The central government has imposed anti-dumping duties (ADD) on four more objects on the basis of recommendations of the designated authority (DA). The items targeted are compact fluorescent lamps (CFL), vitamin AB2D3K, thermal sensitive paper (TSP) and acrylonytrile butadiene rubber (NBR).
The action on TSP and CFL and vitamin are on the basis of preliminary findings of the DA. The action on NBR is a result of findings after a review of the action taken in 1999. In the case of TSP, the anti-dumping duty is levied on per kg basis whereas in the other cases, the minimum landed value is specified. In their cases, the difference between basic duty plus the assessable value of the goods imported and the landed value will be collected as ADD.
The notifications refer to DA's recommendations that are worded quite differently in each case. In the case of NBR, the notification says that that NBR originating in or exported from Japan has been exported to India below normal value resulting in dumping, that the domestic industry is suffering injury (not material injury) and that the injury may intensify if ADD is removed.
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In case of TSP, the notification says that TSP has been exported from China below its normal value (but does not say that it resulted in dumping), that the domestic industry has suffered material injury and is also being threatened with material injury and that the injury has been caused by dumped imports from China.
In case of vitamin AB2D3K, the notification says that the item originating from or exported from EU, Thailand and Singapore have been exported below normal value, resulting in dumping, that the domestic industry has suffered material injury and that injury has been caused by imports (not dumped imports but cumulatively) from the subject countries.
The most interesting reasons are given for CFL. First, imports from China and Hong Kong have increased quite significantly. Second, the sale of domestic industry has declined significantly. Third, the domestic sale prices are suffering from price suppression and price depression due to dumped imports. Fourth, the production has remained more or less static.
Fifth, closing stocks have gone up by 145 per cent. Sixth, capacity utilisation was as low as 20 per cent. Sixth, the domestic industry has suffered losses.
The notification does not refer to any finding that exporters from China or Hong Kong have exported CFL below the normal value, resulting in dumping.
There is no mention about "material injury" to the domestic industry. There is no mention of "causal link" between "dumping" and "material injury".
The case of a surge in imports would call for a "safeguard action" and not "anti-dumping action", especially in the absence of a categorical statement regarding "dumping". That would, however, need demonstration of "serious injury" to domestic industry. Such a duty will also apply across the board and bind the domestic industry to a credible "adjustment plan" to become competitive. Apparently, the domestic industry has no such plan and so, it is more convenient to levy ADD.
After the ADD, the landed value of CFL from China and Hong Kong would be $1.426 without choke and $3.115 with choke. After loading countervailing duties (CVD) and SAD, the costs would work out to about Rs 84 without choke and Rs 182 with choke. That should make the smugglers quite happy.