The Hindu Business Line : Industry irked by slow pace in dumping duty measures

THE domestic industry, swamped by cheaper imports and looking to the Directorate General of Anti-Dumping and Allied Duties (DGAD) for trade-defence remedy, today appears crest-fallen as the Designated Authority in the Commerce Ministry has not recommended even a single case of anti-dumping duty over the past five months of 2004, following frenetic activity in the past.

This is in sharp contrast to the overdrive by the Authority, which set off the most anti-dumping probes numbering 56 from July 1 to December 31, 2002, and 33 cases between July 1 and December 2003, as per the latest estimates by the Geneva-based world trade monitoring body World Trade Organisation (WTO).

Industry sources told Business Line here that though India earned the dubious distinction of imposing the largest number of final anti-dumping measures (32) during the second half of 2003, its total abstinence from putting in place new anti-dumping duty on industrial products appears strange. What is surprising to note, as per official sources, there are several cases pending even for initiation since October 2003.

These include sensitive products being churned out by small and medium enterprises (SMEs) from the country such as narrow woven fabric, colour picture tubes,

Chinese silk fabric, refrigerating compressors, nitrile rubber, Saccharine and gypsum plaster board, which need to be protected against cheaper imports from abroad.

Fresh petition closed by the DGAD without initiation include Iso Nonanol, acrylic fibre sunset review from Mexico, hydrofluoric acid, soda ash and ammonium nitrate.

Although officials are tight-lipped about the reasons for this unusual reticence on the part of the DGAD over the past few months, industry sources maintain that the authorities are perturbed because of the pressure exerted by the European Commission in February 2004 when a team from Brussels held consultations with mandarins in the Ministry of Commerce and Industry here with a request for consultations.

This request for consultation is a sort of cloak to take New Delhi to WTO as the EC detects flaws in the method of anti-dumping duty calculations by India in as many as 27 cases.

The list of 27 EU products suffering India's anti-dumping duty includes even such cases where anti-dumping duties were imposed five years ago and such cases where reviews have been conducted during that time.

When contacted sources in the EU here said that the Indian authorities assured the EU team that the Government of India is thinking of bringing in some amendments to the existing anti-dumping rules to reflect international standards and norms to reflect the concerns voiced by the EU.

They, however, flatly denied that any pressure was exerted by Brussels on this count.

Interestingly, the Designated Authority has notified three final findings in the past three months where it took the view that anti-dumping duty was not required to be imposed. In the case of ammonium nitrate, the Authority had recommended anti-dumping duty in the preliminary probe. Three hearings were held prior to the preliminary findings, after which the DA recommended imposition of anti-dumping duty.

"With no change in facts or ground position, the DA has held that there is no evidence of injury caused to the domestic industry by dumped imports," the industry sources quipped.

In the second case, preliminary findings recommended anti-dumping duty on ball bearings.

In the disclosure statement issued, the DA held that all ingredients were satisfied.

But in the final findings the DA held that the domestic industry has not suffered material injury. In the third case of calcium carbide, which was a sunset review case, the DA has observed that there was no justification for continuance of anti-dumping duty.

What is particularly disturbing is that Bangladesh approached with request for consultations with New Delhi, stating that it intends to file dispute in case of lead acid batteries.

Though no formal dispute has been filed by Dhaka in WTO, the Authority has initiated a mid-term review to examine whether the anti-dumping duty should be continued further.

It is also interesting that the request for review is based on a petition filed by an importer who has sought review, citing spurt in raw material prices.

At best increase in raw material prices meant increase in the quantum of anti-dumping duty and not reduction in anti-dumping duty or its discontinuation.

With domestic industry justifiably incensed over the deceleration in the pace of trade-defence measures permissible under the WTO rules, the DGAD should stick to its basic remit of safeguarding the interests of domestic industry in its unceasing fight against unfair competition from cheaper imports which threaten to inflict material injury to its very survival over the long haul, the sources said, adding that the new Government should get on with the work of amending the requisite Acts.