Final findings of TDI

7524 GI/2025 (1) REGD. No. D. L.-33004/99 EXTRAORDINARY PART I—Section 1 PUBLISHED BY AUTHORITY No. 333] NEW DELHI, WEDNESDAY, NOVEMBER 12, 2025/KARTIK 21, 1947 CG-DL-E-14112025-267666 MINISTRY OF COMMERCE AND INDUSTRY (Department of Commerce) (Directorate General of Trade Remedies) NOTIFICATION CASE NO. AD (SSR) - 05/2024 New Delhi,the 12th November,2025 FINAL FINDINGS Subject: Final finding in the sunset review of anti-dumping duty imposed on imports of Toluene Di- Isocyanate (TDI) from European Union and Saudi Arabia. F. No. 7/14/2024 – 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”) a. The Designated Authority (hereinafter referred to as “Authority”) received an application from Gujarat Narmada Valley Fertilizers & Chemicals Limited (hereinafter referred to as the ‘applicant’ or the “domestic industry”) seeking initiation of a sunset review for extension and enhancement of the anti-dumping duty imposed on imports of 'Toluene Di-Isocyanate’ (TDI) (hereinafter to be referred to as the “subject goods” or the “the product under consideration” or the “PUC”), originating in or exported from European Union and Saudi Arabia (hereinafter referred to as the “subject country”). b. On the basis of prima facie evidence submitted by the applicant, the Authority issued a public notice vide notification no. 7/14/2024- DGTR dated 30th December 2024 published in the Gazette of India, Extraordinary, initiating the subject investigation. The investigation was initiated in accordance with Section 9A (5) of the Act read with Rule 23 of the Rules to examine whether the expiry of such duty is likely to lead to continuation or recurrence of dumping and injury to the domestic industry and if there is a need for continued imposition of the anti-dumping duties. A. BACKGROUND OF THE CASE 1. The original anti-dumping investigation into imports of product under consideration from European Union, Saudi Arabia, Chinese Taipei and United Arab Emirates was initiated by the Authority on 31st January 2020. Following a request by the applicant and a thorough preliminary examination, the Authority dated 4th September 2020, recommended imposition of provisional anti-dumping duty. Subsequently, the Ministry of Finance imposed provisional duties vide Customs Notification No. 43/2020-Customs (ADD) dated 2nd December 2020 for a period of 6 months. 2. After an elaborate investigation, the Authority concluded that the imports of the product under consideration from the subject countries had caused injury to the domestic industry and vide final finding dated January 28th, 2021 confirmed the preliminary finding and recommended imposition of measures for a period of 5 years. The Ministry of Finance imposed duties vide Notification No. 28/2021-Customs (ADD), dated 27th April 2021. 3. In terms of Section 9A (5) of the Act, any anti-dumping duty imposed shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such an imposition. Further, Rule 23(1B) of the Rules provides as follows: “any definitive antidumping duty levied under the Act, shall be effective for a period not exceeding five years from the date of its imposition, unless the designated Authority comes to a conclusion, on a review initiated before that period on its own initiative or upon a duly substantiated request made by or on behalf of the domestic industry, within a reasonable period of time prior to the expiry of that period, that the expiry of the said anti-dumping duty is likely to lead to continuation or recurrence of dumping and injury to the domestic industry” 4. In accordance with the above, the Authority is required to review, on the basis of a duly substantiated request made by or on behalf of the domestic industry, whether the expiry of existing anti-dumping duty is likely to lead to continuation or recurrence of dumping and injury. 5. The scope of the present review covers all aspects of the final finding no. 06/43/2019-DGTR dated 28th January 2021, and Notification No. 28/2021-Customs (ADD) dated 27th April 2021. 6. Central Government has, vide Notification No. 28/2025-Customs (ADD) dated 19th August, 2025 extended the levy of definitive anti-dumping duty on imports of Toluene Di-Isocyanate (TDI) from the European Union and Saudi Arabia. The said duties shall remain applicable until 1st March, 2026. In accordance with the above, the Designated Authority has revised the schedule for the completion of the sunset review investigation in respect of the subject goods. The investigation will now be concluded on or before 30th November, 2025. B. PROCEDURE 7. The procedure described below has been followed with regard to the investigation: i. In accordance with Rule 5 of the Rules, before proceeding to initiate the investigation, the Authority notified the embassy of the subject country in India about the receipt of the present sunset review anti-dumping application. ii. In accordance with Rule 6 of the Rules, the Authority issued a notification no. 7/14/2024- DGTR dated 30th December 2024, published in the Gazette of India Extraordinary, initiating the sunset review anti-dumping investigation concerning the imports of the product under consideration from the subject countries. iii. The period of investigation (POI) for the purpose of present investigation is 1st April 2023 to 30th June 2024 (15 months). The injury period for the investigation will cover the periods 2020-21, 2021-22. 2022-23 and the period of investigation. iv. 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. v.In accordance with Rule 6 (2) of the Rules, the Authority sent a copy of the initiation notification dated 30th December 2024 to the embassy of the subject countries in India, the known producers, and exporters from the subject countries, known importers and users in India, and the other interested parties, as per the email addresses made available by the domestic industry. vi. In accordance with Rule 6 (3) of the Rules, the Authority provided a copy of the non- confidential version of the application to the known producers/exporters and to the embassy of the subject country in India. vii. The embassy of the subject countries in India was also requested to advise the exporters/producers from its country to respond to the questionnaire within the prescribed time limit. A copy of the letter and questionnaire were sent along with the names and addresses of the known producers/exporters of the subject countries. viii. In accordance with Rule 6 (4) of the Rules, the Authority sent exporter questionnaire to the following known producers/ exporters in subject countries. SN | Name of producer/exporters in the subject countries. ---|-------------------------------------------------- 1 | BorsodChem Zrt, European Union 2 | BASF Schwarzheide GmbH, European Union 3 | BorsodChem Zrt Covestro Deutschland AG, European Union 4 | Dow Chemical Company, Saudi Arabia 5 | Sadara Chemical Company, Saudi Arabia 6 | SABIC Asia Pacific Pte Ltd, Saudi Arabia ix. The following producers and exporters have registered in the present investigation. SN | Name of producer/exporters in the subject country. ---|------------------------------------------------ 1 | BorsodChem Zrt., European Union 2 | Covestro Deutschland AG, European Union 3 | Sadara Chemical Company, Saudi Arabia (‘Sadara’) 4 | Saudi Basic Industries Corporation (‘SABIC’) 5 | SABIC Asia Pacific Pte. Ltd., Singapore (‘SAPPL’) 6 | Dow Saudi Arabia Product Marketing BV (‘Dow Marketing’) 7 | Dow Chemical Pacific Singapore Pvt. Ltd. (‘Dow Singapore’) x.In accordance with Rule 6(4) of the Rules, the Authority sent importer’s questionnaire to the following known importers/users of the product under consideration in India calling necessary information. SN | Name of users/importers of the product under consideration in India. ---|---------------------------------------------------- 1 | Covestro (India) Private Limited 2 | Wanhua International (India) Private Limited 3 | Moka Business Private Limited 4 | Flexipol Foams Pvt Ltd 5 | Dow Chemical International Private Limited 6 | Duroflex Private Limited 7 | Prime Comfort Products Pvt. Ltd 8 | Sheela Foam Limited xi. The following users/importers have registered in the present investigation. SN | Name of users and importers. ---|---------------------------------------------- 1 | Dow Chemical International Pvt. Ltd. (‘DCIPL’) 2 | Wanhua International (India) Pvt Ltd. (WIPL) 3 | Covestro India Pvt. Ltd. (CIPL) 4 | Sheela Foam Limited (‘SFL’) xii. The Authority also sent copies of initiation notification to the following association and sought their comments: SN | Name of producer/exporters in the subject countries. ---|------------------------------------------------ 1 | Indian Polyurethane Association (‘IPUA’) xiii. The above association has responded to the initiation notification and participated in the present investigation. xiv. A list of all interested parties that registered themselves within the prescribed timeline was uploaded on the website. All registered interested parties were directed to circulate the non- confidential version of all their submissions in the present proceedings with all other interested parties. xv. The Authority issued an economic interest questionnaire 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 by the following interested parties. SN | Name of interested parties ---|-------------------------------------------------------- 1 | Sadara Chemical Company, Saudi Arabia 2 | Saudi Basic Industries Corporation, Saudi Arabia (SABIC) and SABIC Asia | Pacific Pvt. Ltd. (SAPPL) 3 | Covestro Deutschland AG 4 | BorsodChem Zrt 5 | Gujarat Narmada Valley Fertilizers & Chemicals Limited xvi. Foreign producers, exporters and other interested parties who have not responded to the Authority, or have not supplied information relevant to this investigation, have been treated as non-cooperating with interested parties. xvii. The Authority made available the non-confidential version of the submissions made by the various interested parties. 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. xviii. In accordance with Rule 6(6) of the Rules, the Authority provided an opportunity to the interested parties to present their views orally in a public hearing held on 13th June 2025 in hybrid mode. Due to change in the Designated Authority, a second oral hearing was held on July 29, 2025. The parties that presented their views in the oral hearing were requested to file written submissions of the views expressed orally, followed by rejoinder submissions, if any. The parties shared their non-confidential submissions with other interested parties and were advised to offer their rebuttals. xix. In accordance with Rule 6(8), wherever an interested party has refused access to or has otherwise not provided necessary information in a timely manner during the course of the present proceedings, or has significantly impeded the investigation, the Authority has considered such parties as non-cooperative and recorded the findings on the basis of the facts available. xx. In accordance with Rule 7, the information provided by the interested parties on confidential basis was examined with regard to the sufficiency of such confidentiality claims. On being satisfied, the Authority has accepted the confidentiality claims wherever warranted and such information has been considered as confidential and not disclosed to the other interested parties. Wherever possible, parties providing information on confidential basis were directed to provide sufficient non-confidential version of the information filed on confidential basis. xxi. In accordance with Rule 8, the Authority, during the course of the investigation, satisfied itself with the accuracy of the information supplied by the domestic industry and the interested parties, which forms the basis of this final finding. The information was verified to the extent possible and verified the data documents submitted by the domestic industry and the interested parties to the extent considered relevant, practicable and necessary. xxii. In accordance with Rule 8, the Authority conducted verification of the data provided by the domestic industry and other interested parties to the extent considered necessary for the present proceedings. The Authority has considered the verified data of the interested parties in its analysis in the present case. xxiii. The Authority calculated the non-injurious price (NIP) for the product under consideration so as to ascertain whether duties lower than the dumping margin would be sufficient to remedy the injury being suffered by the domestic industry. The NIP has been calculated based on the optimum cost of production and cost to produce & sell the domestic like article in India, based on the information furnished by the applicant and having regard to the Generally Accepted Accounting Principles (GAAP). xxiv. The Authority has considered all the arguments raised and information provided by all the interested parties to the extent the same is supported with evidence and considered relevant to the present investigation. The Authority will further examine the evidentiary documents submitted by the interested parties subsequent to the disclosure statement, which will form the basis for conclusions at the time of final findings. xxv. The Authority circulated the disclosure statement containing all essential facts to all interested parties on 31st October 2025. The Authority has examined all the post-disclosure comments made by the interested parties in these final findings to the extent deemed relevant. Any submission which was merely a reproduction of the previous submission, and which had been adequately examined by the Authority has not been repeated for the sake of brevity. xxvi. “***” in this final finding represents information furnished by an interested party on a confidential basis and so considered by the Authority under the Rules. xxvii. The exchange rate adopted by the Authority for the subject investigation is 1 US$=Rs 83.82. C. PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE A.1 C.1 Submission of the other interested parties 8. The other interested parties have made the following submissions with regards to the product under consideration and like article: - i. The product supplied by the domestic industry exceeds the internationally prescribed levels of antioxidants including BHT. ii. TDI produced by the domestic industry contains specifications that are lower than the TDI quality offered by international competitors and accepted at international standards. iii. The domestic industry does not produce ODCB-free TDI or BHT-free TDI in sufficient quantities. DI did not produce these grades. They have recently started production of these in one of their plants but the quantities of it is insufficient to meet the demand. iv. The domestic industry is trying to downplay the relevance of specialized variants such as BHT-free or ODCB-free TDI by characterizing its demand as non-essential. v. The Authority must evaluate whether the domestically produced article is comparable to the imported product, especially when the imported variant is required to meet technical and regulatory standards that the domestic variant fails to satisfy. vi. The limited production of BHT-free TDI in India is not indicative of limited demand but rather a reflection of operational constraints and commercial choices made by domestic industry. The fact that it is manufactured in small quantities demonstrates that such demand exists but is not being adequately served. vii. ODCB-free TDI, which is essential for REACH-compliant applications and exports to certain international markets, is not manufactured by domestic industry at all and has to be entirely imported. A.2 C.2. Submission of the domestic industry 9. The domestic industry has submitted as follows with regards to the scope of the product under consideration and like article: i.The scope of the product under consideration in the present investigation is the same as defined in the original investigation. ii. There have been no developments in the product and the product produced by the domestic industry continues to remain like article to the imported product. iii. The domestic industry has produced and supplied BHT and ODBC free TDI. iv. The Authority has already established in the sunset review of anti-dumping duty on subject goods from China PR, Japan and Korea RP that the demand for BHT free material is very less. v. The domestic industry has supplied the product to users who have sold it to IKEA, which is one of the biggest users. IKEA has acknowledged that the product supplied by the domestic industry meets their requirements. vi. The domestic industry has also exported to 60 countries. No quality issues have been identified. vii. BIS certification in India for the product under consideration is not mandatory. However, the domestic industry is the first one to acquire such certification. viii. Sheela Foam has itself bought the subject goods from the domestic industry in substantial quantities. In fact, the domestic industry has supplied the product under consideration to an affiliate unit of Sheela Foam situated in Spain. A.3 C.3. Examination by the Authority 10. 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 original investigation is reproduced hereunder- “9. The product under consideration in the present investigation is Toluene Di-Isocyanate (TDI) having isomer content in the ratio of 80:20. The scope of the PUC in the present investigation is restricted to TDI having isomer content in the ratio of (80:20) and all other grades are beyond the scope of product under consideration. The PUC is used in Flexible Polyurethane foam, Mattresses, Pillows & Quilts, etc. 10. The Authority has considered the PUC as under: - “The product under consideration in the present investigation is “Toluene DiIsocyanate (TDI) having isomer content in the ratio of 80:20”. Toluene di-isocyanate (TDI) is an organic compound having formula CH3C6H3 (NCO)2. Two of the six possible isomers are commercially important: 2,4-TDI (CAS: 584-84- 9) and 2,6-TDI (CAS: 91-08-7). 2,4-TDI is produced in the pure state, but TDI is often marketed as 80/20 and 65/35 mixtures of the 2,4 and 2,6 isomers respectively. The product under consideration in the present investigation concerns TDI having isomer content in the ratio of (80:20). All other grades are beyond the scope of product under consideration. 11. The PUC is classified under the Chapter Heading 29 under the HS code 2929 10 20. The customs classification is only indicative and is not binding on the scope of the PUC.”. 11. The Authority has analyzed the contention of the interested parties regarding the quality of the product. The domestic industry placed evidence showing that the antioxidants used in the product under consideration are well within the prescribed limit and that it has acquired BIS certificate for quality. The domestic industry has supplied the product under consideration in large volume to the consumers and has exported the product to more than 60 countries. The Authority takes note that the domestic industry has placed evidence on records showing that the quality of the product under consideration is at par with the imported product. 12. As regards the contention that the domestic industry does not produce ODBC- free product under consideration, the domestic industry has placed the test copy on records showing product under consideration produced ODBC- free. The domestic industry has also provided copies of supplies made to European Union to a related entity of Sheela Foam. Therefore, the Authority holds that the contention of the user industry does not hold true. 13. In view of the above, the Authority confirms the same scope of the product under consideration as was notified earlier. The product under consideration is - “Toluene DiIsocyanate (TDI) having isomer content in the ratio of 80:20”. 14. The product is classifiable under Chapter 29 under the customs code 29291020. 15. It is also noted that the customs classification is indicative only and is in no way binding on the scope of subject investigation. 16. The Authority notes that the product produced by the domestic industry are comparable to the imported goods from the subject countries in terms of physical and chemical characteristics, product specifications, technical specifications, manufacturing process, and technology, functions and uses, pricing, distribution and marketing, and tariff classification of the goods. The two are technically and commercially interchangeable. Accordingly, the Authority concludes that the product produced by the domestic industry are ‘like article’ to the product under consideration imported from the subject country in terms of Rule 2(d) of the Rules. D. SCOPE OF DOMESTIC INDUSTRY AND STANDING A.4 D.1 Submission made by the other interested parties 17. The other interested parties have not made any submissions with regard to the scope of the domestic industry and standing. A.5 D.2. Submission made by the domestic industry 18. The domestic industry has submitted as follows with regards to the scope of the domestic industry and standing: i. The domestic industry is the sole producer of the product under consideration ii. The domestic industry has not imported the subject goods from subject countries and is not related to any exporter in the subject countries or importer of subject goods in India. iii. The domestic industry satisfies the requirement of Rule 2(b), and the application satisfies the requirement of standing in terms of Rule 5(3) of the rules. A.6 D.3. Examination by the Authority 19. The Authority notes that the present application has been filed by Gujarat Narmada Valley Fertilizers and Chemicals Limited. There is no other producer of the product under consideration in India. Gujarat Narmada Valley Fertilizers and Chemicals Limited have certified that it has not imported the product under consideration. The Authority has examined DG System’s transaction-wise data and found that there are no imports of the product under consideration by Gujarat Narmada Valley Fertilizers and Chemicals Limited. 20. Rule 2(b) of the Rules defines Domestic Industry as follows: “(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”. 21. It is noted that the applicant is eligible domestic industry within the meaning of the Rule 2(b), and the application satisfies the criteria of standing in terms of Rule 5(3) of the Rules. E. MISCELLANEOUS SUBMISSIONS AND CONFIDENTAILITY COMMENTS A.7 E.1 Submission of the other interested parties 22. The other interested parties have made following miscellaneous submissions: i. The domestic industry has received sufficient protection of trade remedial measures over an extended period against imports from various countries. ii. The import volume reported by the domestic industry is not consistent with what reported in previous investigation from China, Japan and Korea. iii. The domestic industry has claimed indexed data for opening and closing stock as confidential in contradiction to Rule 7 of Anti-dumping Rules. iv. The domestic industry has made baseless allegations regarding excessive confidentiality claimed in the questionnaire responses filed by interested parties. v. On the domestic industry’s objection of user not providing data in trends for Annexure 1, it lacks any legal or logical basis. Total cost breakup of end-products using PUC is inapplicable as the information pertains only for period of investigation. vi. The claim of domestic industry that the downstream industry has not disclosed broad stage- wise production process is inherently contradictory, as the domestic industry themselves have not disclosed any details of the stage-wise production process. vii. Trade Notice No. 10/2018 does not require to submit product catalogue or brochures. A.8 E.2 Submission made by the domestic industry 23. The domestic industry has made following miscellaneous submissions. i. The domestic industry has taken recourse of trade remedial measures because of dumped imports from various sources. ii. The shifting of dumping from one source to another has not allowed the domestic industry a chance to operate for a reasonably long period with reasonable profits. The domestic industry is still vulnerable to dumping. iii. The trade notice 10/2018 does not require disclosure of the opening or closing inventory. The trade notice only requires disclosure of average inventory. iv. The producers and exporters from the subject countries and importers and users have claimed excessive and unwarranted confidentiality, which has prevented the domestic industry from making any meaningful comments. v. Sadara group in its non-confidential version of the exporter questionnaire response has not provided trends of information in- Exhibit A-5, Appendix- 2, Appendix- 3B, Appendix- 4A, write-up on related parties involved in exports in India and Broad manufacturing process. Part II of the response filed by Sadara does not provide trends on Installed capacity, production quantity- PUC, capacity utilization, and sales quantity. vi. Dow Chemical International Private Limited, a user and related importer of Sadara Chemical Company, has not provided trends of information in Annexure 1, Annexure 2, Annexure 3 and Annexure 5. A summary of write-up on the production process is also not provided. vii. SAPPL has not provided trends of information in Appendix 2, Appendix 3A and Appendix1A. Whereas SABIC has not provided trends of information in Appendix 2, Appendix 3B and Appendix 1A. viii. Covestro Deutschland AG has not provided trends of information in Appendix 3A, and Appendix 4A. A summary of write-up on the production process is also not provided. ix. Covestro (India) Private Limited, a user and related importer of the Covestro Deutschland AG have not provided trends of information in Annexure 1, Annexure 2, Annexure 3 and Annexure 5. x. BorsodChem ZRT has not provided trends of information in Appendix 3A, Appendix 4A and Appendix 13. The exporter has also not provided information on product catalogues and brochures and a write-up on broad stage-wise manufacturing process. xi. The information on record establishes that dumping from the subject countries has aggravated and the domestic industry has suffered continuous injury. There is a need for enhancement of duties. A.9 E.3 Examination by the Authority 24. As regards the contention that the domestic industry has enjoyed sufficient protection of the anti- dumping duty, the Authority notes that anti-dumping duty is not a protection per se. Anti-dumping duty is a remedy to address injurious dumping. The present investigation is the 1st sunset review investigation for the subject countries. The recommendations for the imposition of the anti-dumping duty are made only after investigation by the Authority and when the requisite legal requirements are fully met. The Authority notes that dumping is unfair trade practice and must be addressed, if the same is causing or is likely to cause injury to the domestic industry. There is no bar on the number of times domestic industry can seek redressal from unfair trade practices of the foreign producers/exporters nor is there any bar on the number of times anti-dumping duty can be imposed. The Authority notes that as per Section 9(A)(5) of the Act and Rule 23 of the Rules, there is no restriction on the maximum period for which the duty can remain in force. The only condition necessary for extension of duties is whether cessation of such duty is likely to lead to continuation or recurrence of dumping and consequent injury to the domestic industry. The anti-dumping duty can be extended for a period as long as necessary to counteract likelihood of dumping and injury. Further, 25. The applicant in the present case has filed application contending continuance or recurrence of dumping and consequent injury to the domestic industry. A review, as provided under Rule 23 (1B), was initiated and the Authority shall determine whether there is a likelihood of continuation of recurrence of dumping and injury in case of cessation of anti-dumping duty. 26. As regards the submission that the import data submitted by the domestic industry is unreliable, the Authority has relied on the DG Systems transaction-wise import data for examination of volume and value of imports. 27. As regards the submission regarding confidentiality of information, it is noted that information provided by the interested parties on confidential basis was examined with regard to sufficiency of the confidentiality claim. On being satisfied, the Authority has accepted the confidentiality claims, wherever warranted and such information has been considered as confidential and not disclosed to other interested parties. Wherever possible, parties providing information on confidential basis were directed to provide sufficient non-confidential version of the information filed on confidential basis. The Authority made available the non-confidential version of the evidence submitted by various interested parties in the form of public file. The information related to imports, performance parameters and injury parameters of domestic industry has been made available in the public file. Business sensitive information has been kept confidential as per practice. F. DETERMINATION OF NORMAL VALUE, EXPORT PRICE AND DUMPING MARGIN F.1 Submission by the other interested parties 28. The other interested parties have made following submissions. i. The import data presented by the domestic industry is unreliable due to the fact that the export price reported is deflated and the import volume reported is not consistent with what was reported in previous investigations. ii. The average export price reported in the exporter questionnaire response is substantially higher than that projected in the application. iii. The veracity of the import data reported by the domestic industry should be examined by the Authority. iv. For determination of the dumping margin and injury margin, the Authority should rely on the normal value, export price and landed value as per the information provided by the exporter. v. The responding exporters have provided the complete information regarding the export price to India and resale price in the domestic market. vi. In the sunset review investigation, it is the consistent practice of the Authority to continue the existing anti-dumping duty if there is continuation of or the likelihood of recurrence of dumping and injury to the domestic industry. vii. If the Authority thinks that anti-dumping duty should be modified in the present sunset review, individual rate of anti-dumping duty for the Respondents should be based on dumping margin and injury margin. viii. The exports to India are done through SABIC group and sold to independent and unrelated Indian importers and DCIPL has not engaged in any form of trading or resale activity during the period of investigation. ix. The landed value for exports from Saudi Arabia in the application is inaccurate and does not reflect the actual transaction values. x. The landed value reported by domestic industry is abnormally low and not representative of the actual market conditions. xi. The allegation of the domestic industry regarding the import price reported to the customs in India not being the real import price at which the product is sold in the Indian market is completely misplaced insofar as the SABIC and SAPPL are concerned. xii. The import data has been drastically revised from what has been reported in the application by the domestic industry. xiii. The contention that dumping margin increased from the original investigation is based on the import data which is patently unreliable. xiv. The claim of the domestic industry regarding an increase in dumping margin for respondents is meaningless for determining the individual rate for Borsod in a sunset review investigation. xv. The domestic industry claim that Sadara has not provided third countries exports details is incorrect. Sadara has already stated that it has sold to SABIC and DOW for export to third countries. xvi. No rules are framed for reconstruction of export price when there is no resale of imported article by related importer/user. The Authority has also consistently accepted the actual export price to related importer/user. xvii. The export price goes through multiple checks and balances under Customs Law and Income Tax Law. The Special Valuation Branch investigates the transactions between the importer and the related foreign supplier. Therefore, there is no reason to doubt the export price of Covestro Deutschland AG to India. xviii. The respondents are also required to comply with transfer pricing regulation, which provides for assessment of fair price in case of transactions between related parties. xix. Import price of Covestro from Germany has increased year on year from 2022-23 onwards. After Russia-Ukraine war in February 2022, the energy prices increased significantly, and the impact was felt by Germany in the form of increase in cost of sales. xx. The red-sea crisis beginning from October 2023 has led to increase in the freight cost in the period of investigation, which resulted in further increase in import prices from Germany in the period of investigation. xxi. The cost of export sales during the POI is *** EUR per MT and its export price during the POI is *** EUR per MT. This shows that export price of Covestro to India is fair and at arm's length. xxii. The export price of Covestro continues to remain high in the post-period of investigation period as well. xxiii. The import price from Covestro Deutschland AG from Germany was higher than import price from Covestro China in 2022-23, period of investigation and also in the post period of investigation period. It would be irrational for the Respondents to maintain such high price artificially for elongated period and incur higher customs duty liability upon imports into India. xxiv. The claim that Anti-dumping Rules permits modification and enhancement of duty in a sunset review is incorrect and there can only be two outcomes of the investigation, which is either termination or continuation. F.2 Submission by the domestic industry 29. The domestic industry has made the following submissions. i. The dumping of subject countries continued. The dumping margin in the present investigation is higher than the dumping margin determined in the original investigation. ii. If dumping margin is determined as per the price at which the related entities have sold in the Indian market, the dumping margin will be far higher. iii. The claim that the exported product of Covestro Deutschalnd AG to Covestro (India) Private Limited has not been resold the product in the Indian market must be established by putting evidence in place. iv. For Borsod, the import price is not the real price at which the imported product has been sold in the domestic market, and the import volume and price has significantly fluctuated in the period of investigation. v. All the exporters in the subject countries have related importers, which then sell the subject goods in the domestic market. Based on interactions with the customers, the domestic industry is aware that the subject good in the Indian market is being sold by these related entities at price which is significantly below the price reported to customs. These related entities are selling the product at huge losses. vi. The import price declared to customs is not the real price at which the product is being sold in the domestic market. vii. The domestic industry is forced to sell at losses only because the related entities are selling the subject goods at materially low prices. viii. In the anti-dumping investigation concerning the imports of the same product from China PR, Japan and Korea RP, the Authority had made observation that the related importer of Wanhua Chemical Group Co. had made sales in India at losses. ix. In the similar manner, the Authority in the original investigation on the product under consideration from subject countries had noted that the related importer of Sadara Chemicals had incurred losses on sales of the subject goods in India. x. The anti-dumping rules provide that when export price is impacted because of an association between the exporter and the importer, then export price is required to be constructed. The price at which the exporter has sold the product to a related importer cannot be considered. xi. The price at which Covestro Deutschland AG has sold the product to M/s Covestro (India) Private Limited cannot be considered for calculation of net export price. The resale price of the subject goods from China PR may be considered for calculation net export price. xii. The price at which Covestro (India) Private Limited has sold the product in the Indian market should be considered for determination of export price in respect of imports from Covestro Deutschland AG. F.3 Examination by Authority 30. 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 as determined in accordance with the rules made under sub-section (6); or 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 profit, as determined in accordance with the rules made under sub-section 6); b) 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 transshipped through the country of export or such article is not produced in the country of export oi 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. 31. The Authority sent questionnaires to the known producers/exporters from the subject country, advising them to provide information in the form and manner prescribed by the Authority. The following producers and exporters from the subject countries, along with their related entities in India, have filed the prescribed questionnaire responses. i. M/s BorsodChemZrt, Hungary, European Union ii. M/s Covestro Deutschland AG, Germany, European Union iii. M/s Sadara Chemical Company, Saudi Arabia iv. M/s Dow Saudi Arabia Product Marketing B.V v. M/s Dow Chemical Pacific (Singapore) Private Limited vi. M/s Saudi Basic Industries Corporation, Saudi Arabia (SABIC) vii. M/s SABIC Asia Pacific Pvt. Ltd. (SAPPL) 32. The normal value and export prices for all the producers/exporters from the subject countries have been determined as below at para 59: EUROPEAN UNION i. M/s Borsod ChemZrt 33. M/s Borsod ChemZrt (“Borsod”) is a private limited company limited by shares established under Hungarian law. It is noted from the exporter’s questionnaire response that in the domestic market, Borsod has sold to both related and unrelated customers. The information has been provided on the related party sales to unaffiliated customers. For exports to India, Borsod has sold the subject goods only to its related parties, namely, Wanhua International (India) Private Limited which has further resold the goods in the Indian market. ➢ Normal Value 34. BorsodChemZrt has submitted Exporter’s Questionnaire response furnishing the required information. Authority notes that during the POI, BorsodChemZrt, has sold ***MT of subject goods at invoice price of Euro ***/MT directly to unrelated customers in the domestic market. BorsodChemZrt, has also sold ***MT of subject goods at invoice price of Euro ***/MT through its related company, Wanhua BorsodChem Italia S.R.L., Italy. BorsodChemZrt has provided details of sales made in the domestic market to unrelated customers, details of sales made in the domestic market to its related party and details of resale price of the related party to independent customers. It is noted that domestic sales are in sufficient quantity in the domestic market. 35. In order to determine the normal value, the authority conducted the ordinary course of trade test to determine profit making domestic sales transactions with reference to cost of production of subject goods. In case profit making transactions are more than 80% then the authority has considered all the transactions in the domestic market for the determination of the normal value. Where the profitable transactions are less than 80%, only profitable domestic sales are taken into consideration for the determination of normal value. Based on the ordinary course of trade test, profitable sales have been taken into account for determination of normal value, since the profitable sales were less than 80%. 36. BorsodChemZrt has claimed adjustments on account of insurance, inland transportation, credit cost, packing cost and other related expenses. The Authority has allowed the adjustments as claimed after desk verification, and accordingly determined the normal value at ex-factory level. The ex-factory normal value so determined has been mentioned in the dumping margin table at para 59. ➢ Export Price 37. During the POI, BorsodChemZrt has exported the subject goods to its Indian related company, Wanhua International (India) Pvt Ltd, which has in turn resold the subject goods to unrelated customers in India. BorsodChemZrt and Wanhua International (India) Pvt Ltd have provided the relevant information in the requisite formats. 38. It is noted from the response submitted by the related Indian importer that the subject goods imported from BorsodChem Zrt were resold at a loss in the Indian market during the POI. Accordingly, the Authority has made appropriate adjustment for the loss incurred by the related importer to arrive at the net export. BorsodChemZrt has claimed adjustments on account of ocean freight, inland transportation, port related expenses, insurance, credit cost and packing expenses and the same have been allowed by the Authority after due verification. The ex-factory export price as determined is given in the dumping margin table at para 59. ii. M/s Covestro Deutschland AG 39. M/s. Covestro Deutschland AG (“Covestro Germany”) is a stock corporation company registered and established under German Company Laws. It is noted from the exporter’s questionnaire response that in the domestic market, Covestro Germany has sold to Covestro International SA and Covestro S.R.L. The information has been provided on the related party sales to unaffiliated customers. For exports to India, Covestro Germany has sold the subject goods only to its related parties, namely, Covestro India Private Limited`. Covestro India Private Limited has consumed the imported product for captive purpose. There are no sales to any unaffiliated party in India. ➢ Normal Value 40. Covestro Deutschland AG has submitted Exporter’s Questionnaire response furnishing the required information. Authority notes that during the POI, Covestro Deutschland AG, has sold the subject goods directly to unrelated customers in the domestic market and also through related entities. Covestro Deutschland AG has provided details of sales made in the domestic market to unrelated customers, details of sales made in the domestic market to its related parties and details of resale price of the related parties to independent customers. It is noted that domestic sales are in sufficient quantity in the domestic market. 41. In order to determine the normal value, the authority conducted the ordinary course of trade test to determine profit making domestic sales transactions with reference to cost of production of subject goods. In case profit making transactions are more than 80% then the authority has considered all the transactions in the domestic market for the determination of the normal value. Where the profitable transactions are less than 80%, only profitable domestic sales are taken into consideration for the determination of normal value. Based on the ordinary course of trade test, profitable sales have been taken into account for determination of normal value, since the profitable sales were less than 80%. 42. Covestro Deutschland AG has claimed adjustments on account of insurance, transportation, credit cost and packing cost. The Authority has allowed the adjustments as claimed and verified and accordingly determined the normal value at ex-factory level. The ex-factory normal value so determined has been mentioned in the dumping margin table at para 59. ➢ Export Price 43. During the POI, Covestro Deutschland AG has exported the subject goods to its Indian related entity, Covestro (India) Pvt Ltd, which has consumed the subject goods to manufacture value added products in India. Covestro Deutschland AG and Covestro (India) Pvt Ltd have provided the relevant information in the requisite formats. 44. Covestro Deutschland AG has claimed adjustments on account of ocean freight, inland transportation, port related expenses, insurance, credit cost and packing expenses (wherever applicable) and the same have been allowed by the Authority after desk verification. The ex-factory export price as determined is given in the dumping margin table at para 59. iii. Non- cooperating producers/exporters 45. The normal value and export price for all other non-cooperating producers and exporters of European Union have been determined as per facts available considering the data provided by the co-operating exporters and the same is mentioned in the dumping margin table at para 59. SAUDI ARABIA 46. In response to the initiation of the subject investigation, following producers/exporters from Saudi Arabia have responded by filing questionnaire response: - a.M/s Sadara Chemical Company, Saudi Arabia b. M/s Dow Saudi Arabia Product Marketing B.V c.M/s Dow Chemical Pacific (Singapore) Private Limited d. M/s Saudi Basic Industries Corporation, Saudi Arabia (SABIC) e.SABIC Asia Pacific Pvt. Ltd. (SAPPL) 47. Dow Chemical International Private Limited (‘DCIPL’) has also filed the importer’s questionnaire response. 48. Accordingly, the Authority has determined the normal value, export price and dumping margin in respect of various producers/exporters of the subject country as follows at para 59: ➢ Normal value 49. SABIC and Sadara are related companies. Sadara has a marketing agreement with SABIC, whereby SABIC sells the goods produced by Sadara in the domestic market. SABIC charges a marketing fee from Sadara for sales of the subject goods. SABIC thereafter resells the subject goods produced by Sadara to unrelated customers in the domestic market. SABIC has sold *** MT of the subject goods produced by Sadara in the domestic market. 50. To arrive at the ex-factory normal value, the Authority has deducted the inland and credit cost incurred by SADARA for sales to SABIC, and land transport, insurance, storage charges, inspection charges, and other expenses incurred by SABIC for sales to unrelated customers in Saudi Arabia. The adjustments claimed by both Sadara and SABIC have been verified after desk verification and have been accepted wherever appropriate. 51. To determine the normal value, the Authority conducted the ordinary course of trade test to determine the profit-making domestic sales transactions with reference to cost of production of SADARA and SGA expenses of both Sadara and SABIC. Since less than 80% of domestic sales were profitable, the normal value is determined based on ex-factory selling price of the profitable sales only. 52. The normal value determined is provided in the dumping margin table at para 59. ➢ Export Price 53. Sadara has sold the subject goods to Dow Marketing and SABIC affiliated entities for exports to India under the Product Marketing and Lifting Agreements. During the POI, Sadara has sold ***MT of subject goods to Dow Marketing and the remaining *** MT of subject goods to SABIC, for exports to India. 54. During the POI, Dow Marketing has sold ***MT of subject goods to Dow Singapore at a value of ***USD. Thereafter, Dow Singapore re-sold ***MT of the subject goods to DCIPL for captive consumption at sales price of *** USD. Since Dow has sold the subject goods at loss, the export price has been computed at the sales price of Dow Singapore to India, after deducting all post sales expenses incurred by Sadara and Dow entities, namely, inland freight, port and other expenses, credit cost, ocean freight and insurance. 55. Sadara has exported *** MT of the subject goods to India through SABIC. SABIC has sold *** MT of the subject goods to SAPPL at a value of *** USD. The remaining *** MT of the subject goods sourced by Sadara were sold to an unrelated trader i.e. Radius Global DMCC for exports to India who has not participated in the investigation. Since Radius Global DMCC has not filed the questionnaire response, the Authority has considered data of Radius Global DMCC on facts available basis for present determination. 56. SAPPL resold ***MT of the subject goods to unrelated customers in India at a value of *** USD. Sales of both SABIC and SAPPL were profitable. The export price has been computed at the sales price of SAPPL to India, after deducting all post sales expenses incurred by SADARA, SABIC and SAPPL, including, inland freight, bank charges, documentation and inspection charges, insurance, credit cost, and ocean freight. 57. Based on above, the weighted export price of Sadara is determined on the basis of overall sales to India through Dow, SABIC and Radius Global DMCC, as reflected in the dumping margin table at para 59. i. Non- cooperating producers/exporters 58. The normal value and export price for all other non-cooperating producers and exporters of Saudi Arabia have been determined as per facts available considering the data provided by the co-operating exporters and the same is mentioned in the dumping margin table at para 59. Dumping margin 59. Based on normal value and export price is determined as above, the dumping margin has been determined below. SN | Particulars | Normal Value | Export Price | Dumping Margin | Dumping Margin | Dumping Margin ---|----------------------------|--------------|--------------|----------------|----------------|--------------- | | (USD/MT) | (USD/MT) | (USD/MT) | % | Range A | European Union | | | | | 1 | BorsodChem Zrt., | *** | *** | *** | *** | 90-100% 2 | Covestro Deutschland AG | *** | *** | *** | *** | 20-30% 3 | Any other | *** | *** | *** | *** | 110-120% B | Saudi Arabia | | | | | 1 | Sadara Chemical Company, | *** | *** | *** | *** | 50-60% 2 | Any other | *** | *** | *** | *** | 60-70% 60. It is seen that the product has been exported to India at significantly dumped prices. G. ASSESSMENT OF INJURY AND CAUSAL LINK. G.1. Submission of the other interested parties. 61. The other interested parties have made the following submissions with regard to injury and causal link: i. Domestic industry’s products cannot be lying unsold as it was running at 125-145% of the capacity. No entity would produce a product at maximum capacity with a favourable market condition and yet remain in losses. ii. The domestic industry is claiming that they are suffering from unprecedented injury and still exporting to more than 70 countries. In such scenario, the claim that it can meet even 60-80% of the domestic demand is implausible. iii. The data of the domestic industry shows that there is no volume effect, price effect or injury due to subject imports, and therefore there is no likelihood of continuation of injury. iv. The price movement of imports from subject countries is in tandem with the movement in selling price of the domestic industry. v. All suppliers in the market, including the domestic industry and exporters from subject countries are subject to the same global price trends, which is determined based on the global supply-demand dynamics, raw material costs, and other market factors. vi. The domestic sales over the injury period have increased by 60% and the demand increased by 64%. The correlation demonstrates that the domestic industry has maintained its market position. vii. The domestic industry has demonstrated the ability to increase production and sales in line with growing market demand. viii. The subject imports have shown a 35% decrease in the market share of subject imports. ix. The volume of exports from Saudi Arabia have remained more or less constant historically despite the levy of anti-dumping duty. x. The annual reports published by the domestic industry show growth and absence of any injury and constitute a clear acknowledgment of improved performance and profitability, conditions incompatible with existence of injury. xi. The domestic industry has installed a new power generation system for captive use at Dahej plant which shows ongoing capital investment for operational improvements. xii. The annual report also reveals an extensive pattern of plant shutdown that has directly impacted production, sales, and financial performance. xiii. The frequency of plant shutdowns experienced by the domestic industry far exceeds the claimed industry norm. The Authority should address these unusual shutdowns while performing the non-attribution analysis. xiv. The Authority should also analyse that the reduced capacity of the domestic industry is as a result of the technical difficulties while analysing the growth or decline in capacity and capacity utilization during the injury analysis period. xv. Despite existence of anti-dumping duty on the imports from subject countries as well as from China, Japan and Korea, and a slight decrease in the prices of the primary raw material, the domestic industry still incurred heavy losses on the sale of the subject goods, which only reinforces that the losses is due to technical difficulties. xvi. The productivity of the domestic industry increased 18% over the injury period. xvii. The financial report (2021-2022 and 2022-2023) and the investor's conference call of the domestic industry shows that the plant often suffers from technical glitches which constrains production and causes financial loss to the domestic industry. xviii. As per the financial statement 2023-2024, the prices of toluene, a significant raw material, has decreased. xix. The losses incurred by the domestic industry correspond to the years in which the production plants of the domestic industry faced technical glitches. xx. There is significant variance between the cost of sales and profits of the domestic industry between the years 2022-2023 and the POI without a commensurate variance in the import volume for the said periods. xxi. It is an undisputed fact that the plant shutdowns remain a recurring challenge in the domestic production of TDI. In such circumstances, the criticality of imports to maintain supply stability becomes self-evident. xxii. A substantial increase in the cost of sales for 2022-23 is attributable to higher fixed costs on account of plant shutdown. xxiii. The losses of the domestic industry continued to increase despite there being a decrease in the volume of imports and a decrease in the price of raw materials. xxiv. An increase in imports is due to a demand-supply gap. Thus, injury due to the increase in imports into India can’t be claimed. xxv. Inventory, production, capacity utilization, and sales volume of the domestic industry have increased in period of investigation as compared to 2020-2021. Whereas export sales have declined significantly. xxvi. The price undercutting due to imports of subject goods from the subject countries is negative. xxvii. The injury margin claimed by the domestic industry is exaggerated because the domestic industry has considered the landed price without adding the anti-dumping duty. xxviii. The market share of imports of subject goods from the EU in demand is insignificant. xxix. Price suppression/depression is inflated due to abnormal increase in cost of sales. xxx. Price suppression cannot be attributed to imports unless it is shown that the subject imports forced the domestic industry to reduce prices or prevented it from increasing prices. In the present case, the domestic industry's own price increased over most of the injury period. xxxi. Cost undercutting is not a factor of injury under Annexure II of the AD Rules. The AD Rules refer to volume and price effects including price undercutting and not cost undercutting. xxxii. The increase in cost of sales is abnormal since the increase in raw material price for Toluene has a limited impact on the overall cost of sales. Toluene accounts for ***% of the total production cost. xxxiii. The Authority should conduct a detailed comparison of raw material costs, including Toluene, and other manufacturing expenses over the period of investigation and the preceding injury analysis period. xxxiv.The capacity of the domestic industry should be taken as per annual report and not as per the pollution control board certificate. xxxv. The domestic industry has projected ***% as increase in price of toluene, whereas in reality the increase in price of toluene has been ***%. xxxvi.Dahej plant of the domestic industry is defective which has caused frequent shutdown. No such frequent shutdown for prolonged periods is ever witnessed at Bharuch plant which is an old plant. This can also be evidenced from the gas leak instances of 2014, 2016 and 2018. xxxvii. For fair comparison, the Authority should compare the landed value of imports with the cost of sales for Bharuch plant of the domestic industry. xxxviii. 80% of the product under consideration exported by Sadara was consumed by DCIPL for production of downstream products. Thus, does not impact the domestic industry. The Authority should undertake analysis after deducting the product under consideration for captive consumption. xxxix.The fertiliser segment of the company is incurring massive losses. Thus, domestic industry's ability to make capital investments is not impacted at all or impacted by the losses incurred in the fertilizer segment. xl. The domestic industry does not manufacture ODCB-free TDI, which is essential for REACH- compliant exports to Europe. Thus, levy of duty is disadvantageous as domestic industry is not supplying the technical grades required by end-users. xli. The domestic industry contradicts its previous claim by stating that plant shutdown is carried out after every 2-3 years. In the application, it has been claimed that plant shutdowns are carried out every 3-4 years by all producers globally. xlii. The imports prices of product under consideration from China PR is dictated by minus/market minus method whereas the imports prices from Germany are determined based on cost plus method. Thus, there cannot be an apple-to-apple comparison between the import prices from China PR and Germany. xliii. The exported product, TDI- T80, by Covestro Deutschalnd AG is captively used by Covestro India. These imports cannot displace domestic industry’s sale. xliv. The Authority should undertake the volume and price analysis after deducting TDI import volume consumed directly by DCIPL for self-consumption. G.2. Submission of the domestic industry 62. The domestic industry has made the following submissions with regard to injury and causal link: i. TDI industry is highly concentrated with only a few selected groups of companies leading every regional capacity distribution of TDI. ii. The select few leading manufacturers of TDI are Wanhua Group, China, which is BorsodChemZrt in European Union, Covestro Group in China and European Union, Sadara Chemical Company in Saudi Arabia. iii. The plants by these manufacturers have been set up in different zones only to counter the locational disadvantages. iv. All the exporters in the subject countries have related entities in India. Therefore, the import price reported to the Custom in India is not the true reflection of the price at which these exporters are ultimately selling to the unaffiliated customers in India. v. The dumping of the product under consideration has continued even after imposition of duty. This dumping margin is as per the import price declared to the custom. The dumping margin will be much higher if determined at the price on which related parties sell in the domestic market. vi. Though the imports from subject countries increased from base year with only exception is the year 2021-2022, when the imports decreased substantially. However, the domestic industry is not claiming volume injury. vii. The selling price has not increased at the same pace as cost of sales of the domestic industry. This shows that the selling price of the domestic industry is suppressed. viii. The import price is consistently below the cost of sales of the domestic industry. ix. The gap between the landed price of imports and the cost of sales of the domestic industry was highest in 2021-22 and 2022-23 and the domestic industry suffered volume injury. x. The price undercutting remained marginally positive. However, this is not the real price undercutting because of the presence of related party in India and significant fluctuation in the import volume and price in the period of investigation. xi. Production and domestic sales of the domestic industry have increased in the period of investigation. The domestic industry is not claiming volume injury by continued dumping. xii. The domestic industry has in the present case met ***% of the demand and the domestic industry at ***% capacity utilisation could have produced and sold upto ***% of the demand. xiii. Even when the losses increased, the domestic industry increased production with a view to reduce fixed cost per unit. xiv. The profitability has declined consistently over the injury period. The losses were highest in 2022- 2023. xv. The total losses suffered by the domestic industry in the three years of the injury period are more than Rs [***] crores which is almost half of the capital employed in the business. xvi. The domestic industry recorded positive profit before interest, cash profit and a positive return on capital employed in the base year. However, these parameters declined thereafter. xvii. The market share of the applicant has improved but at the cost of significant profitability decline. xviii. The average inventory was highest in the period of investigation. xix. The domestic industry is the sole producer in India. The performance of the product is very poor. The domestic industry is not in a position to raise capital for capacity expansion. xx. On the submission that the user industry is forced to import due to shut down, the domestic industry operates two TDI plants and maintains inventories to ensure consistent supply, even during maintenance shutdowns. xxi. Some shutdowns occurred due to dumping, forcing the domestic industry to suspend production. This highlights the injury suffered by the domestic industry due to dumped imports. xxii. The shifting of dumping from one source to another has not allowed the domestic industry a chance to operate for a reasonably long period with reasonable profits. xxiii. The interested parties argued that the prices of toluene decreased. However, the price of major raw materials and utilities has in fact increased 2022-2023. Thus, the increase in the cost of production in the same year. xxiv. On the submission of the interested parties that the capacity of the domestic industry should be taken as per annual report, the domestic industry has consistently produced at level higher than the production capacity reported in the annual report. xxv. The Panel in European Communities – Anti-dumping duties on Melleable Cast Iron Tube or Pipe Fittings from Brazil [DS 219] held that even if imports from other countries may have contributed to material injury to the domestic industry, such imports are not such to have broken the causal link between dumping and injury. xxvi. On the submission of the interested parties that the annual report of the domestic industry shows long-term investments plan and therefore, it cannot be considered that the domestic industry is injured, the interested parties have relied on the performance of the chemical segment as a whole. The domestic industry produces more than 15 chemical products. xxvii. Even in the event of low volumes of imports reported during the period of investigation of a sunset review, there are number of instances when Indian Authority and foreign Authority have continued the anti-dumping duty. xxviii. On the submission of the interested parties that the domestic industry has not undertaken capacity expansion, the lack of capacity expansion cannot be construed as a lack of intent or inefficiency on the part of the domestic industry, but rather as a direct consequence of the injurious effects caused by dumped imports. xxix. On the submission of the interested parties that the injury to the domestic industry is skewed as the domestic industry has not added the anti-dumping duty on the landed value of the imports, the Injury margin calculation is never considered after adding with anti-dumping duty. xxx. On the submission of the interested parties that the import data submitted by domestic industry is unreliable, the Authority may call upon the import data from DGCI&S or DG Systems and rely on the same for the examination of volume and value of imports. G.3. Examination by the Authority 63. Rule 11 of Antidumping 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 the 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. For the examination of the impact of the dumped imports on the domestic industry in India, indices having a bearing on the state of the industry such as production, capacity utilization, sales volume, inventory, profitability, net sales realization, the magnitude and margin of dumping, etc. have been considered in accordance with Annexure II of the Anti-Dumping Rules. 64. The Authority has taken note of the various submissions made by the domestic industry and other interested parties on injury and causal link and has analyzed the same considering the facts available on record and applicable laws. The injury analysis carried out by the Authority ipso facto addresses submissions made by the domestic industry and other interested parties. 65. In consideration of the various submissions made by the interested parties in this regard, the Authority has examined the current injury, if any, to the domestic industry before proceeding to examine the likelihood aspects of dumping and injury. 66. With regards to submissions made by other interested parties about injury not being suffered by the domestic industry, it is noted that it is not necessary that all parameters of injury should show deterioration. Some parameters may show deterioration, while some others may not. The Authority considers all injury parameters before concluding whether the domestic industry has suffered injury due to dumping or not. The Authority has examined the injury parameters objectively taking into account the facts and arguments submitted by the domestic industry and other interested parties. 67. The other interested parties submitted that domestic industry has exported to more than 70 countries and due to this it is impossible that domestic industry can meet 60-80% of the demand. The Authority notes that it has examined the injury only for the domestic operations. 68. As regards the submission of other interested parties regarding recurring plant shutdown of the domestic industry, the Authority notes the submission of the domestic industry that the plant shutdown is a regular and global occurrence for TDI plants owing to the complex nature of the production process and use of hazardous chemicals and gases. The plant globally also undergoes similar shutdowns to ensure smooth functioning of the plant. The domestic industry has provided shutdown details and it is seen that in some of the years the shutdown was taken due to adverse market conditions as well. The domestic industry has not claimed volume injury and the production reported in the period of investigation is the highest when seen over the injury period. The continuous increase in production contradicts the claims of the other interested parties that the recurring shutdown in the plant is a cause of injury to the domestic industry. Therefore, a decline in the performance in the period of investigation cannot be attributed to the plant shutdown. 69. As regards the submission of other interested parties on the difference in the capacity reported in the pollution control board and the capacity reported in the annual reports, the Authority, on analysis of the monthly production of the domestic industry, notes that the domestic industry has produced more than the name plate capacity mentioned in the annual report which shows that domestic industry can produce at higher level. The Authority has considered the same capacities in the previous investigations as well. 70. As regards the submission of the interested parties that the toluene prices have declined, the Authority has examined the cost of production of the domestic industry. It is seen that while the Toluene prices increased till 2022-23 it has declined marginally in the period of investigation. SN | Particulars | UOM | 2020-21 | 2021-22 | 2022-23 | POI ---|----------------------------|---------|---------|---------|---- 1 | Toluene Cost | Rs/MT | *** | *** | *** | *** 2 | Concentrated Nitric Acid Price | Rs/MT | *** | *** | *** | *** 3 | Natural Gas Cost | Rs/MT | *** | *** | *** | *** 71. As regards the submission of interested parties that the landed value of the imports should be compared with the cost of sales for the Bharuch plant as the Dahej plant of the domestic industry is inefficient, the Authority notes that the contention of the interested parties is contrary to the law and therefore cannot be accepted. There is no basis to compare the cost of production of only one plant with the landed price of imports. The Authority has found from the response of the producers that exports to India are at dumped prices. The injurious effect of the dumped imports is required to be examined on the operations of the domestic industry. Since the domestic industry in the present case has two plants, the injury analysis has been conducted after comparing the cost of production of both the plants. However, in view of these submissions made, the Authority has compared the cost of sales of Bharuch plant with the landed price which is shown below. SN | Particulars | UOM | 2020-21 | 2021-22 | 2022-23 | POI ---|----------------------------------|-------|---------|---------|---- 1 | Cost of sales for Bharuch Plant | ₹/MT | *** | *** | *** | *** 2 | Landed Value | ₹/MT | *** | *** | *** | *** 3 | Difference | ₹/MT | *** | *** | *** | *** | Trend | Indexed | -100 | -223 | -529 | -425 72. It is seen that the landed value of the imported product has been consistently below the cost of sales of the product under consideration even when compared with the cost of sales for the Bharuch plant. 73. With regard to the submission that the injury analysis should be undertaken after excluding the captive imports of DCIPL, the Authority notes that there is no basis for the submission. The injury analysis is required to be undertaken considering all imports into India irrespective where they are consumed irrespective of source. 74. With regard to the submission of the interested parties that anti-dumping duty should be added in the landed price of the imports for calculation of injury margin, the Authority notes that there is no basis for the above submission. The purpose of the injury margin is to examine if an anti-dumping duty lower than dumping would be sufficient to address the injury suffered by the industry. The calculation of injury margin has been undertaken as per the consistent practice which is after including only the basic customs duty on the CIF import price. 75. The Authority has also examined the arguments and counterarguments of the interested parties with regard to injury to the domestic industry. The injury analysis made by the Authority hereunder addresses the various submissions made by the interested parties. G.3.1. Volume effect of the dumped imports a. Assessment of demand/consumption 76. The Authority has determined demand or apparent consumption of the product in India as the sum of domestic sales of the domestic industry, and imports of TDI from all sources. SN | Particulars | UOM | 2020-21 | 2021-22 | 2022-23 | POI (A) ---|------------------------------------|-----|---------|---------|---------- 1 | Sales of the domestic industry | MT | *** | *** | *** | *** | Trend | Indexed | 100 | 117 | 121 | 160 2 | Subject countries import | MT | 15,769 | 10,889 | 10,781 | 13,379 3 | Import from other countries | MT | 17,318 | 26,413 | 38,965 | 43,674 | attracting anti-dumping duties | | | | | 4 | Import from other countries | MT | 1,453 | 4,562 | 4,770 | 722 5 | Total demand | MT | *** | *** | *** | *** | Trend | Indexed | 100 | 119 | 138 | 164 77. It is seen that as compared to 2020-2021, the demand for the product increased in 2021-22, which further increased in 2022-23 and in the period of investigation. The demand has continuously increased over the injury period. b. Imports in absolute and relative terms 78. The information on volume of imports in absolute terms and relative terms over the injury period and in the period of investigation is as below. SN | Particulars | UOM | 2020-21 | 2021-22 | 2022-23 | POI ---|--------------------------------------|---------|---------|---------|---- 1 | Subject countries import | MT | 15,749 | 10,889 | 10,781 | 13,379 i | European Union | MT | 11,609 | 8,249 | 5,155 | 7,742 ii | Saudi Arabia | MT | 4,140 | 2,640 | 5,625 | 5,636 2 | Import from other countries | MT | 17,318 | 26,413 | 38,965 | 43,674 | attracting anti-dumping duties | | | | | 3 | Other Countries | MT | 1,473 | 4,562 | 4,770 | 721 4 | Total | MT | 34,539 | 41,864 | 54,515 | 57,774 5 | Subject imports in relation to: | | | | | i | Indian production | % | *** | *** | *** | *** | Trend | Indexed | 100 | 76 | 71 | 72 ii | Demand | % | *** | *** | *** | *** | Trend | Indexed | 100 | 58 | 50 | 52 iii| Total Imports | % | 46% | 26% | 20% | 23% 79. It is seen that: a. The volume of subject imports from subject countries declined till 2022-23. The imports increased in period of investigation. b. The imports from other countries attracting anti-dumping duty have consistently increased over the injury period. c. The imports from subject countries have also declined in relation to Indian production, Indian demand and total imports. d. The Authority notes that the domestic industry has not claimed injury in the present investigation on account of volume effect. G.3.2. Price effect of dumped imports 80. In terms of Annexure II (ii) of the Rules, with regard to the effect of the dumped imports on prices, the 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 product 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. a. Price undercutting 81. Price undercutting has been determined by comparing the net sales realization of the domestic industry with the landed price of the imports for the period of investigation. The table below shows the price undercutting from the subject countries. SN | Particulars | UOM | European Union | Saudi Arabia | Subject Countries as Whole ---|-----------------------------|--------|----------------|--------------|-------------------------- 1 | Net sales realisation | Rs/MT | *** | *** | *** 2 | Landed price | Rs/MT | *** | *** | *** 3 | Price undercutting | Rs/MT | *** | *** | *** 4 | Price undercutting | % | *** | *** | *** 5 | Price undercutting Range | | Negative | 20-30% | 0-10% SN | Particulars | UOM | BorsodChem Zrt., | Covestro Deutschland AG | Sadara Chemical Company, ---|-----------------------------|--------|------------------|-------------------------|------------------------ 1 | Net sales realisation | Rs/MT | *** | *** | *** 2 | Landed price | Rs/MT | *** | *** | *** 3 | Price undercutting | Rs/MT | *** | *** | *** 4 | Price undercutting | % | *** | *** | *** 5 | Price undercutting Range | | 10-20% | Negative | 20-30% 82. It is seen that the weighted average price undercutting is marginally positive. It is also seen that the landed price of imports is below the cost of sales of the domestic industry and the domestic industry has sold at significant financial losses. The Authority also notes that the present investigation has shown that the related importer of the one of the participating producers of the product under consideration in India has sold the product at losses. b. Price suppression / depression 83. In order to determine whether the dumped imports are depressing the domestic prices and whether the effect of such imports is to suppress prices to a significant degree or prevent price increases which otherwise would have occurred in normal course, the changes in the costs and prices over the injury period, are compared as below. SN | Particulars | UOM | 2020-21 | 2021-22 | 2022-23 | POI ---|------------------|---------|---------|---------|---- 1 | Cost of Sales | ₹/MT | *** | *** | *** | *** | Change | ₹/MT | *** | *** | *** | | Trend | Index | 100 | 149 | 197 | 139 2 | Net Selling Price | ₹/MT | *** | *** | *** | *** | Change | ₹/MT | *** | *** | *** | | Trend | Index | 100 | 122 | 141 | 110 84. It is seen that in the year 2021-2022, the cost of sales of the domestic industry increased by Rs [***] per MT, the selling price has increased by Rs [***] per MT. The domestic industry suffered losses. The cost of sales has further increased in 2022-23 by Rs [***] per MT but the selling price increased only by Rs [***] per MT. The losses increased in the year. The rate of increase in selling price is at lower rate of increase in cost sales of the domestic industry. 85. In the period of investigation, the cost of sales has declined in the period of investigation by Rs [***] per MT, the selling price has declined by Rs [***] per MT. While the decline in the cost of sales was more than the decline in the selling price, the domestic industry continued to suffer losses. 86. Over the injury period, the rate of increase in selling price Rs [***] per MT is much lower than the increase in cost of sales Rs [***] per MT. Therefore, the selling price of the domestic industry are suppressed. 87. The table below shows the landed price of imports, selling price and cost of sales of the domestic industry in the period of investigation. SN | Particulars | UOM | POI ---|---------------------------------|------|---- 1 | Cost of sales of domestic industry | ₹/MT | *** 2 | Selling price of domestic industry | ₹/MT | *** 3 | Landed price of imports | ₹/MT | *** 88. It is seen that the landed price of imports is below the cost of sales of the domestic industry.in the period of investigation. 89. On the basis of above analysis, it is noted that the dumped imports have prevented the domestic industry from increasing its prices in line with the changes in the costs. Therefore, the dumped imports have suppressed the prices of the domestic industry. G.3.4. Impact on economic parameters of the domestic industry 90. Annexure II to the Anti-Dumping Rules requires that the determination of injury shall involve an objective examination of the consequent impact of dumped imports on domestic producers of such products. With regard to consequent impact of dumped imports on domestic producers of such products, the Rules further provide that the examination of the impact of the dumped imports on the domestic industry should include an objective and unbiased 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. a. Capacity, production, capacity utilization and domestic sales 91. Information on capacity, production, capacity utilization and domestic sales over injury period is as follows: SN | Particulars | UOM | 2020-21 | 2021-22 | 2022-23 | POI (A) ---|-----------------------|---------|---------|---------|---------- 1 | Installed capacity | MT | *** | *** | *** | *** | Trend | Index | 100 | 100 | 100 | 100 2 | Capacity utilization | % | *** | *** | *** | *** | Trend | Index | 100 | 91 | 96 | 117 3 | Production | MT | *** | *** | *** | *** | Trend | Index | 100 | 92 | 96 | 118 4 | Domestic Sales | MT | *** | *** | *** | *** | Trend | Index | 100 | 117 | 121 | 160 92. It is seen that: - a.The capacity of the domestic industry has remained the same over the injury period. b. The capacity utilization of the domestic industry declined in 2021-22, but increased in 2022-23 and increased again in the period of investigation. The domestic industry has submitted that capacity utilization was at an optimum level during the period of investigation. When seen over the injury period, the capacity utilisation of the domestic industry has increased. c.The production of the domestic industry declined in 2021-2022, but increased in 2022-2023, and increased again in the period of investigation. When seen over the injury period, the production of the domestic industry has increased. d. The domestic sales of the domestic industry have increased during the entire injury period. e.The domestic industry has claimed that the increase in domestic sales in the injury period was attributable to the fact that the domestic industry had sold at losses. The domestic industry also claimed that an increase in production was done to recover the fixed costs. f.The Authority also notes that the domestic industry has not claimed volume injury. b. Market share 93. Information on market share of imports and the domestic industry over the period was as follows: SN | Market share of | UOM | 2020-21 | 2021-22 | 2022-23 | POI (A) ---|--------------------------------------|---------|---------|---------|---------- 1 | Domestic industry | % | *** | *** | *** | *** | Trend | Index | 100 | 98 | 88 | 98 3 | Share of subject countries imports | % | *** | *** | *** | *** | Trend | Index | 100 | 58 | 50 | 52 3 | Imports from other countries | % | *** | *** | *** | *** | attracting duty | | | | | | Trend | Index | 100 | 128 | 163 | 154 4 | Share of other countries imports | % | *** | *** | *** | *** | Trend | Index | 100 | 260 | 235 | 30 94. It is seen that: - a.The market share of the domestic industry remained similar in the entire injury period except in 2022-2023, when the share of the domestic industry declined. b. The market share of imports from the subject countries has declined till 2022-23 and recorded marginal increase in the period of investigation. c.The market share of imports from the non-subject countries attracting duties have increased in 2021-2022, increased further in 2022-2023 and declined in period of investigation. However, the share in the period of investigation remained higher than the base year. d. The Authority notes that the domestic industry has not claimed volume injury. c. Profitability, cash profits and return on investment 95. Information on profitability, return on investment and cash profits is as follows: SN | Particulars | UOM | 2020-21 | 2021-22 | 2022-23 | POI (A) ---|-------------------------|---------|---------|----------|----------|---------- 1 | Profit/(Loss) | ₹/MT | *** | *** | *** | *** | Trend | Index | 100 | -1,075 | -2,318 | - 1,148 2 | Profit/ (loss) | ₹ Lakhs | *** | *** | *** | *** | Trend | Indexed | 100 | -1,259 | -2,809 | -1,843 3 | PBIT | ₹/MT | *** | *** | *** | *** | Trend | Index | 100 | -923 | -1,990 | -981 4 | Profit before interest and | ₹ Lakhs | *** | *** | *** | *** | tax | | | | | | Trend | Indexed | 100 | -1,081 | -2,411 | -1,575 5 | Cash Profit | ₹/MT | *** | *** | *** | *** | Trend | Index | 100 | -44 | -208 | -74 6 | Cash Profit | ₹ Lakhs | *** | *** | *** | *** | Trend | Indexed | 100 | -51 | -252 | -119 7 | ROCE | % | *** | *** | *** | *** | Trend | Index | 100 | -1,071 | -2,537 | -1,633 96. The domestic industry was in profits in 2020-21. The profits turned into losses in 2021-22. The losses increased in 2022-23 but declined in the period of investigation. Even when losses declined in POI, the same were still higher than 2021-22. 97. The domestic industry has earned profit before tax, cash profit and a positive return on capital employed in the base year. Thereafter, the domestic industry incurred losses even before interest and depreciation. The profit before interest and cash profit are negative in the period of investigation. The return on capital employed of the domestic industry is significantly negative in the period of investigation. d. Inventories 98. Information on inventories is as follows: SN | Particulars | UOM | 2020-21 | 2021-22 | 2022-23 | POI (A) ---|---------------------|---------|---------|---------|---------- 1 | Opening inventory | MT | *** | *** | *** | *** | Trend | Indexed | 100 | 526 | 392 | 625 2 | Closing inventory | MT | *** | *** | *** | *** | Trend | Indexed | 100 | 74 | 119 | 111 3 | Average inventory | MT | *** | *** | *** | *** | Trend | Indexed | 100 | 147 | 162 | 193 99. It is seen that the average inventory of the domestic industry has increased over the injury period. e. Employment, wages and productivity 100. Information on employment, wages and productivity over the injury period is as under: SN | Particulars | UOM | 2020-21 | 2021-22 | 2022-23 | POI (A) ---|--------------------------|---------|---------|---------|---------- 1 | No of employees | Nos | *** | *** | *** | *** | Trend | Index | 100 | 98 | 95 | 90 2 | Salary & Wages | ₹ Lacs | *** | *** | *** | *** | Trend | Index | 100 | 105 | 110 | 124 3 | Productivity per day | MT/Days | *** | *** | *** | *** | Trend | Index | 100 | 92 | 96 | 118 4 | Productivity per employee | MT/Nos | *** | *** | *** | *** 101. The productivity of the domestic industry has moved in line with production. While wages paid have increased, number of employees has declined. f. Growth 102. The information on growth is provided below: - SN | Particulars | Unit | 2021-22 | 2022-23 | POI ---|-------------|-------|---------|---------|---- 1 | Capacity | Y/Y | 0% | 0% | 0% 2 | Production | Y/Y | -8% | 5% | 23% 3 | Sales | Y/Y | 17% | 3% | 32% 4 | Market share | Y/Y | 0% | -18% | 20% 5 | Profit/loss | Y/Y | -1359% | -123% | 34% 6 | Cash profit | Y/Y | -151% | -389% | 53% 7 | ROCE | Y/Y | -1171% | -137% | 36% 103. The growth of the domestic industry during the period of investigation and preceding year has been negative on various price parameters as compared to earlier years. g. Ability to raise capital investment 104. It is seen that there is demand and supply gap in the country. It is also noted that the profitability and return on capital employed of the domestic industry has declined. The domestic industry was earning losses during the period of investigation as well as in the preceding injury analysis period. Therefore, the ability to raise capital investment has been impacted which has prevented the domestic industry from expanding its capacity. It is also seen that despite the imports of the product attracting measures, no other producer has invested in the product. h. Factors affecting domestic prices 105. Examination of import price shows that the import price from the subject countries is below the cost of sales of the domestic industry. As imports from the subject countries continue at dumped prices, the domestic industry has been unable to align its prices in line with the changes in the cost of sales. The fact that the imports are entering Indian market below the selling price of the domestic industry and the domestic industry has suffered significant decline in the profitability itself establishes the adverse impact of the continued dumped imports. Therefore, the imports from the subject countries have affected the prices of the domestic industry. i. Margin of dumping 106. It is seen that there is continued dumping of the subject goods in India from European Union and Saudi Arabia. j. Conclusions on injury 107. Based on the above analysis, the Authority concludes as follows a. The volume of subject imports from subject countries declined till 2022-23 but increased in period of investigation. b. The imports from subject countries have also declined in relation to Indian production, Indian demand and total imports. c. The domestic industry has not claimed volume injury in the present investigation in the form of possible adverse effects of imports on production, sales, capacity utilization, market share of the domestic industry. d. Weighted average price undercutting determining on the basis of CIF import prices is marginally positive. However, it is seen that the related importer of the one of the participating producers of the product under consideration has sold the product at losses in Indian market. e. The landed price of imports is below the cost of sales of the domestic industry. f. Dumped imports have prevented the domestic industry from increasing its prices in line with the changes in the costs. The dumped imports have suppressed the prices of the domestic industry. g. The domestic industry has sold the product at significant financial losses. h. The capacity utilisation of the domestic industry has increased. The domestic industry has submitted that capacity utilization was at an optimum level during the period of investigation. i. The production and domestic sales of the domestic industry has increased over the injury period. The increase in domestic sales in the injury period was attributable to the fact that the domestic industry had sold at losses. The Authority also notes that the domestic industry has not claimed volume injury as the impact of dumped imports on the domestic industry. j. The market share of imports from the subject countries has declined till 2022-23 and recorded marginal increase in the period of investigation. k. The market share of imports from the non-subject countries attracting duties have increased in 2021-2022, increased further in 2022-2023 and declined in period of investigation. l.The domestic industry was in profits in 2020-21. The profits turned into losses in 2021-22. The losses increased in 2022-23 but declined in the period of investigation. Even when losses declined in POI, the same were still higher than 2021-22. Further, the domestic industry has suffered financial losses in the most of the injury period. m. The profit before interest, cash profit and return on capital employed of the domestic industry is significantly negative in the period of investigation n. Average inventory of the domestic industry has increased over the injury period. o. The growth of the domestic industry during the period of investigation and preceding year has been negative on various price parameters compared to earlier years. p. The fact that the imports are entering Indian market below the cost of the domestic industry and the domestic industry has suffered significant decline in the profitability itself establishes the adverse impact of the continued dumped imports on the domestic industry. q. There is continued dumping of the subject goods in India from European Union and Saudi Arabia. 108. The Authority notes that in view of the continued and intensified dumping of the product, the domestic industry has suffered continued injury. H. LIKLIHOOD OF CONTINUATION OR RECURRENCE OF INJURY H.1. Submissions made by other interested parties 109. The other interested parties have made the following submissions with regard to likelihood: i. The Authority should not assess the likelihood of injury by cumulating imports from the EU and Saudi Arabia, and imports need to be assessed separately, in the same way as it treated Chinese Taipei and the UAE at the initiation stage. ii. Imports from European Union have remained stable, and the import price from subject countries (CIF) increased consistently. iii. Imports from the EU will continue to be at a high price since imports into India would be necessary due to the demand-supply gap, and there is no incentive for exporters to reduce export prices to India. iv. The domestic sales, export sales to other countries and captive consumption of subject goods for the exporters from European Union constitutes more than 98% and exports to India account for less than 2% of the total sales during the period of investigation. This indicates that exporters have no intention to increase exports to Indian market. v. The share of imports of other countries attracting anti-dumping duty has increased, whereas the share of imports of subject goods from the EU has declined. vi. The domestic industry has not provided any substantive information regarding the likelihood of an increase in imports or the likelihood of injury. vii. There is no increase in capacity by the exporters during the injury investigation period. viii. Exporters do not have substantial surplus capacity to increase production of subject goods for exporting to India if the anti-dumping duty expires. ix. Exporters have substantial sales in the domestic market and other countries. Exporters also uses the product for captive consumption. x. The volume of imports from subject countries increased marginally in comparison to the demand. Whereas imports from non-subject countries have increased at a pace that surpasses both the demand as well as sales volume expansion of the domestic industry. xi. The imports from subject countries have declined in relation to Indian production, demand as well as overall imports. xii. The claim that there are excessive production capacities in subject countries is incorrect. xiii. The authority must determine the accuracy of the claims regarding global capacity and demand of the Product under consideration. xiv. The global capacity is not relevant for the purpose of determining likelihood of dumping and injury to the domestic industry. xv. Termination of duty after five years of imposition is a rule and extension is an exception. xvi. The contention of the domestic industry that the enhancement of duty is warranted on the ground of increase in cost and price of the product is incorrect. The enhancement duty shall be based on an increase in injury margin. xvii. The data on record does not support an increased quantum of duty. The injury margin is negative for at least one major exporter from European Union, and no present or future injury has been demonstrated in relation to the subject imports. xviii. The claim that Anti-dumping Rules permits modification and enhancement of duty in a sunset review is incorrect and there can only be two outcomes of the investigation, which is either termination or continuation. xix. The product under consideration is limited to TDI with isomer content of 80:20, the Authority should not account the overall production capacity of TDI for likelihood analysis. xx. Third country export data is not conclusive for likelihood analysis. In case third country export data is relevant for likelihood analysis, Sadara undertakes to furnish the same as and when sought by the Authority. H.2. Submission made by the domestic industry 110. The domestic industry has made the following submissions with regard to likelihood: i. The issue of cumulative assessment of the impact of imports from subject countries has already been settled in the original investigation and thus, may not require re-examination. In addition, barring mere statements, no reason has been provided as to justify why cumulation is not warranted. ii. Despite measures in force, the imports subject countries are coming at dumped prices severely displacing the profitability of the domestic industry. iii. The losses incurred by the domestic industry is reflective of the fact that the injury is continued despite duty in force. iv. TDI global capacity is around 3510 KT whereas the global demand is only around 2400-2500 KT. v. The producers globally have set up huge capacities, which is far more than the demand and further capacity expansions are taking place. Therefore, there is always significant competition with respect to prices. vi. Capacity in European Union is around 700-800 KT and accounts for 25% of the global TDI capacity. Sadara Chemical has a capacity of around 200 KT. The demand in these countries is far lower than the capacities set up. vii. The demand in European union has seen a consistent decline and the producers in the subject countries are operating at idle capacities. viii. The continuous decrease in demand can be evidenced from the decrease in domestic sale of the participating exporter, Borsod ChemZRT as well as Covestro Deutschland AG, as reported in the Appendix 1 of the Exporter Questionnaire Response. ix. Covestro India Pvt., Ltd. though has not resold the goods produced by Covestro Deutschland AG but nothing prevents the importer from reselling the product in the Indian market in future. x. Covestro Deutschland AG has artificially increased the price of the product under consideration during the period of investigation. xi. Sadara, the major exporter from Saudi Arabia, has not provided third country exports. xii. Continued dumping from the subject countries establishes the need for continued imposition of anti-dumping duty. xiii. On the submission of the interested parties that imports from other countries have increased, the injury is admittedly also due to the imports from China and Korea. However, the Authority is required to consider whether dumped imports from subject countries are likely to cause injury in case of cessation of anti-dumping duty. xiv. Sadara Chemical Company has also not provided information on exports to third countries in its Part II of the exporter questionnaire response. xv. The import price of Covestro Deutschland Ag has been consistently below the import price from Borsodchem Zrt. It was only in the period of investigation that Covestro Deutschland Ag has artificially increased its prices. xvi. Covestro Deutschland AG and Covestro Polymers (China) Co., Limited are part of the same group and therefore, their prices should move in tandem. A comparison between the prices of Covestro Deutschland AG and Covestro China clearly indicates that Covestro Deutschland AG's prices are higher. Covestro India Pvt. Ltd. procured the product for captive consumption. Given this, Covestro India Pvt. Ltd. could have sourced the product from Covestro China at a lower cost. xvii. It is evident that the import price from Covestro Deutschland AG has been artificially inflated. The producer was likely aware of the impending sunset review and accordingly raised prices. xviii. While in the period investigation Covestro India Pvt. Ltd. has not resold, the goods produced by Covestro Deutschland AG, nothing prevents the importer from reselling the product in the Indian market. The importer was infact reselling the product in the Indian market in the original investigation H.3. Examination by the Authority 111. The present investigation is a sunset review of duties imposed on the imports of the product under consideration from European Union and Saudi Arabia. Under the 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. 112. The argument of the interested parties regarding the modification or change in form of duty was considered. The Authority in the past investigations, after looking at the facts and circumstances, has continued or enhanced the duty as well changed the form of the duty. 113. 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 Rule, and other relevant factors brought on record by the interested parties. 114. There are no specific methodologies available to conduct such a likelihood analysis. However, Clause (vii) of Annexure II of the Rules provides, inter alia for factors which are required to be taken into consideration, 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. 115. The Authority has, inter alia, considered the above requirements and following parameters in order to determine whether dumping is likely in the event of cessation of anti-dumping duty, and if so, whether the same is likely to cause injury to the domestic industry in case of cessation of anti- dumping duty. Additionally, the Authority has examined all the relevant information brought on record by the domestic industry and the other interested parties. a. Imports from subject countries 116. The table below shows the information regarding imports from the subject countries. SN | Particulars | UOM | 2020-21 | 2021-22 | 2022-23 | POI (A) ---|---------------------------------------|-----|---------|---------|---------- 1 | Subject countries import | MT | 15,749 | 10,889 | 10,781 | 13,379 | Saudi Arabia | MT | 11,609 | 8,249 | 5,155 | 7,742 | European Union | MT | 4,140 | 2,640 | 5,625 | 5,636 2 | Imports from countries | MT | 17,318 | 26,413 | 38,965 | 43,674 | attracting duties | | | | | | China | MT | 7,878 | 8,253 | 16,007 | 18,774 | Japan | MT | 3,900 | 5,620 | 8,558 | 18,280 | South Korea | MT | 5,540 | 12,540 | 14,400 | 6,620 117. It is seen that the volume of imports from the subject countries declined first, but then increased. b. Freely disposable capacity 118. The tables below show the information regarding capacity and production of the participating producers from Saudi Arabia and European Union. SN | Particulars | UOM | Borsod | Covestro | Sadara | Total ---|--------------|-----|--------|----------|--------|---- 1 | Capacity | MT | *** | *** | *** | *** 2 | Production | MT | *** | *** | *** | *** 3 | Idle capacity | MT | *** | *** | *** | *** 4 | Idle capacity | % | *** | *** | *** | *** 5 | Idle capacity Range | | 10-20% | 30-40% | 10-20% | 20-30% 119. It is seen that the producers in the subject countries are operating with significantly high idle capacities. The idle capacities for Borsod and Sadara are in the range of 0-20% whereas it is in the range of 30-40% in case of Covestro. The idle capacity of Covestro alone is almost equal to the demand in the country. c. Export orientation of the producers in the subject countries 120. The table below shows the information on the production and exports of the participating producers form Saudi Arabia and European Union. SN | Particulars | UOM | Borsod | Covestro | Sadara | Total ---|------------------|-----|--------|----------|--------|---- 1 | Production | MT | *** | *** | *** | *** 2 | Exports total | MT | *** | *** | *** | *** 3 | Export orientation | % | *** | *** | *** | *** 4 | Export orientation Range | | 35-45% | 35-45% | 75-85% | 45-55% 121. It is seen that a significant share of production has been used for export purposes. This shows that the producers in the subject country have set up capacities which are far higher than domestic demand and are utilizing these capacities for export purposes. On cumulative basis, more than 50% of the production of the three producers is for export purposes, with some countries such as Saudi holding very high export orientation. d. Business nature of the participating producers 122. The domestic industry has contended that prior to 2017-18, India was not an important market for the producers in the subject countries because imports were taking place largely from China and Korea. After imposition of measures, the Chinese producers changed their operations and started exporting the product from the European market. The Chinese imports declined and the imports from Europe increased. As the measures were imposed on European imports, the Chinese producers again shifted back to their Chinese plants for catering the demand in the Indian market. 123. The Authority has examined the information. It is seen that both the participating producers from European Union have related entities in China who are involved in the production of the subject goods. The imports of the related entities are at present subject to anti-dumping measures. The total import volume of the group as per DG System is produced below. SN | Particulars | UOM | 2020-21 | 2021-22 | 2022-23 | POI ---|--------------------|---------|---------|---------|---- A | Covestro Group | MT | *** | *** | *** | *** | Trend | Index | 100 | 73 | 113 | 133 1 | China | MT | *** | *** | *** | *** | Trend | Index | 100 | 119 | 243 | 295 2 | European Union | MT | *** | *** | *** | *** | Trend | Index | 100 | 41 | 23 | 23 B | Wanhua | MT | *** | *** | *** | *** | Trend | Index | 100 | 121 | 111 | 160 1 | China | MT | *** | *** | *** | *** | Trend | Index | 100 | 61 | 115 | 111 2 | European Union | MT | *** | *** | *** | *** | Trend | Index | 100 | 163 | 109 | 194 124. It is seen that the exports of Covestro Group from Europe have declined while that of exports from China has increased. Covestro India Private Limited, the related entity in India, has imported from both sources. While the related entity has captively consumed the product imported from European Union, the product imported from China has been resold in the domestic market. The Authority notes that in the original investigation, it was found that Covestro India Private Limited was involved in trading of the product from European Union as well. 125. Similarly, it is also seen that Borsod Chem has a related entity in China, Wanhua Chemicals which is engaged in the production of the product under consideration. Wanhua International (India) Pvt Ltd. is the related entity in India and imported from both sources. The related entity has imported from both sources and has resold the product in the Indian market to unaffiliated customers. It is seen that the imports from both the sources have seen an increase. e. Depressing or suppressing effect of imports on domestic prices 126. The table below shows a comparison between the import price and the cost of sales of the domestic industry. SN | Particulars | UOM | 2020-21 | 2021-22 | 2022-23 | POI (A) ---|-----------------------------------|-------|-----------|-----------|-----------|---------- 1 | Cost of Sales | ₹/MT | *** | *** | *** | *** | Trend | Indexed | 100 | 149 | 197 | 139 2 | Landed price from subject countries | ₹/MT | 1,27,147 | 1,70,403 | 2,13,794 | 1,78,752 | Trends | Indexed | 100 | 134 | 168 | 141 127. It can be seen that the cost of sales of the domestic industry has been continuously higher than the landed price during the injury period. The imports are entering the Indian market at a price which is below the cost of sales of the domestic industry. When the imports are priced below the cost of sales of the domestic industry, it is evident that they are likely to have a suppressing or depressing impact on the prices of the domestic industry. f. Third country prices attractiveness 128. The Authority has examined the information with regard to exports to third countries, as provided by the participating producers. The exports to related entities have not been considered for the purpose of the below analysis. Name of producer | Particulars | UOM | Below price in India | Dumped price | Injurious price | Total exports -----------------|----------------|-----|----------------------|--------------|-----------------|-------------- Borsod Chem Zrt | Export volume | MT | *** | *** | *** | *** | Share of exports | % | 0-10% | 90-100% | 90-100% | Covestro Polymers| Export volume | MT | *** | *** | *** | *** | Share of exports | % | 90-100% | 90-100% | 85-95% | Sadara Chemical | Export volume | MT | *** | *** | *** | *** | Share of exports | % | 0-10% | 90-100% | 90-100% | 129. It is seen from the above that more than 90% exports made by each of the participating exporters, to third countries are priced below the normal value and the non-injurious price. Further, on comparison of export price to third countries with the export price to India, it would be seen that less than 1% exports by Borsod Chem Zrt and only 7% of exports by Sadara Chemical are priced below the export price to India. This shows that the export price to India is significantly low, implying that the exporters are selectively exporting the goods to India at low prices. The Authority also notes that in case of Covestro Polymers, more than 90% exports to other countries are priced below export price to India showing the likelihood of significant increase in the exports to India in an event of expiry of measures. g. Conclusions on likelihood of further injury 130. Based on the above analysis, the Authority concludes as follows i. The idle capacities for Borsod and Sadara are in the range of 0-20% whereas it is in the range of 30-40% in case of Covestro. These ideal capacities for Borsod are 1/3rd of demand in India, for Sadara 1/4th of demand in India and for Covestro more than the demand in India. Producers in the subject countries are operating with significantly high idle capacities. ii. On cumulative basis, more than 50% of the production of the three producers is for export purposes, with some countries such as Saudi holding very high export orientation. Producers in the subject country have set up capacities which are far higher than domestic demand and are utilizing these capacities for export purposes. iii. Exports of Covestro Group from Europe have declined while that of exports from China has increased. While the Covestro India Private Limited, has captively consumed the product imported from European Union, the product imported from China has been resold in the domestic market. The Authority notes that in the original investigation, it was found that Covestro India Private Limited was involved in trading of the product from European Union as well. iv. Borsod Chem has a related entity in China, Wanhua Chemicals which is engaged in the production of the product under consideration. Wanhua International (India) Pvt Ltd. is the related entity in India and imported from both sources. The related entity has imported from both sources and has resold the product in the Indian market to unaffiliated customers. It is seen that the imports from both the sources have seen an increase. v. The imports are entering the Indian market at a price which is below the cost of sales of the domestic industry. When the imports are priced below the cost of sales of the domestic industry, it is evident that they are likely to have a suppressing or depressing impact on the prices of the domestic industry vi. More than 90% exports made by each of the participating exporters, to third countries are priced below the normal value and the non-injurious price. vii. In case of Covestro Polymers, more than 90% exports to other countries are priced below export price to India showing the likelihood of significant increase in the exports to India in an event of expiry of measures 131. The Authority concludes that the investigation has shown that there exists sufficient evidence of likelihood of injury to the domestic industry in event of cessation of anti-dumping duty. I. CAUSAL LINK & NON-ATTRIBUTION ANALYSIS 132. 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 133. It is seen that there were imports above de-minimis limits from countries already attracting duties, namely, Japan, China and Korea RP. The table below shows the price of imports from non-subject countries in the injury period. SN | Country | UOM | 2020-21 | 2021-22 | 2022-23 | POI (A) ---|----------------|-----|---------|---------|---------|---------- | Countries subject to present review | | | | | 1 | European Union | MT | 7,841 | 4,175 | 5,059 | 5,904 2 | Saudi Arabia | MT | 2,140 | 980 | 5,000 | 4,672 | Countries attracting duties | | | | | 1 | Japan | MT | 4,380 | 5,820 | 8,778 | 15,948 2 | China | MT | 7,620 | 8,268 | 14,827 | 14,433 3 | Korea RP | MT | 5,120 | 12,280 | 16,560 | 6,363 | Imports from other countries | | | | | 1 | Other Countries | MT | 1,278 | 1,939 | 3,135 | 604 134. It is seen that the imports from Japan, China and Korea RP are also at injurious prices. At present, these countries are also attracting anti-dumping duty. b. Contraction in demand and / or change in pattern of consumption 135. The demand for the product under consideration has increased over the injury period. The investigation has not shown that the demand is likely to decline. Therefore, decline in the demand cannot be a cause of injury to the domestic industry. c. Trade restrictive practices 136. The Authority notes that there is no trade restrictive practice which has caused or is likely to cause injury to the domestic industry. d. Development of technology 137. The Authority notes that information on record shows that technology for production of the product has not undergone any change. Therefore, technology cannot be a cause of injury to the domestic industry. e. Export performance 138. The Authority has considered the injury data for the domestic operations separately for the injury analysis. Therefore, export performance is not the cause of injury to the domestic industry. f. Performance of other products 139. The Authority has considered the data relating to the performance of the product under consideration only. Therefore, performance of other products produced and sold by the domestic industry is not a possible cause of the injury to the domestic industry. J. MAGNITUDE OF INJURY MARGIN 140. The Authority has determined the non-injurious price for the domestic industry on the basis of principles laid down in the Rules read with Annexure III, as amended. The non-injurious price 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 compared with the landed price of the product under consideration from the subject countries for calculating injury margin. For determining the non-injurious price, the best utilization of the raw materials and utilities and best utilization of production capacity has been considered. Extraordinary or non-recurring expenses and/or assets have been excluded from the cost of production and/or non-injurious price. A reasonable return (pre-tax @ 22%) on average capital employed (i.e., average net fixed assets plus average working capital) deployed for the product under consideration has been allowed for recovery of interest, corporate tax, and profit to arrive at the non-injurious price as prescribed in Annexure III of the Rules. SN | Particulars | NIP | Landed price | Injury margin | Injury margin | Injury margin ---|----------------------------|-------|--------------|---------------|---------------|-------------- | | $/MT | $/MT | $/MT | % | Range 1 | European Union | | | | | | BorsodChem Zrt., | *** | *** | *** | *** | 50-60 | Covestro Deutschland AG | *** | *** | *** | *** | Negative | Any other | *** | *** | *** | *** | 60-70% 2 | Saudi Arabia | | | | | | Sadara Chemical Company, | *** | *** | *** | *** | 70-80% | Any other | *** | *** | *** | *** | 80-90% K. INDIAN INDUSTRY’S INTEREST AND OTHER ISSUES A.10 K.1. Submission of the other interested parties 141. The other interested parties have made following submissions on Indian industry interest: i. The domestic industry meets only 50% of India’s demand. Despite multiple protection from 2017, no capacity expansion has undertaken. ii.The duty drawback on foam exports is merely 1.3% and the use of the Advance authorisation scheme disqualifies exporters from availing RoDTEP benefits. Therefore, exporters are not able to recover additional anti-dumping cost. iii. The domestic industry’s plant is located in western India. Thus, manufacturers in the South and East face higher logistical costs in sourcing domestic TDI and thus rely on imports. iv. Since the Indian producer is unable to meet the domestic demand, the continued imposition of duty is against the downstream industry and public at large. v.The gap between domestic demand and domestic supply has widened. vi. The domestic industry has not increased its capacity to meet the domestic demand fully. vii. The continuation of anti-dumping duties would cause economic harm to downstream industries and consumers. viii. The relevant consideration for the downstream producers for opposing the imposition of anti- dumping duty is whether the imposition of duty would lead to adverse economic consequences and not closure or shutdowns of downstream users. ix. TDI constitutes 25-30% of manufacturing cost for downstream products and the user industry earns a thin profit margin of 2-5% merely. x.The downstream producers lack the financial capacity to absorb increased input costs. xi. The continuation of anti-dumping duty would create market monopolisation. xii. The imports of the product under consideration are required as the domestic industry is not able to meet the quality standards. xiii. The quality differential between domestic and imported TDI creates a non-price barrier to substitution. xiv. The export competitiveness of India's foam industry would be compromised by forced reliance on lower-quality domestic TDI. xv. The actual prices for entry-level PU foam mattress start at 6,000 and not 15000 as claimed by GNFC. In this segment, foam contributes the largest share of material cost. Thus, any increase in TDI cost contributes the largest share of material cost. xvi. The domestic industry does not manufacture ODCB-free TDI, which is essential for REACH- compliant exports to Europe. Thus, levy of duty is disadvantageous as domestic industry is not supplying the technical grades required by end-users. xvii. The imports of TDI are already subject to a basic custom duty of 7.5% along with additional welfare surcharge K.2. Submission of the domestic industry 142. The domestic industry has made been following submissions on Indian industry interest: i. Protecting the domestic industry from dumped imports is both legitimate and essential to ensure the long-term commercial viability and self-reliance of the domestic industry in India. ii. The fact that demand of the subject goods is higher than the capacity with the Indian producers does not justify dumping. iii. The applicant has a well-established pan-India supply chain. The domestic logistics costs are always lower and more predictable than the international freight, duties and handling charges associated with imports. iv. Around 15–20 kg of foam is used in a mattress and therefore, share of TDI in the mattress is around 6KG. The impact of anti-dumping duty will only be Rs 150 per mattress. v. Even when the anti-dumping measures were in force in the past, the demand in India grew constantly. vi. The interested parties have not provided evidence of any increase of raw material cost which will not be absorbed by the downstream producers. vii. The demand for TDI has continuously increased. Had an anti-dumping duty on TDI impacted the downstream industry, the demand would have not shown an increase. viii. Foam industry does not compete with imports and can easily pass on the cost. ix. The analysis of annual report shows that the user industry is earning handsome profits. x. Procuring from the domestic industry is in the interest of the consumers, as the domestic industry will work for the interest of the consumers in India. xi. Public interest is not limited to only consumer industry and also covers the interest of the applicant and ultimate public at large. xii. The continuation of the anti-dumping measures on imports of the product under consideration is in the interest of the domestic producer. xiii. It is in the interest of consumer’s interest to have a competitive applicant capable of supplying the product to the consumers in competition to fair priced imports. xiv. Encouraging domestic manufacturing activities is essential to make India the manufacturing powerhouse it aims to become. xv. Anti-dumping duty is not a protection to the industry, but rather a tool to bring fair market competition in the country. K.3. Examination of the Authority 143. The Authority considered whether imposition of the recommended anti-dumping duty will be against public interest. This determination is based on consideration of information on records and interests of various parties including the domestic industry, foreign producers and consumers. 144. The Authority issued gazette 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 the product supplied by the various suppliers from different countries, ability to switch sources, the effect of the anti- dumping duty on the consumers, the factors that are likely to accelerate or delay the adjustment to the new situation caused by the continuation of the anti-dumping duty. 145. 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, which is in the general interest of the country. The Authority recognizes 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 the subject goods in India. However, fair competition in the Indian market will not be reduced by the imposition of anti-dumping measures. On the contrary, the continuation of anti-dumping measures would prevent the decline of the domestic industry that may ensue as a consequence of low-priced imports from the subject countries and help maintain the wider availability of choices to the consumers of the product under consideration. 146. The Authority had prescribed an economic interest questionnaire which was sent to all interested parties to this review investigation. None of the participating interested parties have established the impact of anti-dumping duty on the downstream industry. 147. The Authority notes that despite anti-dumping duties are in force, the condition of the domestic industry still remains vulnerable due to imports from subject countries. The domestic industry’s economic condition still remains adverse. 148. In regard to the contention that the locational disadvantages faced by the users in the southern and eastern India prompts imports, the Authority notes that the domestic industry has supplied to the consumers all over the country. Furthermore, the domestic logistics costs are lower and more predictable than international freight, duties, and handling charges associated with imports. Importing any product involves port charges, customs duties and handling fees, which is not the case with domestic purchase. 149. It has also been claimed that there is a demand and supply gap in the country. However, the Authority notes that the demand-supply gap does not justify dumping. The purpose of the anti- dumping duty is not to restrict imports but to ensure fair competition. The demand for the product has consistently increased which shows that the anti-dumping duties did not adversely affect the demand. Therefore, the supply of the consumers will not be restricted if the measures are continued. 150. As regards the impact of anti-dumping duty on the downstream industry, it cannot be construed that the operations of the consumers would become unviable, merely because dumping is prevented by imposition of duty and fair competition is restored in the market. Anti-dumping duties can create a level playing field for domestic producers, allowing them to compete fairly and continue supplying the market. The submissions made by the consumers during the course of the investigation have been taken into account. The Authority notes that these interested parties have not shown with verifiable information that the imposition of the antidumping duties shall have significant adverse effect either on these consumers or the public at large. 151. The domestic industry has provided the impact of anti-dumping duty on the downstream industry which is based on the final finding issued in the previous investigation. SN | End product | Market price | Impact in % ---|------------------------|-------------------|------------ 1 | Adhesive | Rs 5000 per KG | 0.11% 2 | PVC coated paper | Rs 70/sqm | 1.32% 3 | Polyurethane Resin | Rs 1300 per KG | 0.23% 4 | Phenyl Isocyanate | Rs 650 per KG | 1.22% 5 | PU Foam Rate | Rs 420 per KG | 1.74% 152. The Authority has also analysed the contention of the interested parties regarding the quality of the product. The Authority takes note that the domestic industry has placed evidence on records showing the quality of the product under consideration is at par with the imported product. The domestic industry placed evidence showing the anti-oxidants used in the product under consideration are well within the prescribed limit and that it has acquired BIS certificate for quality. The domestic industry has supplied the product under consideration in large volume to the consumers and has exported the product to more than 60 countries. On the contrary, none of the interested parties have provided any evidence showing how the quality of the product is not at par with the imported product. 153. Regarding the contention that the domestic industry does not produce ODBC- free product under consideration. The domestic industry has placed the test copy on records showing product under consideration produced ODBC- free. Whereas the interested parties have made mere allegations without backing up it with evidences. L. POST DISCLOSURE COMMENTS L.1. Submission of the other interested parties 154. The other interested parties have made following comments on disclosure. i. There is no scope for enhancement of duty in an expiry review. Initiation notification also specifically states that “the present review has been initiated to evaluate the need for continued imposition of duty in force.” ii. DGTR has unilaterally revised the cost of production which directly impacted the computation of normal value and dumping margin. This change in cost of production has not been recorded in the non-confidential disclosure statement. iii. DGTR has not provided any detailed working of normal value, net export price and landed value. No justification has been offered for the increase in the cost of production, which contradicts the data submitted by Sadara in the questionnaire response. iv. The disclosure statement relies on certain data for injury analysis that has not been placed on record. In para 69, the disclosure statement refers to the examination of toluene cost, concentrated nitric acid price, natural gas cost. The same para also discusses the cost of sales for the Bharuch plant during the period of investigation and the preceding three years. This data has been claimed to be confidential, and no trend analysis has been provided in relation to cost of sales and landed value. v. For growth parameters, no data whether in indexed or percentage form has been disclosed. vi. As per consistent DGTR practice, price undercutting should be evaluated based on landed value both with and without the anti-dumping duty, to ensure an objective and comprehensive assessment. vii. As Sadara is the sole producer of TDI in Saudi Arabia thus the price undercutting margin for Sadara should be identical to that of Saudi Arabia as a whole. However, the Authority has computed negative price undercutting for Saudi Arabia and positive price undercutting for Sadara. viii. Sadara reported exports of ***MT of TDI during the POI, while the Authority recorded total imports from Saudi Arabia as less than 6,000 MT. ix. The Authority has evaluated price undercutting only for the period of investigation but in the previous sunset review investigation concerning TDI from Japan, Korea and Japan, price undercutting was assessed for both the period of investigation and the entire injury period. x. The market share of Saudi Arabia declined from 100 to 52 indexed points, any decline in applicant’s market share should be attributed to imports from other countries. xi. Likelihood of injury from subject imports from Saudi Arabia is not established as there is no significant increase in subject imports, no freely disposable or imminent increase in capacity, price suppression or depression is not attributable to subject imports, no increase in inventory level at Sadara and India is not a price- attractive market for Sadara. xii. The volume of TDI imports reflected in the disclosure statement differs materially from the volumes recorded in the earlier final findings dated 24 June 2022. xiii. Injury suffered by the domestic industry cannot be attributed to subject imports since the change in the subject imports trends through the injury investigation period does not coincide with the trends of the economic parameters of the Indian domestic industry. xiv. Higher TDI prices also encourage import of finished goods from ASEAN countries under FTA regimes, defeating the purpose of trade protection. xv. The Authority has not provided any reason for determining an increased cost of production for BorsodChem. The cost of production calculated by the Authority is exaggerated. xvi. The Authority should extend the same rate of duty and same form of duty for Borsod. xvii. The anti-dumping duty should be modified, and nil duty should be prescribed for Covestro as the Authority has determined a negative injury margin for Covestro. xviii. There is no likelihood of injury due to exports by Covestro as there have been substantial sales in the domestic market and other countries. There is no trade remedy measures on its exports to third countries. Therefore, there is no reason for Covestro to shift its exports to India from third countries. xix. Authority’s analysis of third- country export prices also indicates that Covestro has exported to India at higher prices in comparison to export to third countries. L.2. Submission of the domestic industry 155. The domestic industry has made following comments on disclosure. vii. The dumping margin in the present investigation has intensified and is far higher in comparison to the dumping margin of the original investigation. viii. The injury margin for the present investigation has increased for Borsod and Sadara in comparison to original investigation. While it is negative for Covestro Deutschland, the export price of the producer is artificially higher. ix. The domestic industry has suffered losses amounting to more than Rs. [800] crore over the injury period. The losses suffered by the domestic industry are significant and there is no viability for the domestic industry to produce and sell the product. x. Covestro Deutschland AG has artificially increased the price during the period of investigation. Thus, the import price of Covestro Deutschland AG is not reliable to determine likelihood. xi. The Authority has observed that more than 90% of the exports made by Covestro Deutschland AG to other countries are priced lower than the export price to India which shows that export price are not based on cost plus method. xii. Covestro Deutschland AG has part II of the questionnaire response claimed that its prices are on spot sales basis and are following market prices. The submission that its based on cost plus method is contradictory to the response. L.3. Examination by the Authority 156. The Authority has examined the post-disclosure submissions made by the interested parties. It is observed that most of these submissions are reiterations of arguments and contentions that have already been examined and addressed to the extent deemed necessary in the relevant paragraphs of these final findings. The issues raised for the first time in the post disclosure comments/submissions by the interested parties and the domestic industry and considered relevant by the Authority are examined below. Any submission which was merely a reproduction of the previous submissions, and which had been adequately examined by the Authority has not been repeated for the sake of brevity. 157. On the submission that higher TDI prices will encourage import of finished goods from ASEAN countries under FTA regimes, the Authority notes that the interested parties have not provided any evidence establishing the adverse effect of the duties in force. The present investigation is a sunset review investigation, and anti-dumping duties have been in force for a period of five years. The investigation has not shown that the imposition of duties has had any adverse effect on the downstream industry. 158. On the submission that detailed working of normal value, net export price and landed value have not been disclosed to the interested parties, the Authority notes that subsequent to the disclosure statement, each participating producer was provided information on their confidential cost of production, normal value, export price and landed price. The disclosures have been made in line with the consistent practice of the Authority. Their comments on the calculations, if any, have been addressed in this final finding. 159. Covestro Deutschland AG has claimed that since its injury margin is negative, nil duty should be accorded to the producer. The Authority notes that the investigation has shown that Covestro Deutschland AG has exported the product under consideration at significantly dumped prices. It is also seen that 90% of the exports of the producer to other countries are below the export price to India and the idle capacities with the producer is more than the demand in the country. The Authority therefore considers that it would not be appropriate to provide nil duty to the producer particularly when the duties are being extended on the ground of likelihood. 160. On the comments that disclosure statement relies on data with respect to raw material cost and comparison of plant wise cost with landed price and that this data was not placed on record, the Authority notes that the interested parties had in their written submission claimed that the Dahej plant was inefficient and requested comparison of the cost of Bharuch plant with the landed price of imports. The interested parties had also claimed that the toluene prices have declined whereas the cost of production of the domestic industry had increased. In response to this, the domestic industry had referred to information with respect cost of Bharuch plant and raw material cost in its rejoinder submissions. The said information is already part of the application filed by the domestic industry, and the matter has already been examined by the Authority 161. The interested parties stated that trend of growth parameters and plant wise cost has not been disclosed. The Authority notes that the plant wise cost of the domestic industry is business sensitive information. The trade notice 10/2018 does not require disclosure of plant wise information in trend. Therefore, the Authority does not consider it appropriate to disclose plant wise cost in trend. However, the trend of cost of production, and landed price is given. As regards trend of growth parameters, the same was provided by the domestic industry in the written submissions and based on information, and the same has been disclosed in the disclosure statement, and in the final findings. 162. The interested parties have filed comments that the volume of imports as per the disclosure statement differs materially from the volumes recorded in the final findings dated 24 June 2022. The matter has been examined, and it is noted that the volume of imports reported in the F.No.7/26/2021- DGTR dated 24th June 2022 was for European Union, Saudi Arabia, United Arab Emirates and Taiwan, whereas the subject countries in the present investigation are European Union and Saudi Arabia. Further, the Authority has relied on the Directorate General for Systems and Data Management (DG Systems) to ascertain the import volume of the subject goods for the injury period. 163. Borsod Chem has filed comments on the cost of production. The comments have been examined. The cost of production of the producer has corrected and accordingly, the normal value and the dumping margin of the producer has undergone a change. The revised dumping margin is shown in the dumping margin table. 164. On the comments made by other interested parties that the injury is due to imports from other countries, the Authority notes that it had already recorded in the disclosure statement that the imports from other countries are attracting anti-dumping duty. The present investigation is a sunset review investigation, and the scope is restricted to examining if there is a justification for continued imposition of anti-dumping duty. The investigation has shown that there is continued dumping and injury and likelihood of dumping and injury in event of expiry of measures on the subject countries. 165. On the comment that the price undercutting has been determined only for the period of investigation, the Authority notes that the investigation has shown that the related importer of one of the participating producers from the subject countries has sold the product under consideration at losses. Accordingly, the price undercutting has been determined after calculating the landed price of the participating producers duly adjusted after loss. Further, it is also noted that there is no justification advanced by the interested parties for determination of price undercutting for the whole injury period. 166. With respect to the contention that the price undercutting for Sadara should be identical to the price undercutting for Saudi Arabia as a whole, the Authority has examined the matter. It is observed that the names of Saudi Arabia and the European Union were inadvertently interchanged in the presentation of data. This clerical error has since been rectified by the Authority. Following the correction, the recalculated figures demonstrate that the price undercutting levels attributed to Sadara and to Saudi Arabia as a whole are comparable. The corrected data appropriately reflects the relative pricing behavior of the subject exporter. 167. On the submission of Sadara Chemical Company that its cost of production has been revised, it is stated that the Authority has considered the cost of production claimed by the exporter. However, as the exporter could not provide justification for some of the cost heads e.g. ‘cost absorbed within the TDI chain’, the same has been considered based on available information. M. CONCLUSION 168. Having regard to the contentions raised, information provided, submissions made and the facts available before the Authority as recorded above and on the basis of the above analysis of the continued dumping and injury to the domestic industry and further likelihood of injury, the Authority concludes that: - i. The product under consideration in the present investigation is Toluene DiIsocyanate (TDI), having isomer content in the ratio of 80:20. The scope of the product is same as defined in the original investigation. ii. The product produced by the domestic industry is a like article to the imported product. iii. The applicant constitutes domestic industry under Rule 2(b) of the Rules, and the application satisfies the requirements of standing under the Rules. iv. The dumping margin for participating producers and exporters from subject countries are more than de minimis, and significant. v. There is a continuation of dumping of the product under consideration in the POI of the review investigation, and the investigation has shown that the dumping of the product is likely to continue in event of expiry of duties . vi. The imports from subject countries declined till 2022-23 but increased in period of investigation. vii. The landed price of imports os subject goods from subject countries is below the cost of sales of the domestic industry and the domestic industry has sold at significant financial losses. viii. The dumped imports have prevented the domestic industry from increasing its prices in line with the changes in the costs. The dumped imports have suppressed the prices of the domestic industry. ix. The domestic industry has not claimed volume injury in the present investigation in the form of possible adverse effects of imports on production, sales, capacity utilization, market share of the domestic industry. x. The market share of imports from the subject countries has declined till 2022-23 and recorded marginal increase in the period of investigation. xi. The market share of imports from the non-subject countries attracting duties have increased in 2021-2022, increased further in 2022-2023 and declined in period of investigation. xii. The domestic industry has suffered losses, loss before interest, cash loss and negative return on capital employed in the period of investigation. xiii. Average inventory of the domestic industry has increased over the injury period. xiv. The growth of the domestic industry during the period of investigation and preceding year has been negative on various price parameters compared to earlier years. xv. Producers in the subject countries are operating with significantly high idle capacities. The idle capacities for producers and exporters from subject countries are very significant, and more than Indian demand. xvi. Producers in the subject country have set up capacities which are far higher than domestic demand and are utilizing these capacities for export purposes. xvii. The imposition of duty has not had any adverse effect on the downstream industry. Therefore, continuation of duty will not be against public interest at large. N. RECOMMENDATIONS 169. The Authority notes that the investigation was initiated and notified to all interested parties and adequate opportunity was given to the domestic industry, exporters, importers and other interested parties to provide information on the aspects of likelihood of continuation/recurrence of dumping and injury. 170. Having concluded that there is continuation of dumping and injury and likelihood of further injury if the anti-dumping measure are allowed to cease, the Authority is of the view that continued imposition of measures is necessary on imports of the product under consideration from the subject countries. The Authority considers it appropriate to recommend continuation of definitive antidumping duty as notified vide final finding F.No.6/43/2019- DGTR dated 28th January 2021. 171. Considering the facts and circumstances of the case, as established hereinabove, anti-dumping duty equal to the amount indicated in Column (7) of the duty table given below is recommended to be imposed from the date of notification to be issued in this regard by the Central Government, on all imports of the product under consideration, from the subject countries for a further period of five (5) years. Duty table SN | Heading | Description | Country of origin | Country of export | Producer | Amount | UOM | Currency ---|------------|--------------------------------------------------|-------------------|-------------------|------------------------------|----------|-----|---------- 1 | 29291020* | “Toluene DiIsocyanate (TDI) having isomer | European Union | Any country | Covestro Deutschland AG | 221.04 | MT | US $ | | content in the ratio of 80:20”** | | including European | | | | | | | | Union | | | | 2 | -do- | -do- | -do- | -do- | BorsodChem Zrt | 102.05 | MT | US $ 3 | -do- | -do- | -do- | -do- | Any producer other than | 264.96 | MT | US $ | | | | | mentioned in S. No. 1 & 2 above | | | 4 | -do- | -do- | Any country other | European Union | Any | 264.96 | MT | US $ | | | than countries | | | | | | | | attracting anti- | | | | | | | | dumping duty | | | | | 5 | -do- | -do- | Saudi Arabia | Any country | Sadara Chemical Company | 217.55 | MT | US $ | | | | including Saudi | | | | | | | | Arabia | | | | 6 | -do- | -do- | -do- | -do- | Any producer other than | 344.33 | MT | US $ | | | | | mentioned in S. No. 5 above | | | 7 | -do- | -do- | Any country other | Saudi Arabia | Any | 344.33 | MT | US $ | | | than countries | | | | | | | | attracting anti- | | | | | | | | dumping duty | | | | | * Customs classification is only indicative and not binding on the scope of the investigation. ** The product under consideration in the present investigation concerns TDI having isomer content in the ratio of (80:20). All other grades are beyond the scope of product under consideration. O. FURTHER PROCEDURE 172. An appeal against the determination of the Designated Authority in these final findings shall lie before the Customs, Excise and Service Tax Appellate Tribunal in accordance with the relevant provisions of the Act/ Rules. 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.