Govt initiates safeguard probe in SMOF imports
New Delhi: The Directorate General of Trade Remedies under the Commerce Ministry has initiated a safeguard investigation concerning imports of "Single Mode Optical Fibre" into India.
The investigation was initiated following complaint by Sterlite Technologies Limited (STL) and Birla Furukawa Fibre Optics Private Limited (BFL) alleging increased imports of "Single Mode Optical Fibre" (SMOF) causing serious injury and threat of serious injury to the domestic industry.
The applicants have requested for immediate imposition of provisional safeguard duty in view of significant surge in imports of the SMOF.
After examining the application filed by applicants, the Director General, prima facie, found that there has been a significant increase in imports of subject goods during 2018-19 and the most recent period, and such increase appears to be a result of unforeseen developments such as global oversupply, anti-dumping duty imposed by China against major optical fibre producing countries and other restrictions imposed on sale of China-made optical fibre, and that the volume and prices of these imports have caused and/or are threatening to cause significant injury to domestic industry.
After determining that there is sufficient evidence to justify initiation of safeguard investigation, the Director General initiated an investigation pursuant to rule 5 of the Safeguard rules, 1997 in order to determine whether as a result of unforeseen developments, the imports of the product under consideration constitute increased imports, and whether the increased imports have caused and/or are threatening to cause serious injury to the domestic industry of like and/or directly competing products.
The period of investigation (POI) considered for the purposes of present investigation is from 2016-17 to June 2019. The applicants have submitted that there has been a sudden, sharp and significant surge in imports in 2018-19, which has continued thereafter as well. The Authority has taken six months period (i.e. January 2019 - June 2019) as the most recent period.
The petitioners have claimed that there is a sudden, sharp and significant increase in imports in 2018-19 both in absolute terms as well as related to domestic industry production. It is noted that the imports in 2018-19 have more than tripled from 2016-17 and 2017-18 levels and have continued to be at increased levels during the most recent period, i.e. January to June 2019.
The petitioners have claimed that there is a confluence of a number of developments such as global over-capacity in fibre industry, imposition of anti-dumping duty by China against most of the optical fibre manufacturing countries, and other fiscal/non-fiscal restrictions imposed on sale/use of China-made Optical Fibre, which has resulted in sudden diversion of imports to India.
The applicants have claimed that the increased imports of the product has caused and is threatening to cause serious injury to the domestic producers. They have also claimed that their sales to independent customers has substantially gone down.