties readily. xxi. As evident from increased dumping despite enhancement of duties in the last sunset review investigation, the producers in subject countries have been absorbing the duties imposed by India. xxii. Despite increase in cost of raw material over the injury period, the import price has decreased. In comparison, the difference between cost and import price has widened from the first sunset review investigation. xxiii. In a sunset review, the focus of the entire investigation is on the likelihood of injury. xxiv. In case of likelihood even if one or two parameters are satisfied the duty may be continued. I.2 Submissions by other interested parties 78. No submissions have been made by the exporters/other interested parties with regard to likelihood of continuation or recurrence of injury. I.3 Examination by Authority 79. The present review is a sunset review of anti-dumping duties imposed on the imports of the PUC from China PR. Under the AD Rules, the Authority is required to determine whether cessation of existing duty is likely to lead to continuance or recurrence of dumping and injury to the domestic industry. 80. Clause (vii) of Annexure II of the Rules provides, inter alia, for factors which are required to be taken into consideration for likelihood analysis, viz., a. A significant rate of increase of dumped imports into India indicating the likelihood of substantially increased importation. b. Sufficient freely disposable, or an imminent, substantial increase in, capacity of the exporter indicating the likelihood of substantially increased dumped exports to Indian markets, taking into account the availability of other export markets to absorb any additional exports. c. Whether imports are entering at prices that will have a significant depressing or suppressing effect on domestic prices and would likely increase demand for further imports; and d. Inventories of the article are being investigated. 81. The Authority has examined the likelihood of continuation or recurrence of injury considering the requirement laid down under Section 9A (5), Rule 23 and parameters relating to the threat of material injury in terms of Annexure - II (vii) of the Anti-Dumping Rules, and other relevant factors brought on record by the interested parties. The Authority notes as under - i. Significant rate of increase of dumped imports 82. The Authority notes that despite imposed duties, imports are at the highest level in the POI. Further, imports have continued despite existing duties. In the original investigation, benchmark form of duties was imposed, which thereafter in the first sunset review was changed to fixed form of duty. In the second sunset review investigation, as imports continued and caused material injury to the domestic industry, the duties were enhanced. Dumped imports from subject countries have continued despite such enhanced duties. Movement of imports over the injury period is shown in the table below. +-----------------------+-----------------------+-----------------------+ | Particulars | Subject Country – | Subject Country – | | | China | Hongkong | | | 000' Mtr | 000' Mtr | +=======================+=======================+=======================+ | 2004-05 | 7,030 | 633 | +-----------------------+-----------------------+-----------------------+ | 2005-06 | 8,254 | 986 | +-----------------------+-----------------------+-----------------------+ | 2006-07 | 9,463 | 1,259 | +-----------------------+-----------------------+-----------------------+ | 2007-08 | 11,209 | 1,321 | +-----------------------+-----------------------+-----------------------+ | 2010-11 | 5,200 | 400 | +-----------------------+-----------------------+-----------------------+ | 2011-12 | 5,200 | 400 | +-----------------------+-----------------------+-----------------------+ | 2012-13 | 4,900 | 400 | +-----------------------+-----------------------+-----------------------+ | Oct'12-Sep'13 | | | | (POI of SSR-I) | 4,600 | 300 | +-----------------------+-----------------------+-----------------------+ | 2013-14 | 4,700 | 200 | +-----------------------+-----------------------+-----------------------+ | 2015-16 | 5,088 | 136 | +-----------------------+-----------------------+-----------------------+ | 2016-17 | 4,466 | 88 | +-----------------------+-----------------------+-----------------------+ | 2017-18 | 4,781 | 74 | +-----------------------+-----------------------+-----------------------+ | Apr-18 to Jun-19 | | | | (POI of SSR-II) | 5,137 | 480 | +-----------------------+-----------------------+-----------------------+ | 2021-22 | 10,641 | 78 | +-----------------------+-----------------------+-----------------------+ | 2022-23 | 11,531 | 1 | +-----------------------+-----------------------+-----------------------+ | 2023-24 | 15,945 | 89 | +-----------------------+-----------------------+-----------------------+ | POI | 16,112 | 98 | +-----------------------+-----------------------+-----------------------+ Source: Information upto Apr-18 to Jun-19 (POI of SSR-II) from past findings. Information from 2021-22 to POI based on imports data from DG SYSTEM. 83. Imports from China has increased significantly and has shown an increase of 51%. Thus, cessation of duties is likely to lead to further increase in imports. ii. Continued dumping by producers in subject countries 84. The Authority notes that the imports from subject countries continues to be made at dumped and injurious price despite imposition of duties. Therefore, Authority holds that dumping is likely to continue in case of cessation of duty. Dumping margin +-----------------------+-----------------------+-----------------------+-----------------------+ | | China PR | | | +=======================+=======================+=======================+=======================+ | | 1st Sunset review | 2nd Sunset Review | Present investigation | +-----------------------+-----------------------+-----------------------+-----------------------+ | Original investigation| 30% - 40% | 80%-100% | 110%-120% | | 219% | | | | +-----------------------+-----------------------+-----------------------+-----------------------+ | | Hong Kong | | | +-----------------------+-----------------------+-----------------------+-----------------------+ | Original investigation| 20% - 30% | 20%-40% | 40%-50% | | 120% | | | | +-----------------------+-----------------------+-----------------------+-----------------------+ iii. Significant Production capacities 85. The Authority notes, that as per available information on record from past investigations, producers in China have significant production capacities. Further, China PR is the largest producer of subject goods. In the past investigation, the Authority had noted capacities of the following Chinese producers and the domestic industry has provided evidence of continuation of the same. +--------+---------------------------------------+---------------------------+ | SN | Producer | Capacity (MT) | +========+=======================================+===========================+ | 1. | Changshu Lifeng Linen & Cotton Weaving| 2000,000 meters/year | | | Co | | +--------+---------------------------------------+---------------------------+ | 2. | Haining Yutex Co., Ltd. | 250000 Meter/day | +--------+---------------------------------------+---------------------------+ | 3. | Wujiang Tangchao Textile Co., Ltd. | 10,00,000 meters/ month | +--------+---------------------------------------+---------------------------+ | 4. | Qingdao Yuzhou Knit And Textile Co., | 40,000 meters/ year | | | Ltd. | | +--------+---------------------------------------+---------------------------+ | 5. | Wujiang Maishunda Silk Textile Co., | 20,00,000 meters/year | | | Ltd | | +--------+---------------------------------------+---------------------------+ | 6. | Hunan Huasheng Industrial & Trading | 24000000 metres / year | | | Co. | | +--------+---------------------------------------+---------------------------+ Source: Webresource¹ 86. The domestic industry has further supplemented with information of more Chinese producers in the present investigation- +--------+-------------------------------------+---------------------------------------+ | SN | Producer | Capacity (MT) | +========+=====================================+=======================================+ | 1. | Shandong Mengyin Cotton Textile Co. | Yarn - 22,000 MT/year; Fabric – | | | Ltd. | 60,000,000 | +--------+-------------------------------------+---------------------------------------+ | 2. | Qiqihar Xiangyu Textile Co. Ltd. | Yarn- 10,000 Tons/year; Fabric – | | | | 12,000,000/year | +--------+-------------------------------------+---------------------------------------+ | 3. | Zhucheng Deliyuan Textile Co. Ltd. | Yarn – 8,900 tons/year; Fabric – | | | | 63,000,000/year | +--------+-------------------------------------+---------------------------------------+ | 4. | Hubei Jinghua Textile Group Co. Ltd.| Yarn – 20,000 tons/year; Fabric – | | | | 15,000,000 mtrs | +--------+-------------------------------------+---------------------------------------+ | 5. | Shaoxing WuYueXinQi Linen & Cotton | 25,000,000 mtrs/year | | | Textile Co. Ltd. & Shaoxing | | | | Yifunian Textile Co. Ltd. | | +--------+-------------------------------------+---------------------------------------+ | 6. | Hangzhou Hangmin Meishida Printing | 200,000,000 mtrs/year | | | Dyeing Co. Ltd. | | +--------+-------------------------------------+---------------------------------------+ | 7. | Total Capacities | 37,50,00,00 mtrs/year | +--------+-------------------------------------+---------------------------------------+ Source - webresearch² 87. The producers have exported to the Indian market during the injury period and possess such significant capacities that even capacity of one producer alone is sufficient to meet the entirety of demand. iv. China's dominance in flax fabric market 88. Applicant has submitted Cross-country report for: woven fabrics of flax (2025) market report to supplement its claim that China is World's leading supplier of flax fabrics. It is seen that the report states that China accounts for over 38.7% of global flax fabric exports by value and more than 50% by volume in the calender year 2024. Applicant has also submitted another evidence showing China as the largest exporter of Flax woven fabric in the world.3 1 Shandong Mengyin Cotton Textile Co. Ltd. http://www.my-textile.com/?user=mymfc&language=en; 2 Qiqihar Xiangyu Textile Co. Ltd. https://www.chinatexnet.com/ChinaSuppliers/2960/QIQIHAR-XIANGYU-TEXTILE- COMPANY-LTD-. html; 3 Zhucheng Deliyuan Textile Co. Ltd. https://www.chinatexnet.com/China Suppliers/864/Zhucheng-Deliyuan- Textile-Co-Ltd-.html 4 Hubei Jinghua Textile Group Co. Ltd. https://www.manufacturer.com/jinghuatextile-supplier- profile; 5 Shaoxing WuYueXinQi Linen & Cotton Textile Co. Ltd. & Shaoxing Yifunian Textile Co. Ltd. http://chinawyxq.com/ 6 Hangzhou Hangmin Meishida Printing Dyeing Co. Ltd. http://en.hz-meishida.com/about.html 2 Changshu Lifeng Linen & Cotton Weaving Co https://www.globalsources.com/si/AS/Chang shuLifeng/6008845790883/Homepage.htm; Haining Yutex Co., Ltd. https://yufangzhizao.en.alibaba.com/company_profile.html; Wujiang Tangchao Textile Co., Ltd. https://tangchaotex.diytrade.com/; Qingdao Yuzhou Knit And Textile Co., Ltd. www.chinatexnet.com/ChinaSuppliers/16212/; Wujiang Maishunda Silk Textile Co., Ltd. https://www.chinatexnet.com/ChinaSuppliers/14310/ 3 https://oec.world/en- The Observatory of Economic Complexity (OEC) is an online data visualization and distribution platform focused on the geography and dynamics of economic activities. The OEC integrates and distributes data from a variety of sources to empower analysts in the private sector, public sector, and academia. 89. It is noted from the report that not only does China supply 50% of global demand of subject goods, but also that the import price of subject goods in India has decreased from 2023 onwards and that India is the third highest penetrated market by Chinese imports. 90. Therefore, in the event of cessation of anti-dumping duty, these exporters are likely to intensify imports at dumped and injurious price causing injury to the domestic industry. v. Vulnerability of Domestic Industry in terms of price sensitivity of the product and Indian market 91. Authority notes the submission of the domestic industry that Indian market is highly price sensitive, where buyer's decision is dictated by pricing of product. Availability of low-priced imports from subject countries would not only diverts consumers towards such dumped imports but also force domestic industry to lower their prices to compete with such dumped imports. The long-term dumping practice by subject countries substantiates the same. Therefore, if duties are ceased, imports are likely to cause further injury to the domestic industry. vi. Price undercutting in absence of measures 92. The Authority notes that despite enhancement of duties in the last sunset review investigation and existence of duties currently, subject imports continue to undercut selling price. Price undercutting is positive inspite of addition of existing duties. Therefore, in case of expiry of duty, it is only likely for such undercutting margin to increase further. vii. Imports entering at prices that are likely to suppress or depress the prices of the domestic industry to a significant degree 93. The subject imports are already entering at a price that is below the cost of sales of the domestic industry. As noted hereinabove, the selling price of the domestic industry did not increase at the same rate as the increase in cost of sales, showing price suppression during the injury period. It is further noted that the landed price of imports has been below the level of cost of sales of the domestic industry during the injury period. Such price effects from subject imports are likely to continue in the absence of anti-dumping duties. viii. Producers in Hong Kong are of Chinese origin 94. It is noted that many producers of subject goods in Hong Kong, are of Chinese origin. The Applicant has provided information on, Star Enterprise (HK) Co. Ltd., a member of Hong Kong Textiles Association, which although is incorporated in Hong Kong but has production facilities in mainland China.4 Similarly, Tung Ga Group, which is also headquartered in Hong Kong, has factories and mills in China PR.5 Furthermore, although such information was made available to interested parties in Hong Kong, no rebuttals have been made. J. CONCLUSION ON LIKELIHOOD OF DUMPING AND INJURY 95. There is likelihood of continuation of dumping and injury to the domestic industry in the event of cessation of existing antidumping duty as is noted below: a. Despite existing duties, dumping has continued with imports reaching the highest level in the POI. Cessation of duties, therefore, is likely to lead to further increase in imports.. Dumping is likely to continue if duties are ceased. b. Producers in subject countries have significant production capacities. c. Exporters in subject countries are highly export oriented. d. China dominates globally in flax fabric market, supplying 50% of global demand. If duties are ceased, further imports can easily be diverted into the Indian market. e. Subject countries have a long history of dumping in the Indian market. f. Indian market is price sensitive. Low priced imports from subject countries would divert Indian consumers towards it and compel domestic industry to lower their prices further. g. Price undercutting is positive despite existing duties. Therefore, cessation of duty would likely lead to increase in undercutting margin. K. POST DISCLOSURE COMMENTS K.1 Submissions by domestic industry 96. Post Disclosure comments made by the domestic industry are as follows: a. Import of subject goods reached the highest level in the POI. The dumping of subject goods continued from the subject countries even after the imposition of duties. The antidumping duties were imposed in INR which was converted to USD in first sunset review investigation but as imports continued and caused injury, duties had to be enhanced in second review investigation. In the present case, imports have continued and have intensified since 2023-24. b. The fact of current dumping and current injury in itself is sufficient to show likelihood of dumping and injury, particularly in a situation like the present where (a) the volume import is so significant, (b) the price undercutting is so high, (b) dumping margin and injury margin are positive. c. China is the largest producer of subject goods in the world. These capacities are so humongous, that they can satisfy Indian demand many times over d. China is global market leader in global flax production and exports. China is highly export oriented. Majority of the producers in the subject countries export the product under consideration e. The Indian market is highly price sensitive. The consumers decide their procurement, with the price being the foremost consideration. Such being the case, availability of such low-priced imports from subject countries in the market is definitely causing an adverse impact on the Domestic Industry. f. Many flax fabric producers in Hong Kong are of Chinese origin. For example, Star Enterprise (HK) Co. Ltd, a member of the Hong Kong Textiles Association, was incorporated in Hong Kong but has production facilities in Mainland China, including spinning and weaving mills g. Extension of the present anti-dumping duties is necessary to keep the ADD imposed on flax yarn effective, which is the key raw material for flax fabric production. In the absence of continued duties on flax fabric, importers will simply bypass the duty imposed on yarn by sourcing finished fabric directly from China, where producers typically operate as vertically integrated entities, manufacturing both yarn and fabric in the same company h. Flax fibres are converted into linen yarn, which thereafter is woven into fabric. Despite increase in flax price, especially in 2023-24 and the POI, import price of subject goods declined. The Domestic Industry was therefore prevented from increasing its selling prices in proportion to the increase in costs, leading to increasing financial losses. i. Government of China give huge subsidies to the textile industry. Chinese manufacturers effectively receive all factors of production at discounted or below-market prices. j. Long duration of measures can be seen by various WTO members, with some jurisdictions imposing measures for upward of 40 years. k. The PUC is a premium textile fabric product. Linen is a very premium textile which is majorly used and worn by the elite section of the society. Linen products are not used by public at large. l. The usage is not limited due to the cost of the product, rather it is the cost of regular maintenance being high and recurring which is the primary reason for limiting the usage only by the elite segment of the society. Thus the impact on the ADD on these segment will be too low. m. The NIP determined is very low leading to low level of injury margin as raw material price considered is unduly low, consideration of average cost of the raw material is in appropriate, advertisement cost should be included in the calculation of NIP, rejection of apportionment methodology is inappropriate. K.2 Submissions by other interested parties 97. No submissions have been made by the exporters/other interested parties post issuance of Disclosure Statement. K.3 Examination by the Authority 98. The Authority has examined the post disclosure submissions made by the domestic industry and notes that major comments are reiterations which have already been examined suitably and addressed adequately in the relevant paras of the disclosure statement. Further, as regards the new submissions made in regard to the determination of NIP, the Authority notes that NIP has been determined for the domestic industry on the basis of information furnished by the domestic industry, principles laid down in the Anti- Dumping Rules read with Annexure III and the Generally Accepted Accounting Principles (GAAP). L. INDIAN INDUSTRY'S INTEREST AND OTHER ISSUES L.1 Submissions by domestic industry 99. Submissions made by the domestic industry with regards to public interest is as under: a. Despite existence of duties, PUC continues to be exported to India at dumped prices. In the event duties cease, there are enough grounds that suggest that dumping will increase further. b. Imports from China PR at the highest level in the POI despite existence of duties and enhancement of duties in the last investigation. c. Despite increase in production, consequent to increase in demand of subject goods in the country, the market share of domestic industry has declined whereas that of subject countries imports have significantly increased. d. Dumped imports are undercutting both cost of sales and selling price of domestic industry. To compete with such dumped imports, domestic industry has to sell at substantially suppressed prices, resulting in financial losses. Profits, ROI and cash profits are all negative during POI. e. Dumping and consequent injury as evident in the present investigation are very likely to intensify from the subject countries and there is likelihood of dumping and injury to the domestic industry in the event of cessation of existing anti-dumping duty. f. Available information shows that producers in subject countries have significant freely disposable capacities which are many times Indian demand. Additionally, exporters in subject countries are highly export oriented. g. The yarn and fabric operate practically as one entity. If the viability of PUC is threatened, then it would also impact the economics of yarn, which is dependent on captive consumption of yarn. Therefore, cessation of duties would send a ripple effect to upstream industry as well. h. Domestic industry employs approx. *** employees in the production of PUC and yarn. By an estimate therefore, approx. *** employees are directly engaged in the production of PUC and yarn. If duties are ceased, Indian industry would be gravely affected including all those who are employed in the industry. i. As the Authority has noted in the last investigation, the production is PUC is centred in the MSME sector. When inspite of enhanced and existing duties, imports have increased at its highest level and dumping margin has increased, then without duties to protect the Indian industry, MSME would collapse and organised sector would be gravely injured. j. The anti-dumping duty is required to be extended further for a period of five years on subject countries with due enhancement in quantum of duties. Current quantum is not sufficient to effectively counteract dumping. k. Information for the post POI period also shows continued dumping and injury margin at significantly positive levels which is an indicator of likely situation in case of expiry of present duties. l. There would be negligible impact of continuance or enhancement of anti-dumping duty. The consumers of subject goods are upper middle class and elite section of society. An increase in cost of subject goods in downstream product is hardly 10-15%. This is evinced by the increase in demand of subject goods, despite significant increase in cost of subject goods over injury period. m. None of the exporters, importers or users have responded to the questionnaire issued by the Authority either in the present investigation or the last sunset review investigation. Therefore, non-participation itself implies that there is no adverse impact of continuation and enhancement of duties. n. There is no evidence of any adverse impact on the consumers despite duties existing for long. o. The price increase in PUC is easily absorbed by the market without any adverse effects. p. The Indian industry has benefited from the imposition of duties on the subject goods., as is evident from capacity utilization and increased production by the domestic industry. The domestic industry has suffered price injury in view of intensified dumping margin and injury margin. q. The extension of anti-dumping duties is essential to ensure a level playing field in the Indian market, the viability of the domestic production of the like article, and prevent India from becoming solely import reliant on the product. r. Presence of a vibrant domestic market is essential to ensure a fair and competitive Indian market, which in its absence would be completely dominated by imports from subject countries. s. It is in the interest of the public at large to have a strong, competitive domestic production of the product. Further, it is also important to protect the MSMEs engaged in the production and boost employment therein. L.2 Submissions by other interested parties 100. No submissions have been made by the exporters/other interested parties with regard to Indian Industry's interests. L.3 Examination by the Authority 101. The Authority considered whether continuation of anti-dumping duties would have any adverse impact on the interest of the public. In order to determine such impact, the Authority weighed the impact of the extension of duties on the availability of the goods in the Indian market, the impact on the users of the product as well as the domestic industry and the impact on the general public at large. This determination is based on the submissions and evidence submitted over the course of the present investigation. 102. The Authority issued initiation notification inviting views from all the interested parties, including importers, consumers and other interested parties. The Authority also prescribed a questionnaire for the users to provide the relevant information with regard to the present review investigation, including possible effect of the anti- dumping duty on their operation. The Authority sought information on, inter alia, interchangeability of product supplied by the various suppliers from different countries, ability to switch sources, the effect of anti- dumping duty on the consumers, the factors are likely to accelerate or delay the adjustment to the new situation caused by continuation of anti-dumping duty. 103. The Authority had prescribed an economic interest questionnaire which was sent to all interested parties to this review investigation. Only the domestic industry has responded to the economic interest questionnaire. The user industry has neither filed an economic interest questionnaire not filed user questionnaire response. 104. It is noted that the purpose of anti-dumping measures, in general, is to eliminate injury caused to the domestic industry by the unfair trade practices of dumping so as to re-establish a situation of open and fair competition in the Indian market. The Authority recognises that the continuation of the anti-dumping duties might affect the price levels of the product under consideration as well as other downstream products manufactured by using subject goods in India. However, fair competition in the Indian market will not be reduced by the continuation of anti-dumping measures. On the contrary, the continuation of anti-dumping would prevent the decline of domestic industry and related upstream industry of yarn, that may ensue as a consequence of dumped imports from subject countries and help maintain the wilder availability of choices to the consumers of the product under consideration. 105. The Authority also notes that there are a number of producers in India, and majority of them in the unorganised MSME sector. Therefore, there is significant price competition between the domestic producers. This ensures that the users have ample availability of the products at competitive prices. No undue advantage of the antidumping duty is possible in such a situation. 106. The domestic industry has submitted that the cost of the subject goods in the downstream product, i.e., garments, is hardly 10 to 15%, however, the consumers when buying clothes are not concerned about the price of the fabric in the garment. It is seen that the selling price has increased over the injury period, and at the same time, the demand for the product has also increased. The Authority further notes that the fabric manufacturers also pass on the increase in the cost to the finished product particularly considering the fact that PUC is a premium textile fabric product. The Authority, therefore, concludes that the imposition of duty would be in the larger public interest M. CONCLUSION 107. Having regard to the information provided, submissions made and the facts available before the Authority as recorded above and on the basis of the above analysis of likelihood or continuance of dumping and injury to the domestic industry, the Authority concludes that – i. The volume of imports from subject countries have increased in both absolute and relative terms, despite existing duties. ii. Imports from China PR reached its highest level in the POI. Further the increase in imports are far higher than increase in demand. iii. Subject imports are significantly undercutting domestic prices, even with addition of anti-dumping duties. iv. Despite increase cost of raw materials leading to increase in cost, the selling price could not increase proportionately as the landed value of imports declined further. To compete with imported subject goods and maintain market share domestic industry has been constrained from raising its price proportionately, leading to price suppression. v. Capacity of domestic industry has remained constant throughout injury period. Capacity utilisation and production of domestic industry has increased over the injury period, in tandem with increase in demand of subject goods. However, market share of domestic industry has declined over the injury period. Market share of Indian industry as a whole has declined even further, whereas market share of subject imports has increased significantly. vi. Subject imports continue to have adverse effect on the financial parameters of the domestic industry. Profitability, cash profits and ROCE of domestic industry has declined over the injury period. The domestic industry is incurring losses. vii. There is sufficient evidence showing likelihood of dumping and injury to the domestic industry in the event of cessation of duties. a. There is continued dumping of subject goods and material injury to the domestic industry despite existing duties. Subject countries have a long history of dumping in the India market and acquired a significant share in domestic demand. b. Producers in subject countries have significant capacities that can satisfy domestic demand many times over. c. Exporters in subject countries are highly export oriented. Market research reports shows that China PR is the largest producer and exporter of subject goods, supplying almost 50% of global demand. d. While the price of raw material increased, the import price of subject goods did not move in tandem with the input prices. In the POI, import price of subject goods, declined below prevailing price of flax fibre. viii. The impact of duty on end consumer is found to be insignificant. N. RECOMMENDATION 108. The Authority notes that the present proceedings were conducted in accordance with the applicable law. All interested parties were duly notified and were granted adequate opportunity to provide information and present their views on the matters under investigation, including dumping, injury, causal link, likelihood of continuation or recurrence of dumping and injury and impact of the measures on the Indian industry. Pursuant to the sunset review, the Authority has arrived at the conclusion that continuation of the existing anti-dumping duties is required in the present case. However other than DI no other interested party responded or participated in the investigation. 109. The Authority, thus, considers it appropriate and necessary to recommend continuation of definitive duties equal to the figure indicated in Column 8 of the duty table below for a period of five (5) years on all imports of the subject goods from the subject countries. Therefore, considering the facts and circumstances of the case, as established hereinabove, anti-dumping duty equal to the amount indicated in Column 8 of the duty table given below is recommended to be extended on all imports of the subject goods, originating in or exported from the subject countries. Duty Table +--------+-----------+--------------------------------+-------------------+----------------+----------+----------+--------+-----------+-----------+ | SN | Tariff | Description of Goods | Country of Origin | Country of Export | Producer | Exporter | Amount | UoM | Currency | | | Item | | | | | | | | | +========+===========+================================+===================+================+==========+==========+========+===========+===========+ | (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | (10) | +--------+-----------+--------------------------------+-------------------+----------------+----------+----------+--------+-----------+-----------+ | 1 | 5309 | Flax or Linen Fabric (note | China PR | Any | Any | Any | 2.36 | Per meter | US$ | | | | below) | | | | | | | | +--------+-----------+--------------------------------+-------------------+----------------+----------+----------+--------+-----------+-----------+ | 2 | 5309 | Flax or Linen Fabric (note | Any other than | China PR | Any | Any | 2.36 | Per meter | US$ | | | | below) | Hong Kong | | | | | | | +--------+-----------+--------------------------------+-------------------+----------------+----------+----------+--------+-----------+-----------+ | 3 | 5309 | Flax or Linen Fabric (note | Hong Kong | Any | Any | Any | 1.14 | Per meter | US$ | | | | below) | | | | | | | | +--------+-----------+--------------------------------+-------------------+----------------+----------+----------+--------+-----------+-----------+ | 4 | 5309 | Flax or Linen Fabric (note | Any other than | Hong Kong | Any | Any | 1.14 | Per meter | US$ | | | | below) | China | | | | | | | +--------+-----------+--------------------------------+-------------------+----------------+----------+----------+--------+-----------+-----------+ Note: "Product Under Consideration (PUC) is "Flax or Linen Fabric having flax content of more than 50%" 110. An appeal against the order of the Central Government arising out of these findings shall lie before the Customs, Excise and Service Tax Appellate Tribunal in accordance with the Customs Tariff Act, 1975. SIDDHARTH MAHAJAN, Designated Authority Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.