An AD or CVD investigation can be initiated either upon the receipt of an application requesting initiation of the investigation or suo moto by the DGTR based on the information received from the commissioner of customs or any other source that provides sufficient evidence of dumping or subsidisation, material injury and causal link. If the AD or CVD investigation is initiated based on an application, then the applicant must meet the criterion of ‘domestic industry’ as provided in the AD or CVD Rules, which state that an application should be expressly supported by domestic producers who account for at least 25 per cent of the total production of the ‘like article’ or by domestic producers whose collective output constitutes more than 50 per cent of the total production of the ‘like article’ produced by that segment of the domestic industry expressing either support or opposition to the application. Typically, a trade association representing the domestic industry files the application on behalf of the industry seeking the duty. The application must also contain information on whether any particular domestic producer is related to an exporter or importer of the allegedly dumped or subsidised article or is itself an importer, in which case such a producer may be excluded from the group of domestic producers seeking to qualify as the domestic industry.
The application must contain evidence of dumping or subsidisation, material injury or threat of material injury and causal link. The evidence with respect to dumping is in the form of price-related data pertaining to the normal value in the exporting country and prices of the product when imported into India.
With respect to a CVD investigation, the evidence of subsidisation could be in the form of laws or regulations in the exporting country providing tax benefits, duty rebates, preferential loans or grants to the producer or exporter. In AD investigations, the domestic industry is also required to provide a significant amount of costing data relating to the product in question, such as data on cost of production, raw material consumption, consumption of utilities and allocation of expenditure, etc. The evidence with respect to injury is in the form of data on capacity, production, sales, selling price, price undercutting, price underselling, profits and losses, capacity utilisation, exports and export sales realisation etc.
The domestic industry submits confidential as well as non-confidential versions of the application to the DGTR, which then ensures that sufficient copies of the latter are kept in the public file to be made available to authorised interested parties upon inspection of the public file. The Act does not specify a time limit within which the DGTR has to initiate the AD or CVD investigation. However, the DGTR cannot initiate an investigation unless it is satisfied with the accuracy and adequacy of the evidence submitted as part of the application. Additionally, in the case of a CVD investigation, the DGTR cannot initiate the case unless it has held consultations with the government of the exporting country.
As stated above, India has introduced to the AD Rules provisions governing the conduct of anti-circumvention investigations. An applicant for an anti-circumvention investigation must establish the circumvention of existing AD duties, which can be said to occur in any of the following cases:
- if an unfinished or unassembled product is imported to be completed or assembled in India or a third country and the value of the item after assembly is less than 35 per cent of the cost of the finished product;
- if an article in altered form (either in description, name or composition) is imported from the country of export or origin; or
- if producers or exporters subject to AD duty change their patterns or channels of trade without economic reason and so as to avoid the duty.
The applicant is also required to provide evidence that establishes that imports circumventing the duty are being dumped. As in the case of AD investigations, the DGTR conducts the investigation and recommends the duty to the Ministry of Finance, which may levy the duty retrospectively from the date of initiation of the investigation. An investigation pertaining to anti-circumvention may also be initiated suo moto by the DGTR.
Requirements in safeguard investigations
As in the case of an AD or CVD investigation, a general safeguard duty investigation and a QR investigation can be initiated either suo moto by the authority or upon receipt of an application requesting initiation of a safeguard investigation. If the investigations are initiated on the basis of an application, then the applicant must fulfil the eligibility criteria of a domestic industry. In this respect, unlike AD or CVD Rules, which expressly provide the percentage of support required for qualifying as the domestic industry, the Safeguard Duty Rules and the QR Rules only mention that the application should be filed by producers whose collective output of the like or directly competitive articles constitute a major share of the total production of the said article in India. In practice, the DGTR requires that the production of the applicant producers constitutes at least 50 per cent of the total production of the like or directly competitive article. The aforesaid interpretation of the DGTR, with respect to the standing of the domestic industry, is yet to be tested in QR investigations.
The domestic industry is required to provide prima facie evidence of increased imports, and serious injury or threat of serious injury in a general safeguard duty investigation and QR investigation. The causal link needs to be established in all cases. In all of the aforementioned investigations, the applicants are required to provide detailed import data (quantity and value) of the product under investigation for at least three years; factors attributable for increased imports and share of imports; and share of similar domestic products in the total domestic consumption or demand in India over a period of three years. The application must also provide the names and addresses of exporters or producers, importers, and any trade associations or user associations related to the product.
In general safeguard duty and QR investigations, the application must also provide a countrywide breakdown of the imports and their percentage of total imports and further provide an adjustment plan that details the efforts proposed to be taken by the domestic industry to make a positive adjustment to import competition.
Serious injury and threat thereof can be established by providing data on reduction in capacity or idling in capacity, sales volume, costs of production and impact of imports thereon, selling price, profits or losses, growing inventory and loss of employment. If the domestic industry has filed an application for AD or CVD duty or safeguard duty when petitioning for QRs, the same is required to be disclosed in the concerned application. Applicants are required to provide confidential and non-confidential versions of the application and access to the non-confidential version of the application is provided to all interested parties by placing it in the public file.
As in the case of AD or CVD investigations, the Safeguard Rules and the QR Rules also do not provide any time frame within which an investigation must be initiated. However, the concerned authority examines the accuracy and adequacy of the information provided in the petition and satisfies itself that there is sufficient evidence of increased imports, injury and causal link.
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