ADD investigation concerning imports of AZO Pigment exported from China PR

REGD. No. D. L.-33004/99 The Gazette of India CG-DL-E-17032025-261654 EXTRAORDINARY PART I—Section 1 PUBLISHED BY AUTHORITY No. 76] NEW DELHI, WEDNESDAY, MARCH 12, 2025/PHALGUNA 21, 1946 MINISTRY OF COMMERCE AND INDUSTRY (Department of Commerce) (DIRECTORATE GENERAL OF TRADE REMEDIES) New Delhi, the 12th March, 2025 FINAL FINDINGS Case No. ADD (O.I.) 06/2024 Subject: Anti-dumping investigation concerning imports of 'Azo Pigment' originating in or exported from China PR. F. No. 6/06/2024-DGTR.— Having regard to the Custom Tariff Act, 1975, as amended from time to time (hereinafter referred to as "the Act") and the Custom Tariff (Identification, Assessment and Collection of Anti- Dumping Duty on Dumped Articles and Determination of Injury) Rules, 1995, as amended from time to time (hereinafter referred to as "the Rules") thereof. A. BACKGROUND OF THE CASE 1. Sudarshan Chemical Industries Limited (hereinafter referred to as the "applicant" or "domestic industry") has filed a duly substantiated application before the Designated Authority (hereinafter referred to as the "Authority") for initiation of anti-dumping investigation concerning imports of Azo Pigment (hereinafter referred to as "product under consideration" or "PUC” or “subject goods"), from China PR (hereinafter referred to as the "subject country"). The present application has been supported by Pigments Manufacturers Association of India. The application has also been supported by Anupam Colours Private Limited, Hercules Pigments Private Limited, Kwalichem Private Limited, Micas Organic Limited, Unity Dye Chem Private Limited, Vijay Chemical Industries, Voxco Pigments and Chemicals Private Limited, Kroma Industries and Asahi Tennants. 2. The Authority, on the basis of sufficient prima facie evidence submitted by the applicant, issued a public notice vide Notification No. 6/06/2024-DGTR dated 29th March 2024, published in the Gazette of India Extraordinary, initiating the subject investigation in accordance with the Section 9A of the Act read with Rule 5 of the Rules to determine the existence, degree and effect of the alleged dumping of the subject goods originating in or exported from the subject country and to recommend the amount of anti-dumping duty, which if levied, would be adequate to remove the alleged injury to the applicant. B. PROCEDURE 3. The procedure described below has been followed with regard to the investigation: a. The Authority notified the embassy of the subject country in India about the receipt of the present anti- dumping application before proceeding to initiate the investigation in accordance with Rule 5(5) of the Anti-Dumping Rules. b. The Authority issued a public notice dated 29th March 2024, published in the Gazette of India Extraordinary, initiating the anti-dumping investigation concerning imports of the subject goods from the subject country. с. The Authority sent a copy of the initiation notification to the embassy of the subject country in India, the other known domestic producers, the known producers and exporters from the subject country, the known importers/users in India, and the other interested parties, as per the addresses made available by the applicant. The interested parties were asked to provide relevant information in the form and manner prescribed in the initiation notification and make their submissions known in writing within the time limits prescribed in the initiation notification. d. The Authority also provided a copy of the initiation notification to the known importers/users in India who are known to be associated with the subject goods and requested them to make their views known in writing within the prescribed time limit. e. The Authority also 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, in accordance with Rule 6(3) of the Rules. A copy of the non-confidential version of the application was circulated to the other interested parties. f. The embassy of the subject country in India was also requested to advise the exporters/producers to submit their responses to the questionnaire within the prescribed time limit. g. The Authority sent exporter's questionnaire to the following known producers/ exporters in China PR in accordance with Rule 6(4) of the Rules: +-----+-------------------------------------------------+ | SN | Name of producers/exporters in the subject country | +=====+=================================================+ | 1 | Colors & Effect Shanghai Ltd | +-----+-------------------------------------------------+ | 2 | Dongguan Ganfengxing Plastic Co., Ltd. | +-----+-------------------------------------------------+ | 3 | Firstruth Colorants China Co. Ltd | +-----+-------------------------------------------------+ | 4 | Hangzhou Brilliant Chem Technology | +-----+-------------------------------------------------+ | 5 | Hangzhou Brilliant Prosperous Impex Co | +-----+-------------------------------------------------+ | 6 | Hangzhou Color Source Industry Co Ltd | +-----+-------------------------------------------------+ | 7 | Hangzhou Color Source Industry Co Ltd | +-----+-------------------------------------------------+ | 8 | Hangzhou Hongyan Pigment Chemical Co Ltd | +-----+-------------------------------------------------+ | 9 | Hangzhou Paramount Product Corporation | +-----+-------------------------------------------------+ | 10 | Heubach Colorants Singapore Pte. Ltd | +-----+-------------------------------------------------+ | 11 | Jiangxi Longyuan Chemical Co. Ltd | +-----+-------------------------------------------------+ | 12 | Lily Group Co. Ltd. | +-----+-------------------------------------------------+ | 13 | Longkou Union Chemical Co Ltd | +-----+-------------------------------------------------+ | 14 | Nantong Dic Color Co Ltd | +-----+-------------------------------------------------+ | 15 | Ningbo Kemi Chemicals Co Ltd | +-----+-------------------------------------------------+ | 16 | Sanhu Color Company Ltd | +-----+-------------------------------------------------+ | 17 | Shanghai Ggink Pigments & Chemicals | +-----+-------------------------------------------------+ | 18 | Sincol Corporation Limited | +-----+-------------------------------------------------+ | 19 | Stl Ecoplastics Co., Limited | +-----+-------------------------------------------------+ | 20 | Trust Chem Co. Ltd | +-----+-------------------------------------------------+ | 21 | Tshang Chemical Co. Limited | +-----+-------------------------------------------------+ | 22 | Union Colours BV | +-----+-------------------------------------------------+ | 23 | Unique Chemical Ltd | +-----+-------------------------------------------------+ | 24 | Verdcol Ltd | +-----+-------------------------------------------------+ | 25 | Zhejiang Shengda Charter Win | +-----+-------------------------------------------------+ h. In response to the above, the following producers/exporters from China PR have responded and filed exporter's questionnaire response: +-----+-----------------------------------------------+ | SN | Producers/exporters in the subject country | +=====+===============================================+ | 1 | Colors & Effects Shanghai Limited | +-----+-----------------------------------------------+ | 2 | Longkou Union Chemical Co., Ltd. | +-----+-----------------------------------------------+ | 3 | Lily Group Co. Ltd. | +-----+-----------------------------------------------+ | 4 | Ruian Baoyuan Chemical Industry Co, Ltd. | +-----+-----------------------------------------------+ | 5 | Trust Chem Co., Ltd. | +-----+-----------------------------------------------+ | 6 | Worldwide Colorants & Chemical Company Limited| +-----+-----------------------------------------------+ | 7 | Zhejiang Shengda Charter Win Chemical Co., Ltd| +-----+-----------------------------------------------+ i. The Authority also sent questionnaire to the following known importers/users of the product under consideration in India calling necessary information in accordance with the Rule 6(4) of the Rules: - +-----+--------------------------------------------+ | SN | Users/importers | +=====+============================================+ | 1 | Alok Master Batches Private Limited | +-----+--------------------------------------------+ | 2 | Amar Trading Corporation | +-----+--------------------------------------------+ | 3 | Asha Penn Color Private Limited | +-----+--------------------------------------------+ | 4 | Berger Paints India Limited | +-----+--------------------------------------------+ | 5 | Cytech Coatings Private Limited | +-----+--------------------------------------------+ | 6 | DIC India Ltd. | +-----+--------------------------------------------+ | 7 | Hi-Tech Inks Private Limited | +-----+--------------------------------------------+ | 8 | Hubergroup India Private Limited | +-----+--------------------------------------------+ | 9 | IDCC Global Chem Private Limited | +-----+--------------------------------------------+ | 10 | Jupiter Laminators Private Limited | +-----+--------------------------------------------+ | 11 | Kandui Industries Private Limited | +-----+--------------------------------------------+ | 12 | Konkan Speciality Polyproducts Private Limited| +-----+--------------------------------------------+ | 13 | Maharashtra Impex Limited | +-----+--------------------------------------------+ | 14 | Nenava Metal Corporation | +-----+--------------------------------------------+ | 15 | Plastiblends India Limited | +-----+--------------------------------------------+ | 16 | Rainbow Colours | +-----+--------------------------------------------+ | 17 | Sakata Inx (India) Pvt Ltd | +-----+--------------------------------------------+ | 18 | Sanjay Enterprises | +-----+--------------------------------------------+ | 19 | Setco Chemicals (India) Private Limted | +-----+--------------------------------------------+ | 20 | Seven - 11 Industries Private Limited | +-----+--------------------------------------------+ | 21 | Siegwerk India Private Limited | +-----+--------------------------------------------+ | 22 | Toyo Ink Private Limited | +-----+--------------------------------------------+ | 23 | Uflex Limited | +-----+--------------------------------------------+ | 24 | VIP Chem LLP | +-----+--------------------------------------------+ | 25 | Wellspring Industries Private Limited | +-----+--------------------------------------------+ j. In response to the above notification, the following importers and users have submitted questionnaire responses to the Authority. +-----+------------------------------------------+ | SN | Users/importers | +=====+==========================================+ | 1 | Colors & Effects India Private Limited | +-----+------------------------------------------+ k. Submission have also been made by the Asha Penn Color Private Limited and China Dyestuff Industry Association (CDIA) and the same have been duly considered in the present final findings. 1. Exporters, foreign producers and other interested parties who have not responded to or not supplied relevant information to this investigation, have been treated as non-cooperating interested parties. m. The Authority issued an Economic Interest Questionnaire to all the known producers and exporters, importers, and the applicant. The economic interest questionnaire was also shared with the administrative line ministry. An economic interest questionnaire was filed only by the applicant. None of the other interested parties have filed an economic interest questionnaire. n. The period of investigation (POI) for the purpose of present investigation is 1st October 2022 to 30th September 2023 (12 months). The injury analysis period covers 2020-21, 2021-22, 2022-23 and the period of investigation. 0. The interested parties were granted an opportunity to present their comments on the scope of the product under consideration and propose PCNs, if required, within a period of 30 days from the date of the initiation notification. Based on submissions, the Authority clarified and notified the PCN on 18th June 2024. p. 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. ৭. In accordance with Rule 6(6) of the Rules, the Authority provided an opportunity for the interested parties to present their views orally in a public hearing held on 28th November 2024 in hybrid mode. The parties who presented their views in the oral hearing were requested to file written submissions of the views expressed orally, followed by rejoinder submissions, if any. r. The information provided by the interested parties on a confidential basis was examined with regard to the 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 the other interested parties. Wherever possible, parties providing information on a confidential basis were directed to provide sufficient non-confidential versions of the information filed on a confidential basis. S. A request was made to the Directorate General of Systems and Data Management (DG System) to provide data of the imports of the subject goods for the injury investigation period and the period of investigation. DG System data has been received by the Authority and has been considered in these final findings. t. Verification of the information provided by the domestic industry and other interested parties was carried out by the Authority, to the extent necessary. Only such verified information with necessary rectification, wherever applicable, has been relied upon for the purpose of this final finding. u. The Authority circulated the disclosure statement containing all essential facts under consideration for making the final recommendations to the Central Government to all interested parties on 17 February 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. V. The non-injurious price (hereinafter referred to as the 'NIP') has been determined based on the cost of production and reasonable profits of the subject goods in India, based on the information furnished by W. the applicant on the basis of Generally Accepted Accounting Principles (GAAP) and Annexure III to the AD Rules, 1995 so as to ascertain whether anti-dumping duties lower than the dumping margin would be sufficient to remove injury to the applicant. 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. X. "***" in these final findings represents information furnished by an interested party on a confidential basis and so considered by the Authority under the Rules. y. The exchange rate adopted by the Authority for the subject investigation is 1 US$= Rs. 83.21. C. PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE 4. At the stage of initiation, the product under consideration was defined as under: "The product under consideration in the present investigation is 'Azo Pigment'. The product under consideration belongs to a class of synthetic organic pigments, which is widely used in various industries, including paints, inks, plastics, textiles, and cosmetics. The product under consideration is traded in three different colors such as Yellow Pigment, Red Pigment and Orange Pigment. Every colour has different grades, and each grade has different chemical concentrations and properties and therefore, has different end use application. The product under consideration is used for providing colour effects to various applications and is widely used in various industries. The product under consideration has a dedicated customs classification under Chapter 32 under HS code 32041711, 32041720 & 32041731. However, the product under consideration is also being imported under other sub-heading 32041719, 32041739, 32041740, 32041759, 32041769 and 32041790. The customs classification is only indicative and in no way binding on the scope of the subject investigation" C.1 Submission of the other interested parties 5. The other interested parties have submitted as follows with regards to the scope of the product under consideration and like article. a. PCN methodology proposed by the applicant in the application and notified by the Authority is different. The applicant has not shared the revised data as per methodology. b. Reference is placed on Ajanta Pvt. Ltd. Vs. UOI. The duties are collected on the basis of the product scope and description and not on the basis of HS code. Recommending duty at 4-digit level will lead to collection of duty on non-product under consideration as well. c. There are special grades where Indian producers do not meet the quality standards. They cannot be sourced locally or have alternatives for Indian manufactures and are required to be imported. d. Pigment Yellow 13, Pigment Yellow 14, Pigment Red 48.2, Pigment Red 53.1, Pigment Red 57.1, Pigment Red 166 and Pigment Red 266 are some of the grades which the Indian industry has not been able to produce. e. Indian ink manufacturers rely on Chinese pigments for high-quality products. C.2 Submission of the applicant 6. The applicant has submitted as follows with regards to the scope of the product under consideration and like article: a. The product under consideration is Azo Pigment. The product is traded in different colors such as red, orange and yellow pigment. b. The goods produced by the applicant is like article to the product imported from the China PR. с. Pigments are powders used to add color or change visual appearance of product. The primary purpose is to provide color to material. d. Pigments are categorized into two types, Organic and Inorganic chemical. Organic pigments are commonly used in inks, dyes, etc. Common types of organic pigments are Azo Pigments, Phthalocyanine pigments etc. Inorganic pigments include pigments such as effect pigment. e. The product is imported under various HS code. Since the product under consideration is being imported under various codes, the Authority may kindly specify these codes as well in the duty table. f. Reliance placed on Ajanta Pvt. Ltd. Vs. UOI, wherein it was held that duties are imposed only on those HSN codes which are specified in the duty table. g. As regards the reason for imports is high quality product supplied by the Chinese producers, the applicant is regularly exporting the product to various countries which clearly demonstrates that the applicant is capable of meeting the global standards, quality and technical requirements. h. All the grades for which exclusion has been sought has been produced and sold by the Indian industry. There are more than 200 different types of AZO pigment. Out of these 100 different types, demand for around 50 types of effect pigment is 100-200 KGs only. i. Asha Penn Color Pvt. Ltd. has demanded exclusion of two particular grades – Red 166 and Red 266, the demand for the two grades is miniscule. These are made to order items and can be produced by the applicant if there is a commercially viable demand at adequate prices. j. The domestic industry has supplied comparable grades to PY 13, PY 14, PR 48.2, PR 53:1, PR 57:1 for which exclusion has been demanded. k. It is not possible that each and every type of AZO pigment is produced and sold by each producer unless it is commercially and efficiently viable. 1. The interested parties have not provided a single instance where the Indian industry has failed to supply a replacement. The domestic industry has undergone all necessary approvals to ensure that quality materials are being produced and supplied from their facilities. C.3 Examination by the Authority 7. The submissions made by the other interested parties and the applicant regarding the product under consideration and the like article have been examined and addressed hereunder. 8. The product under consideration in the present investigation is “Azo Pigment". Azo Pigment belongs to a class of synthetic organic pigment which is widely used in various industries, including paints, inks, plastics, textiles, and cosmetics. 9. Pigments are powders used to add or modify color in products. They are typically insoluble and chemically stable in water, used primarily in textiles and paints industry. Based on their method of formulation, pigments are categorized into organic and inorganic types. Organic pigments are widely used in inks, dyes, cosmetics, and artist paints, with common examples including azo pigment and phthalocyanine pigments. Whereas, inorganic pigments are preferred for applications requiring durable, weather-resistant colors, such as effect pigments. 10. Azo pigment is traded in three different colors such as Yellow Pigment, Red Pigment and Orange Pigment. Every colour has different grades, and each grade has different chemical concentrations and properties and therefore has different end use application. The product under consideration is used for providing colour effects to various applications and is widely used in various industries. As per information provided by the applicant, there are more than 200 different types of AZO pigment. 11. On the exclusion sought by the other interested parties, the applicant has submitted that Red 166 and Red 266 have very low demand and therefore are made to order items. The applicant has submitted that it can produce those items if there is a commercially viable demand at adequate prices. The applicant has provided invoices of its supplies made for product with similar color index to Pigment Yellow (PY) 13, PY 14, Pigment Red (PR) 48.2, PR 53:1 and PR 57:1. Therefore, the Authority is unable to accept the submission on exclusion. 12. The Authority invited comments from the interested parties on the proposed PCN methodology and scope of the product under consideration within a period of 30 days from the date of initiation. Apart from the applicant, none of the interested parties have provided comments on the scope of the product under consideration or the PCN methodology. 13. In view of differential properties, end use and the cost of colors, the following PCN methodology has been considered for the present investigation which was notified vide notification dated 18th June 2024. +-----+---------------+---------+-----------+ | SN | PCN parameter | Value | PCN Code | +=====+===============+=========+===========+ | 1 | COLOR | a. Orange| a. O | | | | b. Red | b. R | | | | c. Yellow| c. Y | +-----+---------------+---------+-----------+ 14. The Authority has examined the DG system transaction wise data and found that the product under consideration is classified under Chapter 32 of the Custom Tariff Act, 1975 under sub-headings 32041711, 32041720 and 32041731 of the Tariff classification. The product has also been imported under 32041719, 32041739, 32041740, 32041759, 32041769 and 32041790. It is also noted that the customs classification is indicative only and is in no way binding on the scope of the present investigation. 15. There is no known difference between the subject goods exported from the subject country and supplied by the applicant. The product under consideration produced by the Indian industry and imported from the subject country are comparable in terms of characteristics such as physical & chemical characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution & marketing and tariff classification of the goods. The two are technically and commercially substitutable and consumers can use them interchangeably. D. SCOPE OF DOMESTIC INDUSTRY AND STANDING D.1 Submission made by the other interested parties 16. The other interested parties have submitted as follows with regards to the scope of the domestic industry and standing: a. The applicant has imported 21 MT of the product under consideration in the period of investigation. b. The applicant has withheld the information of self-imports at the time of initiation. The applicant has disclosed this information after 8 months of initiation of this investigation. с. The Authority cannot allow the applicant to rectify the false declaration at a belated stage. The threshold of evidence must be applied uniformly to domestic producers and opposing interested parties. d. Out of 7 supporters, 4 producers have imported the product under consideration. e. The supporters have not filed complete response as per Trade Notice 13/2018 and Trade Notice 14/2018. f. Applicant does not qualify as “domestic country” under Rule 2(b) as it is "importer of the alleged dumped article”. g. Huber Group is the largest producer in India with respect to production. Heubach Colorants has production levels that are comparable to Sudharshan. Neither of these producers have participated. h. Kroma Industries, Voxco Pigments and Asahi Tennants have submitted the support letter at very belated stage. D.2 Submission made by the applicant 17. The applicant has submitted as follows with regards to the scope of the domestic industry and standing: a. There are around 15 producers in India. Out of these, 10-12 producers are from MSME segment with some producing less than 200-250 MT on annual basis. b. Production of Sudarshan Chemical Industries Limited accounts for more than 25% share in total Indian production. When production of supporters is included, the applicant along with supporter accounts for more than 50%. с. The present application has been supported by the Pigments Manufacturers Association of India. d. Anupam Colours Private Limited, Hercules Pigments Private Limited, Kwalichem Private Limited, Micas Organic Limited, Unity Dye Chem Private Limited, Vijay Chemical Industries, Voxco Pigments and Chemicals Private Limited have supported the application. e. Kroma industries, Voxco Pigments and Asahi Tennants have subsequently supported the application. f. The applicant is not regularly importing the product under consideration. While filing the application, the applicant had inadvertently identified these imports as domestic purchases. However, when preparing the financial statements 2023-24 and the verification documents, the applicant found the error. g. The applicant has imported small quantity of Azo Pigment from China PR during the period of investigation. The imports made by the applicant are negligible in relation to own production. The applicant has imported only one type of product, whereas it typically sells over 50 different variants. h. The imports were only made to assess the import price offered by the Chinese producers and to evaluate the product. Moreover, the product is not domestically consumed. i. The volume of imports made by applicant is only ***. The imports made by applicant is only *** in relation to applicant production. j. On the submission of the interested party that there are other producers of the product and only Sudarshan and a few supporters have provided information, standing is based on production volume not the number of producers. k. The applicant is unaware of any imports by supporters. Even in absence of supporter, the applicant constitutes major proportion of the total Indian production. 1. Huber group produces azo pigment for captive consumption and does not sell the product domestically and therefore, have not supported. Heubach has been purchased by the applicant in 2024. D.3 Examination by the Authority 18. The submissions made by the interested parties and domestic industry concerning standing and scope of the domestic industry have been examined and addressed hereunder. 19. Rule 2(b) of the Anti-Dumping Rules defines domestic industry as under: "(b) "domestic industry" means the domestic producers as a whole engaged in the manufacture of the like article and any activity connected therewith or those whose collective output of the said article constitutes a major proportion of the total domestic production of that article except when such producers are related to the exporters or importers of the alleged dumped article or are themselves importers thereof in such case the term 'domestic industry' may be constructed as referring to the rest of the producers.' 20. The present application has been filed by Sudarshan Chemical Industries Limited. Apart from the applicant there are 15 producers of the like article in India. 21. The applicant has imported *** MT of product under consideration from China PR during the period of investigation. The applicant has claimed that the imports were made solely to assess the import price offered by Chinese producers and to evaluate the product supplied by the Chinese producers/exporters. The other interested parties have claimed that since the applicant gave a misdeclaration on imports by them, the investigation should be terminated. 22. The Authority notes that the applicant had vide email dated 21st May 2024 admitted self-imports. Thereafter, vide email dated 13th June 2024, the applicant had provided detailed information on its imports. Subsequently and prior to the oral hearing, the information was circulated to the interested parties as well. The Authority therefore notes that even though the applicant was required to provide the information prior to the initiation, non-disclosure of the fact has not caused any undue benefit to the applicant or prejudice to the other interested parties. The Authority finds that no adverse implications should flow from such non-disclosure. 23. The Authority notes that Rule 2(b) of the Anti-Dumping Rules provides discretion to the Authority to determine inclusion or exclusion of a producer, which has imported the product under consideration, within the scope of the domestic industry. In particular, the Authority is required to examine if the applicant has imported the product in such substantial volumes and under such conditions which would disentitle them as eligible domestic industry. The table below shows the volume of imports made by the applicant in its operations and a comparison of imports has been made with applicant's production and domestic sales. Further, the imports have also been compared with the imports in relation to total imports from China PR and total demand in India. The volume of imports has been verified from the DG system data. +-----+----------------------------------------+-------+-------+ | SN | Particulars | UOM | POI | +=====+========================================+=======+=======+ | 1 | Self-import volume | MT | *** | +-----+----------------------------------------+-------+-------+ | 2 | Own production | MT | *** | +-----+----------------------------------------+-------+-------+ | 3 | Self-imports in relation to own production| % | *** | +-----+----------------------------------------+-------+-------+ | 4 | Domestic sales | MT | *** | +-----+----------------------------------------+-------+-------+ | 5 | Self-imports in relation to domestic sales| % | *** | +-----+----------------------------------------+-------+-------+ | 6 | Imports from China PR | MT | 2,137 | +-----+----------------------------------------+-------+-------+ | 7 | Self-imports in relation to imports from China PR| % | *** | +-----+----------------------------------------+-------+-------+ | 8 | Demand in India | MT | *** | +-----+----------------------------------------+-------+-------+ | 9 | Self-imports in relation to demand | % | *** | +-----+----------------------------------------+-------+-------+ 24. The Authority notes that the volume of imports made by the applicant during the period of investigation are insignificant compared to the total volume, total domestic production and total demand of the country. The volume of imports made by the applicant in relation to applicant production and domestic sales is less than 0.005% and 0.005% respectively. The imports made by the applicant are not in such volume as to disentitle it from being treated as eligible domestic industry. 25. The application has been supported by Pigments Manufacturers Association of India. Prior to initiation, the Authority received support letters from following producers - Anupam Colours Private Limited, Hercules Pigments Private Limited, Kwalichem Private Limited, Micas Organic Limited, Unity Dye Chem Private Limited, Vijay Chemical Industries, Voxco Pigments and Chemicals Private Limited. Subsequent to oral hearing, the Authority has received support letters from Kroma Industries and Asahi Tennants as well. 26. As regards the submission that the supporters have also imported the product, the Authority has examined the DG Systems data and it is seen that out of 9 supporters, only 2 supporters, namely *** (*** MT) and *** (*** MT) have imported the product during the period of investigation. The volume of imports made by the supporters is less than 1% in relation to their production. 27. The other interested parties have contended that support letters should be disregarded, as these domestic producers have not complied with the requirements laid down vide Trade Notices 13/2018 and Trade Notices 14/2018. The Authority considers that Trade Notices 13/2018 has been replaced by Trade Notice 4/2021 dated 16th June 2021 which allows the supporters to express support with limited information concerning capacity, production, and sales. The Authority has considered the support expressed by other producers in the present investigation only for the purpose of examining the standing of the domestic industry. Since detailed data has not been provided by the supporters, the same is not a part of injury analysis. 28. Based on the information on record, the Authority notes that the production of the applicant constitutes *** of the total Indian production of the like article in India. Together with the supporters, the applicant accounts for *** of the total domestic production. +------------------------+-------+---------+---------+---------+-------+ | Particular | Unit | 2020-21 | 2021-22 | 2022-23 | POI | +========================+=======+=========+=========+=========+=======+ | Production of Applicant| MT | 100 | 94 | 86 | 104 | +------------------------+-------+---------+---------+---------+-------+ | Sudharshan | MT | *** | *** | *** | *** | +------------------------+-------+---------+---------+---------+-------+ | MSME Companies - Supporter| MT | 100 | 124 | 109 | 114 | +------------------------+-------+---------+---------+---------+-------+ | Unity Dye Chem Pvt. Ltd.| MT | *** | *** | *** | *** | +------------------------+-------+---------+---------+---------+-------+ | Kwalichem Pvt. Ltd. | MT | *** | *** | *** | *** | +------------------------+-------+---------+---------+---------+-------+ | MICAS Organics Ltd. | MT | *** | *** | *** | *** | +------------------------+-------+---------+---------+---------+-------+ | Hercules Pigments Pvt.Ltd.| MT | *** | *** | *** | *** | +------------------------+-------+---------+---------+---------+-------+ | Voxco Pigments & Chemicals Pvt. Ltd.| MT| *** | *** | *** | *** | +------------------------+-------+---------+---------+---------+-------+ | Vijay Chemical Industries (VCI)| MT| *** | *** | *** | *** | +------------------------+-------+---------+---------+---------+-------+ | Anupam Colors Pvt. Ltd.| MT | *** | *** | *** | *** | +------------------------+-------+---------+---------+---------+-------+ | Other Indian production| MT | 100 | 93 | 85 | 103 | +------------------------+-------+---------+---------+---------+-------+ | Total Production | MT | 43,046 | 42,658 | 38,808 | 45,342| +------------------------+-------+---------+---------+---------+-------+ | Share in total production| | | | | | +------------------------+-------+---------+---------+---------+-------+ | Share of Applicant | % | 25-35% | 25-35% | 25-35% | 25-35%| +------------------------+-------+---------+---------+---------+-------+ | Share of Supporters | % | 15-25% | 20-30% | 20-30% | 15-25%| +------------------------+-------+---------+---------+---------+-------+ | Total Applicant + Supporter| % | 45-55% | 50-60% | 50-60% | 45-55%| +------------------------+-------+---------+---------+---------+-------+ | Other Indian production| % | 45-55% | 45-55% | 45-55% | 45-55%| +------------------------+-------+---------+---------+---------+-------+ 29. In view of the above, considering the provisions of Rule 2(b) and the facts of the case, the Authority holds that the applicant accounts for a major proportion of the total domestic production of the like product in India. The Authority holds that the applicant constitutes as domestic industry within the meaning of Rule 2 (b) and satisfies the criteria of standing in terms of Rule 5(3) of the Rules. E. CONFIDENTIALITY AND MISCELLANEOUS SUBMISSIONS E. 1 Submission made by the other interested parties. 30. The other interested parties have submitted as follows with regards to confidentiality and miscellaneous: a. The applicant has indexed data for support letters. b. The non-confidential version of the application violates the requirements of Rule-7 and Trade Notice 1/2013. Response to Section VI- (Costing information) has been claimed confidential. c. The applicant has not brought any substantive evidence to establish the conditions for initiation of anti- dumping investigation and the Authority has not carried out appropriate scrutiny on the same. d. Since the applicant has imported the product, they shall be considered as importer and required to file importer questionnaire response. However, they failed to file importers' questionnaire response as per Trade Notice 06/2018. e. The applicant failed to address crucial issues on Russia Ukraine War, depressed market conditions globally, unprecedent increase in the prices of raw materials and indirect material etc. f. None of the MSME producers have provided full data including their financial performance with respect to the product under consideration. g. The applicant has claimed PCN data confidential without providing any meaningful summary of the same. E. 2 Submission made by the applicant. 31. The applicant has submitted as follows with regards to confidentiality and miscellaneous: a. The other interested parties failed to provide comments on the confidentiality claims within the prescribed time-limit. b. Trade notices do not require each individual support letters to be in indexed format. The aggregated data of the trade notice has been provided in trend. с. Costing information is a business sensitive information of the company. Reference placed on Anwar Jute Spinning Mills Ltd, Nitro Chemicals Industries Vs. DA. Which allows considering costing formation as confidential. d. Contrary to the claims that the applicant has not provided sufficient evidence, the other interested parties have not provided single area where the applicant has failed to provide evidence. e. Requirement to file importer questionnaire response under trade notice 06/2018 is applicable to the importers of the subject goods and not to the producers of the product. The applicant has already provided all the required information regarding the imports made by them. E. 3 Examination by the Authority 32. The Authority made available the non-confidential version of the information provided by the various parties to all the other interested parties as per Rule 6(7). 33. With regard to confidentiality of information, Rule 7 of Anti-dumping Rules provides as follows: "Confidential information: (1) Notwithstanding anything contained in sub-rules (2), (3) and (7)) of rule 6, sub-rule(2) of rule 12,sub-rule(4) of rule 15 and sub-rule (4) of rule 17, the copies of applications received under sab-rule (1) of rule 5, or any other information provided to the designated authority on a confidential basis by any party in the course of investigation, shall, upon the designated authority being satisfied as to its confidentiality, be treated as such by it and no such information shall be disclosed to any other party without specific authorization of the party providing such information. (2) The designated authority may require the parties providing information on confidential basis to furnish non-confidential summary thereof and if, in the opinion of a party providing such information, such information is not susceptible of summary, such party may submit to the designated authority a statement of reasons why summarization is not possible. (3) Notwithstanding anything contained in sub-rule (2), if the designated authority is satisfied that the request for confidentiality is not warranted or the supplier of the information is either unwilling to make the information public or to authorize its disclosure in a generalized or summary form, it may disregard such information." 34. The submissions made by the applicant and the other interested parties concerning confidentiality, to the extent considered relevant, have been examined. On being satisfied, the Authority has accepted the confidentiality claims, wherever warranted, and such information has been considered confidential and not disclosed to the other interested parties. Wherever possible, parties providing information on a confidential basis were directed to provide sufficient non-confidential versions of the information filed on a confidential basis. The Authority also notes that all the interested parties have claimed their business-related sensitive information as confidential. 35. With regards to the submissions made by the other interested parties that the applicant has not brought any substantive evidence to provide the condition for initiation of anti-dumping investigation and the investigating Authority has not carried out appropriate scrutiny of facts, the Authority notes that the applicant had provided sufficient information that meets the required conditions for initiation of the present investigation. The investigation was initiated after satisfying that sufficient prima-facie evidence, as required under Rules. 36. With reference to the contention raised by other interested parties that the applicant has not filed importer questionnaire as per Trade Notice 06/2018, the Authority notes that the requirement to file the questionnaire applies to importers or users of the product, not to producers. The applicant has provided information on the imports made by it and it is seen that the imports are negligible. The primary focus of the applicant remains on producing the product rather than importing the product. Therefore, the contention raised by the other interested parties cannot be accepted. F. NORMAL VALUE, EXPORT PRICE AND DETERMINATION OF DUMPING MARGIN F.1 Submissions made by other interested parties. 37. The other interested parties have made the following submissions with regard to normal value, export price and dumping margin: a. Dumping margin claimed by the applicant is inflated. Subject goods cover various subtypes which have significant difference in the cost and price. b. Export prices of other countries are much higher compared to Chinese export price because of difference in grades and quality. These prices should not be compared with China's export price for dumping margin determination. с. Cost of production should be considered as basis for determination of normal value. d. Relevant provisions of protocol on China's accession to the WTO expired in 2016 and China can no longer be treated as non-market economy. e. Lily group has exported significant commercial volumes. No volume threshold has been prescribed under rules for granting individual margin. The applicant cannot prescribe barrier to this determination in terms of volume of export being 10 MT. f. The applicant has not provided any evidence or law to justify that the calculation of dumping margin and injury margin based on low volume of exports will not be appropriate. g. The exports made by Longkou Union Chemical Co. Ltd. are *** MT, which is *** % of total imports from the subject country and *** % of the total imports. *** % is more than de-minims. If ***% volume is considered enough to consider a country for anti-dumping investigation, then *** % of the total imports cannot be considered as insignificant volume. h. The export price of Color Shanghai cannot be rejected solely on the ground that the volume is very low. The Authority is free to construct the export price if the export price is unreliable. However, in the present investigation, no such situation exists. i. The applicant has relied on anti-dumping investigation concerning imports of welded stainless-steel pipes and tubes from Thailand and Vietnam. In that investigation, the Authority may have been concerned that the exporter/producer were aware of the landed price and manipulated export volumes to align prices accordingly. Consequently, the low export volumes might have been deemed an unreliable reflection of actual prices. However, this is not the case in the present investigation. j. If the applicant has a fear of being injured in future because of imports, the same can be always remedied through the means of review investigations. F.2 Submission made by the applicant 38. The applicant has made the following submissions with regard to normal value, export price and dumping margin: a. None of the responding producers from subject country have filed MET questionnaire. Hence, the normal value should be determined as per para 7 of Annexure I of rules. b. Para 7 lays down hierarchy for determination of normal value. Normal value has to be determined in a sequential manner and the same was confirmed in the case of Shenyang Matsushita S. Battery Co. Ltd. vs Exide Industries Ltd. с. The applicant had exercised the options available under Para 7 of Annexures I to the Rules in the chronological order. The volume of imports from Korea RP is more than de-minimis and therefore these imports can be considered as a basis for normal value. d. Level of development is not relevant when export price is considered from market economy country. Reference drawn from Kuitun Jinjiang Chemical Industry CO. Ltd. Vs Designated Authority. e. Exporters have not provided evidence for their claims that the dumping margin is inflated. The import prices from Korea represent global market prices of the product. The applicant has exported the product at similar prices to other countries. This is the price at which the product is sold in the other markets. f. In the initiation notification, the Authority had sought comments on the normal value methodology claimed by the applicant, but till the date of oral hearing, no comments have been made. g. Interested parties have argued that imports from China PR and Korea RP differ in grades. However, no evidence has been provided in support of the claim. h. Lily Group, Jiangxi Longyuan Chemical Co., Ltd. and Colors & Effects Shanghai Ltd have exported insignificant volume during period of investigation. With insignificant volume of imports, analysis of dumping margin and injury margin will not be appropriate. i. The dumping margin based on exports of low volume will distort the determination. There is no commercial volume exported by Lily group. The volume of exports made by Lily group is *** % of total Indian demand and *** % of the total exports from China PR. Further these exports have not taken place consistently over the period of investigation. Lily has only exported red pigment in *** months and yellow pigment in *** months. j. In anti-dumping duty investigation concerning imports of Welded Stainless-Steel Pipes and Tubes originating in or exported from Thailand and Vietnam, the Authority had found it to be inappropriate to determine dumping margin for the producer and exporter with low volume of trade. k. If dumping margin is determined based on such insignificant export volumes, it will be negative, and the producers will attract no measures and get complete market access to the Indian market. F.3 Examination by the Authority 39. The response to exporters questionnaire has been filed by the following producers/exporters from China PR: i. Colors & Effects Shanghai Limited ii. Longkou Union Chemical Co., Ltd. iii. Lily Group Co. Ltd. iv. Ruian Baoyuan Chemical Industry Co, Ltd. V. Trust Chem Co., Ltd. vi. Worldwide Colorants & Chemical Company Limited vii. Zhejiang Shengda Charter Win Chemical Co., Ltd Determination of Normal value and Export Price F.3.1 Normal value for China PR 40. Article 15 of China's Accession Protocol in WTO provides as follows: “Article VI of the GATT 1994, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (“Anti-Dumping Agreement”) and the SCM Agreement shall apply in proceedings involving imports of Chinese origin into a WTO Member consistent with the following: (a) In determining price comparability under Article VI of the GATT 1994 and the Anti-Dumping Agreement, the importing WTO Member shall use either Chinese prices or costs for the industry under investigation or a methodology that is not based on a strict comparison with domestic prices or costs in China based on the following rules: (i) If the producers under investigation can clearly show that market economy conditions prevail in the industry producing the like product with regard to the manufacture, production and sale of that product, the importing WTO Member shall use Chinese prices or costs for the industry under investigation in determining price comparability; (ii) The importing WO Member may use a methodology that is not based on a strict comparison with domestic prices or costs in China if the producers under investigation cannot clearly show that market economy conditions prevail in the industry producing the like product with regard to manufacture, production and sale of that product. (b) In proceedings under Parts II, III and V of the SCM Agreement, when addressing subsidies described in Articles 14(a), 14(b), 14(c) and 14(d), relevant provisions of the SCM Agreement shall apply; however, if there are special difficulties in that application, the importing WTO member may then use methodologies for identifying and measuring the subsidy benefit which take into account the possibility that prevailing terms and conditions in China may not always be available as appropriate benchmarks. In applying such methodologies, where practicable, the importing WTO Member should adjust such prevailing terms and conditions before considering the use of terms and conditions prevailing outside China. (c) The importing WTO Member shall notify methodologies used in accordance with subparagraph (a) to the Committee on Anti-Dumping Practices and shall notify methodologies used in accordance with subparagraph (b) to the Committee on Subsidies and Countervailing Measures. (d) Once China has established, under the national law of the importing WTO Member, that it is a market economy, the provisions of subparagraph (a) shall be terminated provided that the importing Member's national law contains market economy criteria as of the date of accession. In any event, the provision of subparagraph (a)(ii) shall expire 15 years after the date of accession. In addition, should China establish, pursuant to the national law of the importing WTO member, that market economy conditions prevail in a particular industry or sector, the nonmarket economy provisions of subparagraph (a) shall no longer apply to that industry or sector." 41. The applicant has relied upon Article 15(a)(i) of China's the Accession Protocol as well as para 7 of the Annexure I. The applicant had claimed that producers in China PR must be asked to demonstrate that market economy conditions prevail in their industry producing the like product with regard to the manufacture, production and sale of the product under consideration. It has been stated by the applicant that in case the responding Chinese producers are not able to demonstrate that their costs and price information are market- driven, the normal value should be calculated in terms of provisions of Para 7 and 8 of Annexure- I to the Rules. 42. It is noted that while the provision contained in Section 15 (a)(ii) has expired on 11.12.2016, the provision under Article 2.2.1.1 of WTO Anti-dumping Agreement read with the obligation under Section 15(a)(i) of the Accession Protocol require criterion stipulated in paragraph 8 of Annexure I of the Rules to be satisfied through the information/data to be provided in the supplementary questionnaire on claiming market economy treatment. It is noted that since the responding producers/exporters from China PR have not submitted response to the supplementary questionnaire the normal value computation is required to be done as per the provisions of paragraph 7 of Annexure I of the Rules. 43. As none of the producers from China PR have claimed determination of normal value on the basis of their own data/information, the normal value has been determined in accordance with paragraph 7 of Annexure I of the Rules, which reads as under: "7. In case of imports from non-market economy countries, normal value shall be determined on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other countries, including India, or where it is not possible, on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted if necessary, to include a reasonable profit margin. An appropriate market economy third country shall be selected by the designated authority in a reasonable manner [keeping in view the level of development of the country concerned and the product in question and due account shall be taken of any reliable information made available at the time of the selection. Account shall also be taken within time limits; where appropriate, of the investigation if any made in similar matter in respect of any other market economy third country. The parties to the investigation shall be informed without unreasonable delay the aforesaid selection of the market economy third country and shall be given a reasonable period of time to offer their comments." 44. Para 7 lays down a hierarchy for the determination of normal value and provides that normal value shall be determined on the basis of price or constructed value in a market economy third country, or the price from such a third country to any other country, including India, or where it is not possible, on any other reasonable basis, including the price actually paid or payable in India for the like article, duly adjusted, if necessary, to include a reasonable profit margin. Thus, the Authority notes that the normal value is required to be determined having regard to the various sequential alternatives provided under Para 7. 45. The Authority also notes the existing jurisprudence on constructing the normal value in the case of a non- market economy contained in various judgements. These judgements provide directions regarding the implementation of Para 7 of Annexure I of the Rules concerning the choice of an appropriate option, and associated obligations thereof. 46. At the stage of application, the applicant has claimed normal value on the basis of price from such third country to other countries including India. For this purpose, the applicant had considered the export price from Korea RP into India. It is noted that as per the hierarchy given in the law, the normal value should first be determined on the basis of the price or constructed value in a market economy third country, and in the absence of price or constructed value in a market economy third country, the normal value shall be based on the price of exports from such country to other countries, including India. In this regard, the Authority notes the findings of the Hon'ble CESTAT in the case of Kuitun Jinjiang Chemical Industry Co. Ltd. vs. Union of India, wherein it was held that when normal value is determined based on exports from a market economy third country to India, the relevant criteria for determining appropriate market economy third country is the volume of exports from such country and that the country should not be dumping during the period of investigation. The Authority notes that the volume of imports from Korea is low. Further, the interested parties have also contended that there is a difference in the product profile exported from China PR and Korea RP. The Authority has therefore not considered exports from Korea to India for the purposes of computation of Normal Value. 47. In the absence of sufficient information on record regarding the other methods as provided in Para 7 of Annexure I of the AD Rules, the Authority has determined the normal value by considering the method on "any other reasonable basis". The Authority has constructed the normal value for China PR on the basis of cost of production in India, duly adjusted, including selling, general and administrative expenses and reasonable profits. The constructed normal value so determined for Chinese producers/exporters is mentioned in the dumping margin table below. 48. The normal value so determined is mentioned in the dumping margin table below. F.3.2 Export price for China PR a. Ruian Baoyuan Chemical Industry Co. Ltd. 49. During the POI, Ruian Baoyuan Chemical Industry Co, Ltd., China PR has reported the sale of *** MT of invoice value *** RMB of subject goods to India indirectly through an unrelated exporter/trader namely, Trust Chem Co., Ltd., China PR. Out of which Trust Chem Co., Ltd., China PR has sold *** MT of subject goods directly to India to unrelated buyers in India and the rest *** MT has been sold to India indirectly through two related exporters/traders namely, Trust Chem Hong Kong Limited, Hong Kong and Worldwide Colorants & Chemical Company Limited, Hong Kong. 50. Analysis of questionnaire responses filed by Trust Chem Co. Ltd., Trust Chem Hon Kong Limited and Worldwide Colorants & Chemicals Company Limited shows these companies have incurred expenses for exporting the goods to India. Sales made by these companies were examined and it was seen that these companies have exported to India at a profit after accounting for all direct expenses and SGA expenses. Since these companies have sold the product at a profit and are unrelated companies, the Authority has accepted their questionnaire responses and has concluded that it would be appropriate to determine the export price on the basis of the price at which Ruian Baoyuan Chemical Industry Co. Ltd. has sold the material to Trust Chem Co. Ltd. 51. The producer has reported price adjustments on account of inland transportation and credit cost, and the same has been allowed by the Authority. Accordingly, the export price at the ex-factory level for Ruian Baoyuan Chemical has been determined and the same is shown in the Dumping Margin table. b. Zhejiang Shengda Charter Win Chemical Co. Ltd 52. Zhejiang Shengda Charter Win Chemical Co. Ltd, a producer of the subject goods in China PR has participated and filed a questionnaire response. Zhejiang Shengda Charter has exported the subject goods directly to unrelated customers in India. 53. During the period of investigation, Zhejiang Shengda Charter has exported *** MT of the subject goods to India at the invoice value *** US$. The producer and exporter have claimed price adjustments on account of ocean freight, insurance, inland transportation and port and related expenses, credit cost, bank charges, and the same has been allowed by the Authority. Accordingly, export price at ex-factory level for Zhejiang Shengda Charter has been determined and the same is shown in the Dumping Margin table. с. Longkou Union Chemical Co., Ltd. 54. Longkou Union Chemical Co., Ltd., a producer of the subject goods in China PR has participated and filed a questionnaire response. Longkou Union Chemical has reported the subject goods directly as well as through Colors & Effects Shanghai Limited. 55. During the period of investigation, it has reported direct exports of *** MT of the subject goods of invoice value *** US$ to India. The producer has reported *** MT of goods having invoice value of *** USD$ exported to India through Colors & Effects Shanghai Limited. 56. From the response filed by ***, it was seen that *** has reported purchases from Longkou Union Chemical which have then been exported to India. However, the producer has not provided information in respect of the above sales. Further, a perusal of DG System Transaction Wise data also showed that *** invoices appearing in the DG system import data were not reported in the response. 57. A communication was sent to the producer seeking clarification. The producer has reported that it did not report exports to ***, believing the sales did not fall under the product under consideration. 58. The Authority observes that a producer cannot unilaterally assume a particular grade is outside the scope of the product under consideration and withhold relevant information, particularly when it indeed falls within the scope of the product under consideration. It is further noted that another participating producer, *** and the major exporter *** have correctly reported the above transaction as part of the product under consideration. Clarification was also sought from the applicant, who confirmed that the grade in question is indeed part of the product under consideration. It is also seen that this particular grade was specifically mentioned as part of the product under consideration in the application filed by the applicant. The applicant in para 14 of the application provided the table below :- +-----+--------+--------------------------------------------------+ | SN | Types | Grade | +=====+========+==================================================+ | 1 | Orange | PO 13, PO 34, PO 5, PO 36 etc. | +-----+--------+--------------------------------------------------+ | 2 | Red | PR 57:1, PR 53:1, PR 48:1, PR 48:2, PR 48:3, PR 48:4, PR 49:1, PR| | | | 52:1, PR 63:1, PR 146, PR 170, PR 210, PR 184, PR 188, PR 112,| | | | PR 2, PR 3, PR 4, PR 5, PR 8, PR 22, PR 38, PR 81:1, PR 81:2, PR| | | | 81:3, PR 81:4, PR 12 etc. | +-----+--------+--------------------------------------------------+ | 3 | Yellow | PY 13, PY 174, PY 191, PY 74, PY 12, PY 14, PY 17, PY 1, PY 3, PY| | | | 62, PY 63, PY 73, PY 65, PY 83, PY 168, PY 183 | +-----+--------+--------------------------------------------------+ 59. Further, the Authority notes that a simple examination reveals that the specific grade is indeed an AZO Pigment and forms part of the product under consideration. Even during the verification process, the producer did not highlight that this particular specialized grade had been excluded in the data reported. 60. The producer has also claimed that the two transactions were missed because of the "system error". The producer never highlighted the issue during any stage of the investigation or verification and this issue came to light only when the Authority identified the unreported transaction. 61. Longkou Union failed to provide complete and accurate details of its exports to India. The explanation given casts serious doubts over the completeness and accuracy of the questionnaire response and the reliability of the information provided by the producer. The Authority is also not in a position to determine whether the complete volume of exports of the product under consideration has been reported by Longkou Union. As a result, the Authority is unable to determine the export price for the producer. The Authority is, therefore, constrained to rely on the facts available. d. Lily Group Co. Ltd. 62. Lily Group Co. Ltd., a producer of the subject goods in China PR has participated and filed a questionnaire response. Lily Group Co. Ltd. has reported direct export of the subject goods. 63. During the period of investigation, Lily Group Co. Ltd. has reported export of *** MT of the subject goods of FOB invoice value *** US$ to India. 64. During desk verification of the data submitted by the participating producers, the Authority found that Trust Chem Co. Ltd. has reported exports to India of product purchased from Lily Group Co. Ltd. A clarification was sought from Lily Group Co. Ltd. on its transaction-wise details indirect exports to India and sales to Trust Chem Co. Ltd. Lily Group Co. Ltd. has stated the following in its response: - It is further submitted in this regard that Lily Group has sold the subject goods in the domestic market to an unaffiliated trader namely Zhejiang Xinkai Technology Group Co, Ltd and Lily Group is not aware whether any part of such material has been exported to India eventually by the said trader. Lily Group issues VAT invoice to Zhejiang Xinkai and the transactions are accorded as domestic sales in the records of Lily Group. Facts in this regard can be crosschecked from the response of Zhejiang Xinkai Technology Group Co, Ltd in case they file any response 65. The producer has further claimed as follows “..In case Trust Chem Co. Ltd. had purchased the material from any of the of the Traders from China we are not aware of such transactions.". 66. Lily Group Co. Ltd. was asked to provide information on transaction-wise sales to Trust Chem Co. Ltd. Trust Chem Co. Ltd. has reported the purchase and export of *** MT of the product under consideration from Lily Group Co. Ltd. Lily Group Co. Ltd. has not provided the above information. 67. Lily Group Co. Ltd. has reported domestic sales of *** MT to ***. The Authority notes that when Lily Group Co. Ltd. has direct exports of only *** MT to India, the information on account of *** is missing and has not been provided by the producer. 68. Lily Group Co. Ltd. failed to provide complete and accurate details of its exports to India. The Authority notes that in a situation where full information concerning exports to India is not on record and when the exporter concerned has admitted that the information is not available, the Authority is not in a position to determine the export price for the producer concerned. The authority is thus constrained to rely on the facts available. e. Jiangxi Longyuan Chemical Co. Ltd. 69. Jiangxi Longyuan Chemical Co. Ltd., a producer of the subject goods in China PR has participated and filed a questionnaire response. Jiangxi Longyuan Chemical Co. Ltd. has reported the export of the subject goods directly. 70. During the period of investigation, Jiangxi Longyuan Chemical Co. Ltd. has reported export of *** MT of the subject goods of FOB invoice value *** US$ to India. Jiangxi Longyuan Chemical Co. Ltd. in its questionnaire response has stated that it has only made direct exports to India. 71. However, *** has reported purchase of *** MT from Jiangxi Longyuan Chemical Co. Ltd. which has been exported to India. Clarification concerning the above information was sought from the producer. Jiangxi Longyuan Chemical Co. Ltd. has stated that ‘The reason why Color & Effect Shanghai Limited was not reported as our indirect exporter relates to lack of knowledge regarding its re-export to India'. 72. Jiangxi Longyuan failed to provide complete and accurate details of its exports to India. The Authority notes that in a situation where full information concerning exports to India is not on record and when the exporter concerned has admitted that the information is not available, the Authority is not in a position to precisely determine the export price for the producer concerned. The authority is thus constrained to rely on the facts available. f. Any other exporter. 73. The net export price for the other producers has been determined based on the facts available in terms of Rule 6(8) and is shown in the dumping margin table. F.3.3 Dumping margin 74. The dumping margin determined for each co-operating producer/exporter based on a PCN-wise constructed normal value and net export price, is given below. It is seen that the dumping margin is positive. +-----+----------------------------------------+-----------+--------------+----------------+---------------+---------+ | SN | Particulars | Normal | Net export | Dumping | Dumping | Range | | | | value | price | Margin | Margin | | | | | USD/MT | USD/MT | USD/MT | % | % | +=====+========================================+===========+==============+================+---------------+=========+ | 1 | Ruian Baoyuan Chemical Industry Co. Ltd.| *** | *** | *** | *** | 40-50 | +-----+----------------------------------------+-----------+--------------+----------------+---------------+---------+ | 2 | Zhejiang Shengda Charter Win Chemical | *** | *** | *** | *** | 10-20 | | | Co. Ltd | | | | | | +-----+----------------------------------------+-----------+--------------+----------------+---------------+---------+ | 3 | Any other | *** | *** | *** | *** | 55-65 | +-----+----------------------------------------+-----------+--------------+----------------+---------------+---------+ G. EXAMINATION OF INJURY AND CAUSAL LINK G. 1 Submissions made by other interested parties. 75. The other interested parties have made the following submissions with regard to injury and causal link: a. The imports from subject country increased with the increase in demand. This increase in imports is aligned with market growth. The imports from subject country hardly account for 5% share in demand. b. Imports increased to fulfil demand and supply gap due to increase in demand. с. The import price of the product has increased in the period of investigation by 9% compared to base year. Therefore, the submission of the applicant that import price has caused a decline in PBT by 68% is irrational and is not explained. d. The sales of the applicant and supporters have increased in the period of investigation. This shows that the Indian industry's sales increased with increase in demand and is not affected by imports. e. The applicant's profits declined while other producers' profit have increased. If supporters performed well despite imports, the applicant could have also similarly enhanced their performance. f. There has been increase in interest and depreciation cost during the period of investigation. g. Base year was impacted due to Covid 19 conditions and the raw material prices in that period were high which resulted in price increase and supply chain disruption. Any comparison of injury with base year cannot give accurate picture. h. The inventory with the applicant has declined in the period of investigation. i. Despite having surplus capacities in the market, the applicant has increased in capacities for the product. j. The profit, PBIT and cash profit increased in the period of investigation compared to previous year. Had the applicant been adversely affected, the performance parameters would have further deteriorated. k. The increase in the cost of sales by 14% in the period of investigation as compared to base year is due to increase in the interest cost. 1. The profitability of the applicant was impacted by other factors and not by the import price and it is evidence that the fall in profits could be on account of substantial increase in depreciation and interest cost. m. Return on capital employed for the purpose of non-injurious price should not be allowed at 22% n. There is an overlap of 6 months between the period of investigation and previous year, but the performance has not deteriorated between period of investigation as compared to previous years. 0. The submission of the applicant that comparison between performance in domestic and export market shows injury in the domestic market has no legal basis. The alleged injury is on the domestic operation only and as a matter of practice, export performance is not taken into cognizance. p. The applicant has claimed segment wise analysis of injury. The injury is required to be determined for domestic operations as a whole. ৭. In the annual report of the applicant, several other factors have been highlighted as factors affecting injury. r. The applicant has failed to address crucial issues on Russia Ukraine War, depressed market conditions globally, unprecedent increase in the prices of raw materials and indirect material etc S. The applicant produces different type of pigments, and it is a possibility that it utilizes the same plant for producing other pigments as well. The applicant has not provided production data for NPUC. t. The profitability was impacted due to other factors such as shutdown and on account of increase in depreciation and interest cost. G.2 Submissions made by the applicant. 76. The applicant has made the following submissions with regard to injury and causal link: a. Performance of the period of investigation should be compared with year 2020-2021 or 2021-2022 and not 2022-2023. Period of investigation overlaps with preceding year and the applicant has already filed an application claiming injury in 2022-2023. b. Despite there being no demand supply gap, the imports from the subject country have increased in the period of investigation. As a result, applicant profitability sharply declined in the period of investigation. с. The landed price of imports is below the cost of sales of the applicant. If the situation of dumping continues and the applicant is forced to match the import prices, it will suffer from financial losses, cash flow issue and negative ROI. d. The dumping margin is exceptionally high, showing that the Chinese producers are willing to ship at whatever price offered. e. Demand for the product declined in 2021-22, increased in 2022-23 and further increased in the period of investigation. Overall, the demand for the product has increased in the investigation period. f. While the imports from China have increased in 2022-23 and in period of investigation, the imports from other countries have declined. Imports from China PR constitute more than 80% of total imports. g. The applicant has sacrificed significantly on the profitability to hold its market. The low-priced imports have impacted the applicant profitability. h. The low-priced imports from China PR are undercutting the prices and cost of the applicant on PCN wise basis as well as on weighted average basis. i. When the cost of sales declined in period of investigation, the selling price of the applicant has declined by higher rate. The applicant's prices are depressed. j. The applicant has expanded its capacity in 2021-2022 and in 2022-23. The Indian industry has the sufficient capacity to cater the entire demand in India. k. The production, capacity utilization and domestic sales declined in 2022-23 and marginally increased in the period of investigation. 1. Despite increase in the demand, the applicant has accumulated inventories throughout investigating period. m. The profits of the applicant declined by 68% as compared to base year and 74% as compared to 2021-22 in the period of investigation. n. The profits of the applicant steeply declined in 2022-23 and then increased marginally in the period of investigation. 0. Cash profit and PBIT have also declined almost by 42% in period of investigation compared to 2021-22. p. As the low-priced imports from China PR increased, the applicant's return on investment declined. In the period of investigation, the ROI of the applicant declined by 70% compared to base year. q. The low-priced imports severely impacted on the prices of the applicant and resulted in decline in profitability. The landed price of subject imports is approx. Rs *** MT lower than the fair value. r. Applicant has experienced negative growth in price parameters. S. Decline in profitability has impaired applicant's ability to raise further capital. Since the Indian industry is MSME industry, they cannot continue to inject fund into their business if the same is not reasonably profitable. t. The applicant has exported the product to various countries. The profits of the applicant are higher in export market compared to domestic market. The profit in the export market shows that the applicant suffered injury in domestic market due to dumped imports. u. The market for the product can be divided into three categories – inks, coatings and plastics. The imports are taking place in inks and coating segment. Applicant is suffering from real wrath of injury in the Inks and Coatings market segment. V. Report of the Appellate Body in case of Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan allows Authority to undertake segment wise analysis. W. The domestic sales of the applicant in inks and coatings have not increased in relation to increase in demand. The profitability of the sales meant for Coatings Division has declined by more than 80% over the injury period and more than 70% in case of Inks segment. X. As regards the submission that the depreciation and interest cost have increased, it is due to increase in the capacity of the applicant. y. On the submission of the interested parties that import price has increased, there are more than 200 color mix sold by the applicant and imported from China PR. Considering such huge product mix, an average comparison of one year with another year cannot be made. Z. As the low-priced imports increased in 2022-23 and in the period of investigation, the profits of the applicant declined in 2022-2023 with marginal increase in the period of investigation. aa. It is the consistent practice of the Designated Authority and the view taken by the Hon'ble Tribunal, at least a return of 22% has to be allowed to the applicant. bb. The other interested parties have not provided any evidence while alleging number of factors causing injury to the applicant. Further, the applicant is exporting the product globally at very high prices. cc. The rules require Authority to segregate the impact, and other interested parties were required to identify the factor. Reference is placed on the WTO Panel Report – X-ray equipment. dd. The inter-se competition existed in the years 2020-21 and 2021-22. If it were the cause of injury, the applicant would have experienced harm in those years as well. ee. The low-priced imports from China PR have impacted the operations of other producers as well. While larger producers may be able to endure the injury for a short period, survival becomes increasingly difficult for the MSME producers. G.3. Examination by the Authority 77. Rule 11 of the Anti-Dumping Rules read with Annexure II provides that an injury determination shall involve examination of factors that may indicate injury to the domestic industry, “... taking into account all relevant facts, including the volume of dumped imports, their effect on prices in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles.. ". In considering the effect of the dumped imports on prices, it is considered necessary to examine whether there has been a significant price undercutting by the dumped imports as compared with the price of the like article in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree. 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. 78. The Authority has taken note of 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 in light of applicable laws. The injury analysis made by the Authority addresses various submissions made by the domestic industry and other interested parties. 79. With regard to the contention by other interested parties that the injury to the domestic industry is due to the internal problems, depressed market conditions globally, fluctuations in the prices of raw materials, Russia Ukraine War etc., Authority notes that the interested parties have advanced mere statements and have not produced any verifiable documentary evidence to substantiate their claims. The demand in the domestic market shows an increase in the period of investigation; and, therefore, the contention that the injury is due to "depressed market conditions globally" cannot be considered. As regards injury due to Russia Ukraine conflict and depressed market conditions globally, the Authority has considered the data of the applicant for domestic operations only. The Authority also draws reference to the WTO Panel Report in China – X-Ray Equipment, wherein the Panel held that where an interested party identifies a factor other than dumped imports causing injury but does not provide evidence showing how this factor is causing injury to the domestic industry, the investigating authority is not required to make a determination with regard to that factor. 80. The other interested parties have contended that the profitability of the other producers has increased. The applicant on the other hand has stated that the profitability of the other producers is also adversely affected. Further, the Authority notes that reliance cannot be placed only on the annual reports as the investigation pertains to the product under consideration and not the entire scope of operations of the domestic industry. 81. With regard to the submission made by other interested parties for consideration of return of 22% for determination of non-injurious price is not appropriate, the Authority notes that it has consistently allowed 22% return on capital employed. There is no justification to deviate from this practice and thus the same has been adopted in the present investigation as well. 82. As regards the submission that capacity of the applicant is being utilized for other products as well, the Authority notes that the capacity for the production of PUC only has been considered. The non-product under consideration is produced at separate plants at the same location and their operations have no bearing on the operations of the product under consideration. 83. With regards to the contention raised by other interested parties that the decline in profitability is because of the substantial increase in interest and depreciation cost, the table below shows the relevant information on depreciation and interest cost and cash profits and PBIT. +-----+--------------------+---------+---------+---------+---------+-------+ | SN | Particular | UOM | 2020-21 | 2021-22 | 2022-23 | POI | +=====+====================+=========+=========+=========+=========+=======+ | 1 | Depreciation cost | Rs/MT | *** | *** | *** | *** | | | Trend | Indexed | 100 | 106 | 131 | 120 | +-----+--------------------+---------+---------+---------+---------+-------+ | 2 | Interest cost | Rs/MT | *** | *** | *** | *** | | | Trend | Indexed | 100 | 119 | 223 | 193 | +-----+--------------------+---------+---------+---------+---------+-------+ | 3 | Cash profits | Rs/MT | *** | *** | *** | *** | | | Trend | Indexed | 100 | 126 | 47 | 47 | +-----+--------------------+---------+---------+---------+---------+-------+ | 4 | PBIT | Rs/MT | *** | *** | *** | *** | | | Trend | Indexed | 100 | 119 | 64 | 62 | +-----+--------------------+---------+---------+---------+---------+-------+ 84. It is seen that the depreciation cost and interest cost increased till 2022-23 on account of capacity expansion, but has declined in the period of investigation. The cash profits and PBIT have also declined in the period of investigation. It is also seen that even when the depreciation cost has increased by Rs *** per MT and the interest cost has increased by Rs *** per MT, the cash profit has declined by Rs *** per MT. The profit before interest and tax has also declined by Rs *** per MT. As the decline in the cash profit and profit before interest and tax is much higher than the increase in the cost on account of depreciation and interest costs, the Authority is unable to appreciate the arguments attributing depreciation and interest costs as primary reasons for injury to the domestic industry. 85. The Authority notes that the applicant had earlier filed the application proposing 2022-23 as the period of investigation. The applicant had claimed that the imports from the subject country were entering the domestic market at dumped and claimed to have suffered from material injury. Therefore, the applicant has requested to not compare performance in the period of investigation with 2022-23. The other interested parties have claimed that the base year was impacted by Covid-19 and therefore, comparison should not be made with base year. The Authority examined the data for the entire injury period including the period of investigation to see if the producer has suffered material injury. The purpose of determination of a period of investigation and the complete injury period for injury assessment is to consider the performance of the domestic industry for the entire period of four years. Therefore, the Authority has compared the performance of the domestic industry from the base year and the performance in the intervening period has been given due weightage. 86. It has been claimed that the injury suffered is due to inter-se competition between domestic producers. The Authority notes the decision of the Appellate Body in European Union – Biodiesel (Argentina), wherein it was held that an Authority is not required to conduct a non-attribution analysis with respect to features that are inherent to an industry and have remained unchanged over the injury period. 87. The Authority notes that the inter-se competition existed even during the year 2020-21 and 2021-22 and if that was the cause of the injury, the applicant would have suffered in those years as well. However, the domestic industry has not suffered injury during these years. G.3.1 Assessment of demand/apparent consumption 88. For determination of demand/apparent consumption of the product in India, the Authority has considered the domestic sales of the applicant, domestic sales of the supporters (as per support letter of producers who supported at the stage of initiation), domestic sales of other Indian producers (as per estimate provided by the applicant) and imports from all sources. +-----+-----------------------------+---------+---------+---------+---------+-------+ | SN | Demand/Consumption | Unit | 2020-21 | 2021-22 | 2022-23 | POI | +=====+=============================+=========+=========+=========+=========+=======+ | 1 | Sales by applicant | MT | *** | *** | *** | *** | | | Trend | Indexed | 100 | 91 | 91 | 102 | +-----+-----------------------------+---------+---------+---------+---------+-------+ | 2 | Sales of supporters | MT | *** | *** | *** | *** | | | Trend | Indexed | 100 | 124 | 129 | 124 | +-----+-----------------------------+---------+---------+---------+---------+-------+ | 3 | Sales of other Indian producers| MT | *** | *** | *** | *** | | | Trend | Indexed | 100 | 93 | 92 | 111 | +-----+-----------------------------+---------+---------+---------+---------+-------+ | 4 | Imports from subject country| MT | 1,809 | 1,645 | 1,863 | 2,137 | +-----+-----------------------------+---------+---------+---------+---------+-------+ | 5 | Imports from other countries| MT | 480 | 514 | 412 | 405 | +-----+-----------------------------+---------+---------+---------+---------+-------+ | 6 | Total Demand in India | MT | *** | *** | *** | *** | | | Trend | Indexed | 100 | 97 | 99 | 111 | +-----+-----------------------------+---------+---------+---------+---------+-------+ 89. It is seen that demand for the product under consideration declined in 2021-22 marginally, increased in 2022- 23 marginally, and further increased in the period of investigation. The demand has increased over the injury period. G.3.2 Volume effect of dumped imports on the domestic industry 90. With regards to the volume of dumped imports, the Authority is required to consider whether there has been a significant increase in the dumped imports, either in absolute terms or relative to production or consumption in India. For the purpose of the injury analysis, the Authority has relied on the DG system import data. The information is as below: +-----+-----------------------------+---------+---------+---------+---------+-------+ | SN | Particulars | Unit | 2020-21 | 2021-22 | 2022-23 | POI | +=====+=============================+=========+=========+=========+=========+=======+ | A | Imports volume | | | | | | +-----+-----------------------------+---------+---------+---------+---------+-------+ | 1 | Imports from subject country| MT | 1,809 | 1,645 | 1,863 | 2,137 | +-----+-----------------------------+---------+---------+---------+---------+-------+ | 2 | Imports from other countries| MT | 480 | 514 | 412 | 405 | +-----+-----------------------------+---------+---------+---------+---------+-------+ | B | Subject Imports in relation to| | | | | | +-----+-----------------------------+---------+---------+---------+---------+-------+ | 1 | India consumption | % | *** | *** | *** | *** | | | Trend | Indexed | 100 | 93 | 105 | 107 | +-----+-----------------------------+---------+---------+---------+---------+-------+ | 2 | India production | % | *** | *** | *** | *** | | | Trend | Indexed | 100 | 92 | 114 | 112 | +-----+-----------------------------+---------+---------+---------+---------+-------+ | 3 | Total imports | % | 79% | 76% | 82% | 84% | +-----+-----------------------------+---------+---------+---------+---------+-------+ 91. It is seen that: - a. The volume of imports from China PR declined in 2021-22, increased in 2022-23 and further increased in the period of investigation. b. The imports have increased over the injury period. The imports have increased in comparison to the base year as well as immediately preceding year. с. While the imports from subject country have increased, the imports from other countries have declined over the injury period. d. The imports in relation to production and consumption have remained constant over the injury period. e. The imports from the subject country hold more than 80% share in the total imports to India throughout the investigation period. G.3.3 Price effect of the dumped imports 92. With regard to the effect of the dumped imports on the prices, it is required to be analyzed whether there has been a significant price undercutting by the alleged dumped imports as compared to the price of the like products in India, or whether the effect of such imports is otherwise to depress the prices or prevent the price increase, which otherwise would have occurred in the normal course. The impact on the prices of the domestic industry on account of the dumped imports from the subject country with reference to the price undercutting and price suppression/ depression, if any. For the purpose of this analysis, the cost of production and the selling price of the domestic industry have been compared with the landed price of the imports of the subject goods from the subject country. a. Price undercutting 93. For the purpose of price undercutting analysis, the net sales realization of the domestic industry has been compared with the landed value of imports from the subject country. Weighted average price undercutting has been determined considering price undercutting for the Azo Pigment color-wise and their associated import volumes and import value. 94. The table below shows PCN wise price undercutting: - +-----+-------------------------+---------+---------+---------+---------+---------------+ | SN | Particulars | Unit | Red | Yellow | Orange | Weighted | | | | | | | | Average | +=====+=========================+=========+=========+=========+=========+===============+ | 1 | Import volumes | MT | 1,032 | 1,056 | 49 | 2,137 | +-----+-------------------------+---------+---------+---------+---------+---------------+ | 2 | Landed price of imports | Rs./MT | *** | *** | *** | *** | +-----+-------------------------+---------+---------+---------+---------+---------------+ | 3 | Net Selling realization | Rs./MT | *** | *** | *** | *** | +-----+-------------------------+---------+---------+---------+---------+---------------+ | 4 | Price Undercutting | Rs./MT | *** | *** | *** | *** | +-----+-------------------------+---------+---------+---------+---------+---------------+ | 5 | Price Undercutting | % | *** | *** | *** | 5% | +-----+-------------------------+---------+---------+---------+---------+---------------+ | 6 | Price Undercutting | Range | Negative| 10-20 | 0-10 | 0-10 | +-----+-------------------------+---------+---------+---------+---------+---------------+ 95. It is seen that landed price of subject imports in the period of investigation is significantly below the selling price of applicant resulting in positive price undercutting. b. Price suppression/depression 96. In order to determine whether the dumped imports are suppressing or depressing the domestic prices and whether the effect of such imports is to depress such prices to a significant degree or prevent price increase which otherwise would have occurred in normal course, the changes in the costs and prices over the injury period are examined as below: +-----+-------------------------+---------+---------+---------+---------+-------+ | SN | Particulars | Unit | 2020-21 | 2021-22 | 2022-23 | POI | +=====+=========================+=========+=========+=========+=========+=======+ | 1 | Cost of sales | Rs./MT | *** | *** | *** | *** | | | Trend | Index | 100 | 114 | 131 | 114 | +-----+-------------------------+---------+---------+---------+---------+-------+ | 2 | Net Selling realization | Rs./MT | *** | *** | *** | *** | | | Trend | Index | 100 | 116 | 121 | 105 | +-----+-------------------------+---------+---------+---------+---------+-------+ | 3 | Landed price | Rs./MT | 500,545 | 608,295 | 603,528 | 538,439| | | Trend | Index | 100 | 122 | 121 | 108 | +-----+-------------------------+---------+---------+---------+---------+-------+ 97. It is seen that the cost of sales and selling price of the applicant increased in 2021-22. The increase in selling price was higher than the cost of sales. The cost of sales and selling price further increased in 2022-23. However, the selling price did not increase in proportion to the increase in the cost. In the period of investigation, while the cost of sales has declined, the selling price has declined at a rate more than the decline in cost. It is therefore seen that the prices of the applicant are suppressed. G.3.4 Economic parameters of the domestic industry 98. Annexure II to the Anti-Dumping Rules provide that the examination of the impact of the dumped imports on the domestic industry should include an objective and unbiased evaluation of all the relevant economic factors and indices having a bearing on the state of the industry, including actual and potential decline in the sales, profits, output, market share, productivity, return on investments or utilization of capacity; factors affecting domestic prices, the magnitude of the margin of the dumping; actual and potential negative effects on the cash flow, inventories, employment, wages, growth and the ability to raise the capital investments. The various injury parameters relating to the domestic industry are discussed below. The Authority has examined the injury parameters objectively taking into account various facts and arguments made by the interested parties in their submissions: a. Capacity, production, capacity utilization and domestic sale 99. The Authority has considered capacity, production, capacity utilization and domestic sales of the applicant over the injury period. +-----+---------------------+---------+---------+---------+---------+-------+ | SN | Particulars | Unit | 2020-21 | 2021-22 | 2022-23 | POI | +=====+=====================+=========+=========+=========+=========+=======+ | 1 | Capacity | MT | *** | *** | *** | *** | | | Trend | Index | 100 | 101 | 111 | 111 | +-----+---------------------+---------+---------+---------+---------+-------+ | 2 | Production | MT | *** | *** | *** | *** | | | Trend | Index | 100 | 94 | 86 | 104 | +-----+---------------------+---------+---------+---------+---------+-------+ | 3 | Capacity utilization| % | *** | *** | *** | *** | | | Trend | Index | 100 | 93 | 77 | 93 | +-----+---------------------+---------+---------+---------+---------+-------+ | 4 | Domestic sales | MT | *** | *** | *** | *** | | | Trend | Index | 100 | 91 | 91 | 102 | +-----+---------------------+---------+---------+---------+---------+-------+ 100. It is seen that: a. The applicant has increased its capacity over the injury period. b. The production and capacity utilization of the applicant declined in 2021-22, further declined in 2022-23 and then increased in the period of investigation. Whereas the production in the POI was higher than the production in base year, the capacity utilization in the POI was lower than the capacity utilization in the base year. с. The domestic sales of the applicant have also shown a similar trend. d. It has been submitted by the applicant that to hold its domestic sales and market share in the domestic market, it compromised on its profitability. b. Market share 101. The Authority has examined the effect of the dumped imports on the market share of the domestic industry and other Indian producers as under. +-----+----------------------------+---------+---------+---------+---------+-------+ | SN | Market share of | Unit | 2020-21 | 2021-22 | 2022-23 | POI | +=====+============================+=========+=========+=========+=========+=======+ | 1 | Applicant | % | *** | *** | *** | *** | | | Trend | Indexed | 100 | 94 | 92 | 92 | +-----+----------------------------+---------+---------+---------+---------+-------+ | 2 | Supporters | % | *** | *** | *** | *** | | | Trend | Indexed | 100 | 127 | 131 | 112 | +-----+----------------------------+---------+---------+---------+---------+-------+ | 3 | Other Indian producers | % | *** | *** | *** | *** | | | Trend | Indexed | 100 | 95 | 94 | 100 | +-----+----------------------------+---------+---------+---------+---------+-------+ | 4 | Imports from China PR | % | *** | *** | *** | *** | | | Trend | Indexed | 100 | 93 | 105 | 107 | +-----+----------------------------+---------+---------+---------+---------+-------+ | 5 | Imports from Other countries| % | *** | *** | *** | *** | | | Trend | Indexed | 100 | 110 | 87 | 76 | +-----+----------------------------+---------+---------+---------+---------+-------+ 102. It is seen that the market share of applicant declined in 2021-22 and has remained at same level till the POI. The market share of the supporters increased in 2021-22 and then remained at similar level in 2022-23 and then declined in the period of investigation. The market share of dumped imports has remained at similar levels over the investigation period. It has been submitted by the applicant that to hold its domestic sales and market share in the domestic market, it compromised on its profitability. с. Inventories 103. The inventory position with the applicant over the injury period is given in the table below: +-----+----------------+---------+---------+---------+---------+-------+ | SN | Particulars | Unit | 2020-21 | 2021-22 | 2022-23 | POI | +=====+================+=========+=========+=========+=========+=======+ | 1 | Opening stock | MT | *** | *** | *** | *** | +-----+----------------+---------+---------+---------+---------+-------+ | 2 | Closing stock | MT | *** | *** | *** | *** | +-----+----------------+---------+---------+---------+---------+-------+ | 3 | Average stock | MT | *** | *** | *** | *** | | | Trend | Index | 100 | 92 | 93 | 81 | +-----+----------------+---------+---------+---------+---------+-------+ 104. It is seen that the average inventory with the domestic industry declined in 2021-22. This was the period when the volume of imports had also declined. However, the average inventory increased marginally in 2022-23 but declined in the period of investigation. d. Profitability, cash profits and return on capital employed. 105. The performance of the applicant has been examined in respect of profitability, profits, cash profits, PBIT, and return on investment. +-----+---------------------------+---------+---------+---------+---------+-------+ | SN | Particulars | Unit | 2020-21 | 2021-22 | 2022-23 | POI | +=====+===========================+=========+=========+=========+=========+=======+ | 1 | Profit/ (Loss) per unit | Rs./MT | *** | *** | *** | *** | | | Trend | Index | 100 | 127 | 29 | 32 | +-----+---------------------------+---------+---------+---------+---------+-------+ | 2 | Profit/ (Loss) as % of cost| Rs./MT | *** | *** | *** | *** | | | Trend | Index | 100 | 111 | 22 | 28 | +-----+---------------------------+---------+---------+---------+---------+-------+ | 3 | Total Profit/Loss before tax| Lacs | *** | *** | *** | *** | | | Trend | Index | 100 | 115 | 26 | 33 | +-----+---------------------------+---------+---------+---------+---------+-------+ | 4 | Cash Profit per unit | Rs./MT | *** | *** | *** | *** | | | Trend | Index | 100 | 119 | 64 | 62 | +-----+---------------------------+---------+---------+---------+---------+-------+ | 5 | Total Cash Profit | Lacs | *** | *** | *** | *** | | | Trend | Index | 100 | 109 | 58 | 63 | +-----+---------------------------+---------+---------+---------+---------+-------+ | 6 | PBIT per unit | Rs./MT | *** | *** | *** | *** | | | Trend | Index | 100 | 126 | 47 | 47 | +-----+---------------------------+---------+---------+---------+---------+-------+ | 7 | Total PBIT | Lacs | *** | *** | *** | *** | | | Trend | Index | 100 | 115 | 42 | 48 | +-----+---------------------------+---------+---------+---------+---------+-------+ | 8 | ROCE | % | *** | *** | *** | *** | | | Trend | Index | 100 | 87 | 32 | 36 | +-----+---------------------------+---------+---------+---------+---------+-------+ 106. It is seen that: a. As compared to the base year, the profits of the applicant improved in 2021-22. However, as the low- priced imports increased, the profits of the applicant declined significantly in 2022-23. Even though, profits of the domestic industry marginally increased in the period of investigation, the same were still materially below the earlier period. b. The profits of the applicant have declined by 68% over the injury period. When compared with the year 2021-22, the profit of the applicant in the period of investigation declined by 75%. с. The profit as % of cost declined from ***% in the base year to ***% in the period of investigation. d. The cash profit per unit and PBIT per unit increased in 2021-22, declined in 2022-23 and further declined in the period of investigation. The cash profit and PBIT are lowest in the period of investigation. e. Total cash profit and PBIT increased in 2021-22, declined in 2022-23 and then witnessed a marginal increase in the period of investigation. f. The return on capital investment declined sharply in the period of investigation as compared to base year as well as 2021-22. The return on investment declined to almost 1/3rd in the POI as compared to base year. e. Employment, wages and productivity 107. Employment, wages and productivity of the applicant over the injury period are given in the table below: +-----+----------------------+---------+---------+---------+---------+-------+ | SN | Particulars | Unit | 2020-21 | 2021-22 | 2022-23 | POI | +=====+======================+=========+=========+=========+=========+=======+ | 1 | No of Employees | Nos | *** | *** | *** | *** | | | Trend | Index | 100 | 115 | 108 | 103 | +-----+----------------------+---------+---------+---------+---------+-------+ | 2 | Productivity per day | MT | *** | *** | *** | *** | | | Trend | Index | 100 | 94 | 86 | 104 | +-----+----------------------+---------+---------+---------+---------+-------+ | 3 | Wages | Lacs | *** | *** | *** | *** | | | Trend | Index | 100 | 111 | 104 | 110 | +-----+----------------------+---------+---------+---------+---------+-------+ 108. It is seen that: a. The number of employees with the applicant increased in 2021-22 but has declined in 2022-23 and further declined in the period of investigation. b. The productivity per day and wages paid by the domestic industry have improved in the period of investigation. с. The applicant has submitted that these parameters are dependent on several other parameters and therefore do not reflect the injury suffered by the industry. f. Growth 109. The growth of the applicant in terms of capacity, production, domestic sales volume, PBT, PBIT, cash profits and the return on capital employed is as per given table below: +-----+--------------------------+-------+---------+---------+-------+ | SN | Particulars | Unit | 2021-22 | 2022-23 | POI | +=====+==========================+=======+=========+=========+=======+ | 1 | Capacity | Y/Y | 1% | 9% | 0% | +-----+--------------------------+-------+---------+---------+-------+ | 2 | Production | Y/Y | -7% | -9% | 17% | +-----+--------------------------+-------+---------+---------+-------+ | 3 | Domestic Sales Volume | Y/Y | -10% | 0% | 11% | +-----+--------------------------+-------+---------+---------+-------+ | 4 | Inventory | Y/Y | -9% | 2% | -15% | +-----+--------------------------+-------+---------+---------+-------+ | 5 | PBT per unit | Y/Y | 27% | -98% | 3% | +-----+--------------------------+-------+---------+---------+-------+ | 6 | PBIT per unit | Y/Y | 26% | -79% | 0% | +-----+--------------------------+-------+---------+---------+-------+ | 7 | Cash Profit per unit | Y/Y | 19% | -56% | -2% | +-----+--------------------------+-------+---------+---------+-------+ | 8 | Return on Capital Employed| Y/Y | -13% | -55% | 4% | +-----+--------------------------+-------+---------+---------+-------+ 110. It is seen the volume parameters of the applicant showed negative growth in 2021-22. In the same period, the price parameters, barring ROCE showed positive growth. In the year 2022-23, the applicant experienced significant negative growth in price parameters and no or negative growth in volume parameters. In the period of investigation, the applicant has seen negative growth in some of the price parameters, and positive growth in the volume parameters. However, the growth in all the parameters was much lower as compared to deterioration in the preceding year. Overall growth of the domestic industry was mildly positive in volume parameters and significantly negative in all price parameters. g. Magnitude of dumping margin. 111. The magnitude of dumping is an indicator of the extent to which the imports are being dumping into India. The investigation has shown that the dumping margin is positive and significant during the period of investigation. h. Ability to raise capital investment. 112. The Authority notes that as the import price declined, the profitability and return on capital employed by the applicant declined significantly over the injury period. Resultantly, the ability of the applicant to raise capital investment has been significantly impacted. i. Factors affecting the prices. 113. Examination of the import data shows that the import price from China PR is materially below the cost of sales and selling price of the applicant. Due to lower price of imports, the applicant was unable to align its selling price in proportion to the changes in the cost. As a result, the profitability of the applicant declined sharply over the injury period. The imports from China PR have affected the prices of the applicant. Conclusion on Injury 114. On the basis of the factors as examined above the following has been concluded: a. The subject imports have increased in absolute term over the injury period. The subject imports in relation to production and consumption have remained at similar levels over the injury period. b. The imports are below the selling price of the domestic industry resulting in positive price undercutting. с. The domestic industry has been unable to increase its prices in line with the increase in the cost. Dumped imports were suppressing the prices of the domestic industry in the market. d. The domestic industry has increased its capacity over the injury period. The domestic industry is operating with idle capacities. e. Faced with the low-priced imports, the domestic industry has been forced to sacrifice its profitability to retain its domestic sales and production. f. The profits of the domestic industry have declined by 68% over the injury period. g. The cash profit and profit before interest have declined significantly over the injury period. h. The return on investment declined to almost 1/3rd in the period of investigation as compared to base year. i. The domestic industry has faced negative growth in price parameters. j. The dumping margin is significant. 115. The Authority therefore concludes that the domestic industry has suffered material injury. H. CAUSAL LINK AND NON-ATTRIBUTION ANALYSIS 116. As per the Rules, the Authority, inter alia, is required to examine any known factors other than the dumped imports which are injuring or are likely to cause injury to the applicant, so that the injury caused by these other factors may not be attributed to the dumped imports. Factors which may be relevant in this respect include, inter alia, the volume and prices of imports not sold at dumped prices, contraction in demand or changes in the patterns of consumption, trade restrictive practices of and competition between the foreign and the domestic producers, developments in technology and the export performance and the productivity of the applicant. It has been examined below whether the factors listed under the Rules could have contributed to the injury suffered by the applicant. a. Volume and price of imports from third countries 117. Imports from the subject country constitute 84% share in the total imports into India. The imports of the subject goods from other countries are at higher prices and hence are not causing injury to the applicant. b. Contraction in demand 118. It is seen that the demand for the subject goods has increased over the injury period. Therefore, the applicant has not suffered injury due to possible contraction in demand. с. Changes in the pattern of consumption 119. There has been no known material change in the pattern of consumption of the product under consideration. d. Trade restrictive practices 120. No interested parties have provided any evidence relating to any known trade restrictive practice, which could have caused injury to the applicant. Therefore, the Authority concludes that trade restrictive practice has not caused injury to the applicant. e. Development of technology 121. The Authority notes that the technology for the production of the subject goods has not undergone any change. Hence, development in technology has not caused injury to the applicant. f. Export performance 122. 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 applicant. g. Performance of other products 123. The Authority has considered data relating to the performance of the subject goods only. Therefore, the performance of the other products produced and sold by the applicant is not a possible cause of injury. Conclusion on causal injury 124. It is seen that there are no other factors which could have caused injury to the domestic industry. Therefore, the Authority concludes that the injury to the domestic industry has been caused by dumped imports, as is established by below. a. Imports from the subject country are at dumped prices. The import price is below the cost and selling price of the domestic industry. Resultantly, imports were undercutting the prices of the domestic industry in the market. b. The price undercutting caused by the dumped imports has suppressed the prices of the domestic industry in the market. The domestic industry was unable to increase its price in same proportion to increase in cost. с. Due to price suppression, the profitability of the domestic industry declined over the injury period. d. The domestic industry recorded lowest profit before tax, cash profit and PBIT in the period of investigation. The return on capital employed declined sharply. These were a result of price suppression caused by dumped imports. e. The domestic industry decided to hold its market share and sacrifice on the profitability. f. Domestic industry has recorded negative growth in price parameters. I. MAGNITUDE OF INJURY MARGIN 125. The Authority has determined the non-injurious price for the applicant 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 applicant. The non-injurious price has been compared with the landed price of the product under consideration from the subject country for calculating the injury margin. For determining the non-injurious price, the best utilization of the raw materials and utilities and the 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. 126. The landed price and non-injurious price determined as above have been compared for the Azo Pigment on a PCN basis. The weighted average of the injury margin determined for the producers/exporters is provided in the table below: +-----+---------------------------------------+---------+--------------+--------------+-------------+---------+ | SN | Particulars | NIP | Landed | Injury | Injury | Range | | | | USD/MT | price | margin | margin | % | | | | | USD/MT | USD/MT | % | | +=====+=======================================+=========+==============+==============+-------------+=========+ | 1 | Ruian Baoyuan Chemical Industry Co. Ltd.| *** | *** | *** | *** | 20-30 | +-----+---------------------------------------+---------+--------------+--------------+-------------+---------+ | 2 | Zhejiang Shengda Charter Win Chemical | *** | *** | *** | *** | 0-10 | | | Co. Ltd | | | | | | +-----+---------------------------------------+---------+--------------+--------------+-------------+---------+ | 3 | Any other | *** | *** | *** | *** | 30-40 | +-----+---------------------------------------+---------+--------------+--------------+-------------+---------+ J. INDIAN INDUSTRY INTEREST AND OTHER ISSUES J.1 Submissions made by other interested parties. 127. The other interested parties have made the following submissions with regard to the Indian industry's interest: a. Azo Pigment are essential for various industries and imposition of duty could disrupt supply chain, leading to increase in cost and reduce availability for downstream industry. b. Imposition of duty could lead to job losses and economic setbacks, impacting local economies and livelihoods. с. Azo pigments do form part of one or the other raw material for the downstream industry. d. The applicant claims of CSR expenditure incurred under "Sudha" program are society initiatives and are irrelevant in anti-dumping investigation. This assertion is baseless and divert attention from the core issues. J.2 Submissions made by the applicant. 128. The applicant has made the following submissions with regard to the Indian industry's interest: a. The product is not a basic raw material for production of downstream products. The product is used as a coloring agent. Therefore, it does not form a significant part of the operation of the downstream industry. b. There is wide range of grades in product under consideration. While usage concentration in some grades is higher, the concentration of others is lower. с. Imposition of measure will not lead to monopoly as there are 15 producers in India and there are imports from other countries as well. The Indian industry will be required to compete inter-se and with other sources. d. Indian industry has capacity of around *** MT against demand of *** MT for the product. India has surplus capacities to cater the demand. e. Though the applicant is a public listed company, other producers belong to MSME sector. While the applicant may be able to sustain for short period. other producers may be unbale to sustain. f. MSME producers are primarily single product company. The livelihood of MSME producers is dependent on their continued operations. g. Applicant has introduced a program called “Sudha” to improve people's standard of living. The funding for this program comes from the profits earned. During POI, close to Rs. 1000 lakh has been spent on the program. Decline in profitability due to dumping will adversely affect these initiatives. h. The applicant is regularly exporting the product, demonstrating that the applicant is capable of meeting the global standards, quality and technical requirements. i. The absence of a user questionnaire from the participating user indicates that users will not be adversely impacted. J.3 Examination by the Authority. 129. The Authority considered whether imposition of the proposed 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. 130. 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 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 imposition of the anti-dumping duty. 131. The Authority had prescribed an economic interest questionnaire which was sent to all interested parties in this investigation. Apart from the applicant, none of the interested parties have provided information on the impact of measures. The applicant has quantified the following impact of anti-dumping duty. +-----+---------------------------------+---------+----------+----------+-------+ | SN | Particulars | Unit | Coatings | Plastics | Inks | +=====+=================================+=========+----------+----------+-------+ | 1 | Estimated price of downstream product| ₹/Kg | 200 | 300 | 250 | +-----+---------------------------------+---------+----------+----------+-------+ | 2 | Azo import price from China | ₹/Kg | 550 | 550 | 550 | +-----+---------------------------------+---------+----------+----------+-------+ | 3 | Increase in price by 5% | ₹/Kg | 27.5 | 27.5 | 27.5 | +-----+---------------------------------+---------+----------+----------+-------+ | 4 | AZO share in downstream | % | 7% | 18% | 13% | +-----+---------------------------------+---------+----------+----------+-------+ | 5 | Increase in cost | ₹/Kg | 1.93 | 4.95 | 3.58 | +-----+---------------------------------+---------+----------+----------+-------+ | 6 | Impact in % | % | 0.96% | 1.65% | 1.43% | +-----+---------------------------------+---------+----------+----------+-------+ 132. It is seen that the impact of imposition of anti-dumping duty on end consumers is insignificant. The Authority also notes that no user has participated in the present investigation claiming the adverse impact of measures. The product under consideration is a coloring agent and not a major raw material to produce a product. 133. It has been contended that there is a demand and supply gap in India. The Authority notes that the Indian industry has the capacity of more than 60,000 MT as against the demand of *** MT. It is seen that the Indian industry has sufficient capacity to cater the entire demand in the country. 134. With regard to the contention that the applicant is trying to monopolize the market and that the anti-dumping duty will impact downstream industry, the Authority notes that imposition of anti-dumping duty does not restrict imports. Imports will continue to happen at fair prices. Anti-dumping duty ensures that the imports are entering the Indian market at fair prices and a level playing field is maintained between the foreign exporters and the Indian industry. Imposition of anti-dumping duty will not create monopoly of the applicant in the Indian market. Apart from the applicant, there are 14 other producers of the subject goods in the Indian market. 135. The Authority notes that barring a few producers, all other producers of product in India belong to the MSME sector. Imposition of duties would help them to arrest the decline in their performance and protect their legitimate interests. Imposition of duties would help the producers to stay viable and competitive. Κ. Post disclosure submissions. K.1 Submissions made by other interested parties 136. The other interested parties have made the following comments to the disclosure statement:- a. The Authority did not consider the role of major domestic producers such as Huber Group India Private Limited and Heubach Colorants India Ltd. Huber and Heubach have significant market shares and production capacities. Exclusion undermines the representativeness of the domestic industry. b. Azo pigments from China PR are superior to Indian pigments, in terms of specific surface treatments required for high-quality applications such as offset inks. с. Use of the "surrogate country" in calculating the normal value, lacks a multilateral legal basis post-2016 following the expiry of certain provisions under China's WTO accession protocol. d. The use of a 22% ROCE for determining the non-injurious price is outdated. The rate was established in 1987 when interest rates and corporate taxes were significantly higher. Thus, applying the same rate today inflates injury margins and offers undue protection to the domestic industry. e. There are discrepancies in the import data presented in the disclosure statement compared to the data submitted by the domestic industry. The differences in import volumes could affect the injury analysis and should be reconciled. f. The refusal to grant induvial dumping margin to Lily Group Co. Ltd. violated Rule 17(3) of the anti- dumping rules. The Authority should not penalize the producer for indirect exports made by unrelated parties, of which it had no knowledge. The Authority can use Indian customs data to verify the total imports attributable to Lily Group. g. It is DGTR practice not to include secondary packaging costs while determining NIP. Reference is placed on recent investigation on imports of Easy Open Ends where the Authority excluded secondary packaging costs from the NIP and called for a consistent approach in the current case. h. The Authority while determining the impact of anti-dumping duties on end users underestimated the potential impact on import prices. i. "Facts available" methodology has been applied to Longkou Union Chemical Co. Ltd. data due to missing transaction records. The company acknowledged that two transactions were omitted from its questionnaire response but explained that this was due to a system error linked to their revenue recognition process. j. The Authority is lenient towards the domestic industry regarding the delay in disclosing self-imports and strict standards are applied to the exporters for the delay in the disclosure of the information. k. Jiangxi Longyuan Chemical Co., Ltd. omission of certain indirect export sales was unintentional and stemmed from a lack of knowledge regarding the ultimate destination of its sales made to an unrelated company, Color & Effect Shanghai Ltd. 1. In response to a clarification request from the Authority dated 4th February 2025, Jiangxi Longyuan Chemical Co., Ltd promptly submitted details of its exports to Color & Effect Shanghai Ltd, including sales invoice numbers and quantities involved in the indirect exports. Despite this, the Authority maintained that Jiangxi Longyuan Chemical Co., Ltd had failed to provide complete information and applied the "facts available” methodology. m. Jiangxi Longyuan Chemical Co., Ltd had reported its domestic sales to Color & Effect Shanghai Ltd in the Appendix 4A. Therefore, it cannot be considered that the producer did not provide adequate information. n. Authority has failed to exercise "special circumspection" before applying facts available. All the necessary information was on record. The Authority could have computed the export price by cross- referencing data from Jiangxi Longyuan Chemical Co., Ltd and CES. K.2 Submissions made by the domestic industry 137. The domestic industry has made the following comments to disclosure statement:- a. For an individual dumping margin, a complete and accurate questionnaire response is crucial. Exporters must fully establish normal value and export price. In the present investigation, producers failed to do so. Thus, they are not eligible for an individual dumping margin. b. To claim an individual dumping margin, producers must disclose all exports made to India. If producers sell material to unrelated exporters who do not respond, the Authority cannot determine the final export price of the goods to India. It is essential that all involved parties submit complete questionnaire responses. с. In the present investigation, Jiangxi Longyuan Chemical Co. Ltd., Lily Group Co. Ltd., and Longkou Union Chemical Co., Ltd. have not provided information on their exports through merchant exporters, leading to a deficient response by the producer. d. The Authority has in past investigations not accepted responses filed by the producers whose value chain was not complete. e. In various jurisdictions, it's common practice to reject responses from producers who don't submit complete information on time. The USDOC requires producers to provide full information to the best of their ability. If necessary information is missing or if the exporter fails to meet deadlines, impedes the process, or provides unverifiable data, the USDOC considers them uncooperative and may apply adverse inferences. f. The Authority's determination of normal value and non-injurious price did not account for secondary packaging has led to understated dumping and injury margins. g. Ruian Baoyuan Chemical Industry Co. Ltd and Zhejiang Shengda Charter Win Chemical Co. Ltd have not reported primary and secondary packing expenses. h. The exporters have not submitted complete information regarding necessary export price adjustments, which is crucial for fair comparison with normal value and non-injurious price. i. The Authority hasn't considered packing expenses in export price calculations. While the normal value and non-injurious price exclude secondary packing, the export price and landed price include it. The global practice is to adjust secondary packing in export price calculations. j. The NIP determined by the Authority excludes secondary packing expense. Principle of fair comparison requires adjustment of the same in the landed price as well. k. The volume of imports from China PR further increased in the post period of investigation. While the import price has declined in the post period of investigation, the cost of production has not declined at the same rate. 1. Anti-dumping duty should be recommended for a period of 5 years as barring the applicant, the other producers belong to MSME sector. K.3 Examination by the Authority 138. The Authority has examined the post-disclosure submissions made by the interested parties. It is observed that the majority 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. For the sake of brevity, the Authority has refrained from repeating the responses to such issues in this post- disclosure examination. However, any new issues raised for the first time in the post-disclosure submissions, as well as those previously addressed but deemed by the Authority to require further examination, are examined and addressed hereinunder. 139. On the contention that the impact of anti-dumping duty considered by the Authority undermines the potential impact on the prices, the Authority has recorded the facts based on the information provided by various interested parties during the course of the investigation. None of the other interested parties have quantified the impact of proposed anti-dumping duty on end consumers. The Authority acknowledges that the imposition of anti-dumping duties may influence the price levels of the product in India. However, it is crucial to note that the essence of fair competition in the Indian market will remain unscathed by the imposition of these measures. Further, the disclosure statement has already examined the impact of anti-dumping duty on end consumers, and it is not significant. 140. On the contention that secondary packing should be included in the non-injurious price, the Authority notes that the non-injurious price has been determined as per the principle enshrined in Annexure III of the AD Rules and the consistent practice of the Authority. However, the Authority notes that the secondary packing cost is included in the landed price of imports and the ex-factory export price determined for the participating producer. The Authority notes that principles of fair comparison require a fair comparison of domestic industry prices with import prices. Domestic industry and imports compete with each other at the same level. Comparison of non-injurious price, which does not include secondary/tertiary packing, with import price which includes secondary/tertiary packaging would be inappropriate and not in accordance with the Annexure-I of the rules. It is also seen that Jiangxi Longyuan Chemical Co., Ltd has reported price adjustment of *** USD/MT on account of secondary packaging. Further, Longkou Union Chemical Co., Ltd has informed that the average secondary packaging cost is *** USD/MT which consists of corrugated boxes and pallets. In view of the above, the Authority considers it appropriate to adjust the ex-factory export price and landed price with the secondary packaging cost. Since two of the participating producers have provided relevant information, the Authority has considered lower of the two packaging costs as reported by these companies. The net export price and the landed price of the participating producers have been re-quantified and shown in the dumping margin and injury margin tables above in the respective para. 141. With respect to the claims for individual margins and application of facts available by Lily Group Co., Ltd., Jiangxi Longyuan Chemical Co., Ltd., and Longkou Union Chemical Co., Ltd, the Authority notes the argument that since all necessary information is now on record, the Authority should not apply facts available and should determine individual margins based on the submitted data. The Authority, however, is unable to accept this argument, as the missing transactions were discovered by the Authority during the verification process, rather than being voluntarily disclosed by the exporters. The exporters were required to provide a complete and accurate disclosure of all export transactions to India in their questionnaire responses. 142. The Authority finds that the failure to report all export transactions in a timely manner has significantly impacted the accuracy and reliability of the submitted data. The omission of transactions, particularly those routed through traders, directly affects the determination of export price and dumping margin. The belated submission of the data, on being pointed out by the authority, does not remedy the exporters' failure to comply with the established procedural requirements. Further, given the structure of indirect exports observed in the investigation, the possibility about the involvement of multiple traders in supplying the exporters' products to India cannot be ruled out. 143. The completeness of data is a fundamental requirement for determining individual margins, and that the exporters only provided the missing data after the Authority identified discrepancies and therefore the Authority deems it appropriate to apply facts available under Rule 6(8) of the Anti-Dumping Rules. 144. Accordingly, the Authority maintains that facts available methodology will be applied to determine the dumping margins for Lily Group Co., Ltd., Jiangxi Longyuan Chemical Co., Ltd., and Longkou Union Chemical Co., Ltd. 145. The exporters have argued that the Authority applied stricter standards to exporters for delays in disclosing information, while being more lenient toward the domestic industry's delayed reporting of self-imports. The Authority rejects this argument, as there is a fundamental difference in the nature and materiality of the delayed disclosures. 146. The domestic industry voluntarily disclosed its self-imports at an early stage of the investigation through an official letter, followed by written submissions providing complete details. In contrast, the missing export transactions from the exporters were identified by the Authority during verification, rather than being proactively reported by the exporters themselves. 147. Furthermore, the volume of self-imports reported by the domestic industry was insignificant in comparison to its total production and sales, whereas the undisclosed exports by the exporters had a direct impact on the dumping margin calculation. The materiality of these omissions thus differs significantly. 148. Therefore, the Authority finds that the comparison drawn by the exporters between their omissions and the domestic industry's delayed reporting of self-imports is not valid. L. Conclusion 149. Having regard to the contentions raised, information provided, and submissions made by the interested parties and facts available before the Authority, as recorded in the above findings, and on the basis of above analysis of the dumping, injury and causal link to the domestic industry, the Authority concludes as follows: a. The product under consideration is Azo pigment, a class of synthetic organic pigments widely used in various industries, including paints, cosmetics, inks, and textiles. b. Azo pigment is traded in three different colors such as Yellow Pigment, Red Pigment and Orange Pigment. Every colour has different grades, and each grade has different chemical concentrations and properties and therefore has different end use application. All three forms are part of the product under consideration. с. Apart from the applicant – Sudarshan Chemical Industries, there are a number of other producers of the subject goods in India. The other producers belong to MSME sectors. d. The present application is supported by the Pigments Manufacturers Association of India and other producers, including Anupam Colours Private Limited, Hercules Pigments Private Limited, Kwalichem Private Limited, Micas Organic Limited, Unity Dye Chem Private Limited, Vijay Chemical Industries, Voxco Pigments and Chemicals Private Limited, Kroma Industries, and Asahi Tennants. e. The applicant imported small volume of the product during the period of investigation. The volume of imports made by the applicant in relation to applicant production and domestic sales is less than 0.005% and 0.005% respectively. The imports made by the applicant are not in such volume as to disentitle it from being treated as eligible domestic industry. f. The applicant constitutes domestic industry within the meaning of Rule 2(b) and satisfies the criteria of standing in terms of Rule 5(3) of the Rules. Production of the applicant constitutes a major proportion in the total Indian production. g. After examining the responses file by Longkou Union Chemical Co., Ltd, Lily Group Co. Ltd. and Jiangxi Longyuan Chemical Co. Ltd, the Authority found the response filed by these producers were deficient and insufficient to determine individual dumping margin. The Authority has not determined individual dumping margin in respect of these producers. h. Considering the normal value and export price for the subject goods, PCN wise, the dumping margin for the subject goods from the subject country has been determined and the margin is positive. i. The volume of imports increased over the injury period. The imports from subject country in relation to production and consumption have remained at similar level over the injury period. The imports from subject country hold more than 80% share in the total imports. j. The import price of product under consideration is significantly lower than the domestic industry's selling price and cost of sales. These dumped imports are not only undercutting domestic prices but also suppressing them. k. With the increase in imports from China, the profits of the domestic industry declined sharply during the period of investigation. The cash profit and PBIT sharply declined over the injury period. 1. Due to low priced imports from subject country, the return on capital employed of the domestic industry declined by 1/3rd over the injury period. m. With increase in imports, the domestic industry recorded negative growth in price parameters. n. The investigation has not shown any other factor which could have caused injury to the domestic industry. 0. None of the users have filed user questionnaire response. The impact of proposed ADD quantified by the domestic industry shows that imposition of anti-dumping duty on end consumers is insignificant. p. Imposition of duties would help MSME producers to arrest the decline in their performance and protect their legitimate interests. M. Recommendations 150. 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 positive information on the aspect of dumping, injury and causal link. Having initiated and conducted the investigation into dumping, injury and causal link in terms of the provisions laid down under the Anti- Dumping Rules, the Authority is of the view that imposition of duty is required to offset dumping and injury. Therefore, the Authority considers it necessary and recommends the imposition of anti-dumping duty on imports of the subject goods from the subject countries. 151. Having regard to the lesser duty rule followed by the Authority, the Authority recommends the imposition of an anti-dumping duty equal to the lesser margin of dumping and the margin of injury, so as to remove the injury to the domestic industry. Accordingly, the Authority recommends imposition of anti-dumping duty on the imports of the subject goods, originating in or exported from subject country for a period of 5 years from the date of notification to be issued in this regard by the Central Government, equal to the amount mentioned in Col. 7 of the duty table appended below. Duty Table +-----+-------------+----------------+-----------+---------------+---------------+-------+---------------------+----------+ | S. | Heading/ | Description | Country | Country of | Producer | Amount| Unit of | Currency | | No. | subheading | of the goods | of origin | export | | | measurement | | +=====+=============+================+===========+===============+---------------+=======+=====================+==========+ | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | +=====+=============+================+===========+===============+---------------+=======+=====================+==========+ | 1 | 32041711, | Azo pigment | China | Any | Ruian | 1387 | MT | USD | | | 32041719, | | PR | country, | Baoyuan | | | | | | 32041720, | | | including | Chemical | | | | | | 32041731, | | | China PR | Industry | | | | | | 32041739, | | | | Co. Ltd. | | | | | | 32041740, | | | | | | | | | | 32041759, | | | | | | | | | | 32041769, | | | | | | | | | | 32041790. | | | | | | | | +-----+-------------+----------------+-----------+---------------+---------------+-------+---------------------+----------+ | 2 | do | Azo pigment | China | Any | Zhejiang | 513 | MT | USD | | | | | PR | country, | Shengda | | | | | | | | | including | Charter | | | | | | | | | China PR | Win | | | | | | | | | | Chemical | | | | +-----+-------------+----------------+-----------+---------------+---------------+-------+---------------------+----------+ | 3 | do | Azo pigment | China | Any | Co. Ltd | 1811 | MT | USD | | | | | PR | country, | Any other | | | | | | | | | including | producer | | | | | | | | | China PR | other than | | | | | | | | | | mentioned | | | | | | | | | | in SN 1 and | | | | | | | | | | 2 | | | | +-----+-------------+----------------+-----------+---------------+---------------+-------+---------------------+----------+ | 4 | do | Azo pigment | Any | China PR | Any producer | 1811 | MT | USD | | | | | country | | | | | | | | | | other | | | | | | | | | | than | | | | | | | | | | China | | | | | | | | | | PR | | | | | | +-----+-------------+----------------+-----------+---------------+---------------+-------+---------------------+----------+ N. Further procedure 152. An appeal against the determination/review of the Designated Authority in this final finding shall lie before the Customs, Excise and Service Tax Appellate Tribunal in accordance with the relevant provisions of the Act.