MINISTRY OF COMMERCE AND INDUSTRY
(Department of Commerce)
(DIRECTORATE GENERAL OF TRADE REMEDIES)
NOTIFICATION
FINAL FINDING
New Delhi, the 19th August, 2021

Case No. OI – 09/2020

Subject : Anti-dumping investigation concerning imports of “Polyester Yarn (Polyester Spun Yarn)” originating in or exported from China PR, Indonesia, Nepal and Vietnam.

A. BACKGROUND OF THE CASE

F. No. 6/10/2020-DGTR.—Having regard to the Customs Tariff Act, 1975, as amended from time to time (hereinafter also referred to as “the Act”) and theCustoms Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules 1995, as amended from time to time (hereinafter also referred to as “the Rules”) thereof.

1. Aabhas Spinners Private Limited, Arisudana Industries Limited, Jaanvi Spinners Private Limited, Krishna Ganga Spinning Mills Private Limited, Shree Nagani Silk Mills Private Limited, Suryalakshmi Cotton Mills Limited, Suryalata Spinning Mills Limited and Suryauday Spinning Mills Private Limited (hereinafter also referred to as the “Applicants”) filed an application before the Designated Authority (hereinafter referred to as “Authority”) requesting initiation of anti-dumping investigation on imports of “Polyester Yarn (Polyester Spun Yarn)” (hereinafter also referred to as “PSY” or “subject goods” or “product under consideration”) originating in or exported from China PR, Indonesia, Nepal and Vietnam (hereinafter also referred to as “subject countries”). The Applicants have claimed that dumping from the subject countries has caused material injury to the domestic industry.

2. The Authority, on the basis of prima facie evidence submitted by the Applicants, issued notification No. 6/10/2020-DGTR dated 21st May 2020, published in the Gazette of India, initiating the investigation in accordance with Section 9A of the Act read with Rule 5 of the Rules to determine existence, degree and effect of the alleged dumping of the subject goods, originating in or exported from China PR, Indonesia, Nepal and Vietnam, and to recommend the amount of anti-dumping duty, which if levied, would be adequate to remove the alleged injury to the domestic industry.

B. PROCEDURE

3. The procedure described hereinbelow has been followed with regards to the investigation:

i. The Authority notified the Embassies of China PR, Indonesia, Nepal and Vietnam in India about the receipt of the present anti-dumping application before proceeding to initiate the investigation with Sub-Rule (5) of Rule 5.

ii. The Authority issued a public notice dated 21st May 2020 published in the Gazette of India Extraordinary, initiating anti-dumping investigation concerning imports of the subject goods from China PR, Indonesia, Nepal and Vietnam.

iii. The Authority sent a copy of the initiation notification dated 21st May 2020 to the Embassies of China PR, Indonesia, Nepal and Vietnam in India, the known producers and exporters from these countries, known importers, importer/user Associations, the domestic industry as well as other domestic producers, and other interested parties as mentioned in the application, and requested them to make their views known in writing within the prescribed time limit, in accordance with Rules 6(2) and 6(4) of the Rules.

iv. The Authority provided a copy of the non-confidential version of the application to the known producers/exporters and to the Embassies of China PR, Indonesia, Nepal and Vietnam in India in accordance with Rule 6(3) of the Rules supra.

v. The Embassies of China PR, Indonesia, Nepal and Vietnam in India were also requested to advise the exporters/producers from their respective countries to respond to the questionnaire within the prescribed time limit. A copy of the letter and questionnaire sent to the known producers/exporters was also sent to them along with the details of the known producers/exporters from the subject countries.

vi. The Authority, upon requests made by the interested parties from time to time, granted extension of time up to 30th September 2020 to file their responses as well as submissions.

vii. The Authority sent questionnaires to the following known producers/exporters in China PR, Indonesia, Nepal and Vietnam in accordance with Rule 6(4) of the Anti-Dumping Rules :

1) China PR Link Industry, China PR

2) Jiaqi Trading Company Limited, China PR

3) Jinzhou City Wangtai Textile Colt, China PR

4) Shijiazhuang Dingwei Trading Company Limited, China PR

5) Tianjin Textile Group Import A, China PR

6) Xiamen Ming Textile Company, China PR

7) PT Delta Dunia Tekstil, Indonesia

8) PT Delta Merlin, Indonesia

9) PT Sinar Pantja Djaja, Indonesia

10) PT Sunson Textile Manufacturer, Indonesia

11) Dong Quang Spinning Corporation, Vietnam

viii. In response, the following exporters/producers have filed the exporter‘s questionnaire responses and submissions:

1) Fujian Changle Jinshagang Textile Corporation Limited, China PR

2) Fujian Jinlei Textile Company Limited, China PR

3) Fujian Xingjing Trading Company Limited, China PR

4) Jagdamba Spinning Mills (P) Limited, Nepal

5) Jinzhou Boao Textile Company Limited, China PR

6) Jinzhou Haoyu Textile Company Limited, China PR

7) Top Fibre Source Company Limited, China PR

8) Xianmen MC Group Corporation Limited, China PR

9) PT Adetex, Indonesia

10) PT Bitratex Industries, Indonesia

11) PT Dasar Rukun, Indonesia

12) PT Delta Dunia Sandang Tekstil, Indonesia

13) PT Delta Dunia Tekstil, Indonesia

14) PT Delta Merlin Sandang Tekstil, Indonesia

15) PT Dhanar Mas Concern, Indonesia

16) PT Elegant Textile Industry, Indonesia

17) PT Excellence Qualities Yarn, Indonesia

18) PT Indo Liberty Textiles, Indonesia

19) PT Indo-Rama Synthetics TBK, Indonesia

20) PT Primayudha Mandirjaya, Indonesia

21) PT Silver Kris, Indonesia

22) PT Sinar Pantja Djaja, Indonesia

23) PT Sunrise Bumi Textiles, Indonesia

24) PT Sunson Textile Manufacturer Tbk, Indonesia

25) PT Sri Rejeksi Isman, TBK, Indonesia

26) Reliance Spinning Mills Limited, Nepal

27) Triveni Spinning Mills Private Limited, Nepal

28) United Raw Material Pte Limited, Singapore

ix. Further, Directorate General of Foreign Trade, Government of Indonesia has also made submissions during the course of the investigation.

x. The Authority sent Importer‘s/ User Questionnaire to the following known importers/ users of subject goods in India seeking necessary information in accordance with Rule 6(4) of the Rules:

1) Bhartia Yarns Private Limited

2) Everflow Petroflis Limited

3) Fine Yarns

4) Kayavlon Impex Private Limited

5) Kennington Industries Private Limited

6) Nimish Syntex Private Limited

7) Ramdev Textiles

8) Richloom Exim

9) Strata Exim Private Limited

10) Suyog Synthetics

11) Tribeni Worldwide Private Limited

12) Vardhman Exim (Prop: Tilokchand.B.Bafna)

13) Viramdev Textiles

xi. In response, the following importers have filed importers‘ questionnaire response or legal submissions.

1) Bhartia Yarns Private Limited

2) Fine Yarns

3) Kennigton Industries Private Limited

4) Nimish Syntex Private Limited

xii. The Authority forwarded a copy of the Notification to the following known user associations of subject goods in India seeking necessary information, in accordance with Rule 6(4) of the Rules:

1) Northern India Textile Mills Association

2) The Clothing Manufacturers Association of India (CMAI)

3) The Textile Association (India)

xiii. Indonesia Textile Association has also filed legal submissions during the course of the investigation.

xiv. The period of investigation (POI) for the purpose of the present investigation is 1st January 2019 – 31st December 2019. The injury analysis period covers April 2016 – March 17, April 2017 – March 18, April 2018 – March 19 and the period of investigation.

xv. Transaction-wise imports data for the period of investigation and the preceding three years was obtained from the Directorate General of Commercial Intelligence and Statistics (DGCI&S). The Authority has relied upon data of DGCI&S for calculating the volume and value of imports of the subject goods in India.

xvi. Further, information was sought from the Applicants to the extent deemed necessary. Verification of the data provided by domestic industry was conducted to the extent considered necessary for the purpose of present investigation.

xvii. The Authority made available the non-confidential version of the submissions made by various interested parties for inspection by the interested parties. A list of all interested parties was uploaded on DGTR’s website along with the request therein to all of them to email the non-confidential version of their submissions to all other interested parties.

xviii. The non-injurious price (NIP) has been determined based on the optimum cost of production and cost to make & sell the subject goods in India as per information furnished by the domestic industry and in accordance with Generally Accepted Accounting Principles (GAAP) and Annexure III to the Rules. Such non-injurious price has been considered to ascertain whether anti-dumping duty lower than the dumping margin would be sufficient to remove injury to the domestic industry.

xix. In accordance with Rule 6(6) of the Rules, the Authority provided opportunity to the interested parties to present their views orally in a public hearing held on 25th February 2021 through video conferencing. The parties, which presented their views in the oral hearing, were requested to file written submissions of the views expressed orally, followed by rejoinder submissions.

xx. The submissions made by the interested parties, arguments raised and information provided by various interested parties during the course of investigation, to the extent supported with evidence and considered relevant to the present investigation, have been appropriately considered by the Authority in these final findings.

xxi. The Authority, during the course of investigation, satisfied itself, to the extent possible. as to the accuracy of the information supplied by the interested parties, which forms the basis of these final findings, and verified the data / documents submitted by them, to the extent possible and considered relevant.

xxii. The information provided by the interested parties on confidential basis was examined with regard to sufficiency of the confidentiality claims. On being satisfied, the Authority has accepted the confidentiality claims, wherever warranted and such information has been considered as confidential and not disclosed to other interested parties. Wherever possible, parties providing information on confidential basis were directed to provide sufficient non-confidential version of the information filed on confidential basis.

xxiii. Wherever an interested party has refused access to or has otherwise not provided necessary information during the course of investigation, or has significantly impeded the investigation, the Authority considered such interested parties as non-cooperative and recorded this final findings on the basis of the facts available.

xxiv. In accordance with Rule 16 of the Rules, the essential facts of the investigation were disclosed to the known interested parties vide disclosure statement dated 12th August, 2021 and comments received thereon, considered relevant by the Authority, have been addressed in these final findings. The Authority notes that most of the post disclosure submissions made by the interested parties are mere reiteration of their earlier submissions. However, the post disclosure submissions to the extent considered relevant are being examined in these final findings.

xxv. *** in these final findings represents information furnished by an interested party on confidential basis, and so considered by the Authority under the Rules.

xxvi. The exchange rate adopted by the Authority for the subject investigation is US$1= 71.34

C. SCOPE OF PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE

4. At the stage of initiation, the product under consideration was defined as follows:

3. The product under consideration (PUC) is single yarn of polyester containing 97% or more by weight of polyester staple fibres, commonly referred to as Polyester Spun Yarn‟. In market parlance, the product is also known as Spun Yarn, Spun Poly. The Applicants have requested for exclusion of the following from the scope of the PUC:

i. Dyed polyester yarn, melange polyester yarn or coloured polyester yarn; and

ii. Yarns coarser than 8s counts or finer that 45s counts.

4. The subject goods are used for knitting and weaving to make fabrics for garments and home furnishing.

5. The subject goods are classified under the tariff custom classification 5509 2100. The customs classifications is indicative only and is not binding on the scope of present investigation.”

C.1 Submissions of the domestic industry

5. The following submissions have been made by the domestic industry with regards to the scope of product under consideration and like article.

i. The product under consideration is single yarn of polyester containing 97% or more by weight of polyester staple fibres, excluding dyed yarn and yarns coarser than 8s counts or finer than 45s counts.

ii. The PCN for the product under consideration should be based on count of the product and whether the raw material used is virgin or recycled.

C.2 Submissions by other interested parties

6. With regard to PCN methodology, other interested parties have submitted that the product under consideration can be manufactured using a combination of virgin PSF (Polyester Staple Fibre), recycled fibre and PSF made from PET (Polyethylene Terephthalate) bottles. The cost of production and selling price differ with different combination of raw material used, and accordingly, the applicants should have submitted PCN wise information regarding various parameters. However, no submissions were made on the scope of the product under consideration.

C.3 Examination by the Authority

7. The Authority has considered the product under consideration as single yarn of polyester containing 97% or more by weight of polyester staple fibres, commonly referred to as ‘Polyester Spun Yarn’. In market parlance, the product is also known as Spun Yarn and Spun Poly. The following are excluded from the scope of product under consideration

a. Dyed polyester yarn, mélange polyester yarn or colored polyester yarn

b. Yarns coarser than 8s counts or finer than 45s count

8. The product under consideration is classified under the tariff entry 5509 2100. The customs classification is only indicative and is not binding on the scope of the product under consideration.

9. The Authority proposed the following PCNs in the notification of initiation:

PCN Methodology
Characteristics Format Explanation
Count XX Count of the product may range from 8 to 45
Raw material used X The nature of raw material used:

R: Recycled

V: virgin

10. After considering all the comments received from interested parties, the Authority has considered the following PCN methodology for the purpose of the present investigation:

Characteristics/ Parameters PCN Code
Production technology i. Ring

ii. Open-end

iii. Jet

i. R

ii. O

iii. J

Fibre Type i. Grey virgin polyester fibre

ii. Grey recycled polyester fibre

iv. Grey flame retarded polyester staple fibre

v. Grey cationic polyester staple fibre

iii. Other grey speciality polyester staple fibre

i. V

vi. R

vii. F

viii. T

ix. O

Count Each individual count is a separate PCN XXX
Special Features i. Normal yarn

x. Slub

xi. High twist

xii. Any other

i. NY

xiii. SL

xiv. HT

xv. AN

11. The Authority notes that the domestic industry has claimed that it has produced like article to the imported goods and the interested parties have also not claimed any difference in the goods produced by the domestic industry and the imported product. The Authority notes that the subject goods produced by the domestic industry and that imported from subject countries 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. The consumers are using the two interchangeably. In view of the same, the Authority holds that the subject goods produced by the domestic industry are like article to the product under consideration imported from subject countries.

D. DOMESTIC INDUSTRY AND STANDING

D.1 Submissions of other interested parties

12. The following submissions have been made by other interested parties regarding the scope of domestic industry and standing:

i. Applicants have not shown the basis for computation of total Indian production for the purpose of this application. In investigations related to raw silk and silk fabrics, the Authority had collected information from Central Silk Board, which filed the application on behalf of the farmers and also from individual farmers who were in thousands. No government agency has provided data in the present investigation.

ii. Without the data for total production, the exporters are unable to comment on the domestic industry standing.

iii. The Ministry of Textiles has provided data regarding total production of subject goods in India along with the names of all 239 producers. While there are 239 producers, the application has been filed by only 8 producers, which do not meet the standing requirement. A list of only 50 producers has been given by the applicants.

iv. If the Authority would have requested information from Textile Commissioner or made efforts to obtain information from other producers, they would have concluded that the applicants have production lower than 25% and would not have initiated the investigation.

v. There are more than 10 associations of synthetic yarns in India, which will have production data of all the producers. The Authority should collect data from such associations.

vi. The production cannot be determined on the basis of information obtained from raw material suppliers because:

a. The suppliers also supply to producers which manufacture other products and they do not track the quantity used in the product under consideration.

b. The producers of the subject goods also import raw material.

c. Sharing of information between raw material suppliers and producers will come under anti-competitive and trade restrictive practices.

d. Considering that some of the producers opposed the anti-dumping investigation on PSF, it is doubtful that the PSF producers are sharing such information.

vii. During the oral hearing the counsel for domestic industry admitted that even 24.99% share would not constitute major proportion.

viii. As per the provision under the US and European Union law, domestic industry should constitute 25% of production in the country.

ix. In EC – Fasteners, it was held that the Authority has to ensure the proportion used substantially reflects the total production of producers as a whole.

x. As per Article 5.4 and explanation to Rule 5(3), applicants shall be considered as domestic industry only if their production is more than 50% of the total production.

xi. If the production data provided by Ministry of Textiles is considered, it would be seen that the applicants account for only 10-15% of the total domestic production.

xii. The applicants have pleaded for sympathy with regard to standing. In Forech India Limited V. Designated Authority, it was held that special concession or sympathy for any party could lend to suspicion of bias.

xiii. All applicants, and particularly Suryalata Spinning Mills Limited and Suryalakshmi Cotton Mills Limited, are listed and have investments exceeding Rs. 20 crores and turnover Rs. 100 crores and are not MSMEs.

xiv. The information sought regarding standing and major proportion has not been provided. Issues related to jurisdiction should be settled prior to oral hearing, as held in Automotive Tyre Manufacturers Association vs. Designated Authority.

xv. The supporters of the application have imported the subject goods and cannot be considered domestic industry.

xvi. Supporters should not be considered in the present investigation, as they have not filed the information prescribed under Trade Notice 13/2018 and 14/2018. In past cases the Authority has rejected support letters as they were not as per the Trade Notice.

xvii. Trade Notices are binding on the authorities, as held in Steel Authority of India vs. Collector of Customs, Bombay. If any special concession has been made to the supporters, with regards to the Trade Notice, the same should be communicated to the interested parties.

xviii. The Authority has not asked other producers to express support or dissent.

xix. If the other producers are contributing to dumping by importing, it is not clear as to why they did not come forward to object to the imposition of duty.

xx. In EC – Salmon (Norway), the Panel noted the Authority incorrectly defined the domestic industry by excluding the producers that did not express an opinion regarding the investigation.

D.2 Submissions of the domestic industry

13. The following submissions have been made by the Applicants with regard to the domestic industry and standing:

i. The application was filed by 8 domestic producers, and was supported by 7 domestic producers of the subject goods. During the course of the investigation, 23 more producers have expressed support for imposition of duties.

ii. None of the applicants have imported the subject goods or are related to importers or exporters thereof.

iii. The industry in the present case is fragmented, consisting of numerous small producers belonging to MSME sector, due to which compilation of data is difficult. There are more than 50 producers. While a few large producers have a share of 6-9% in domestic production, the share of others is below 3%.

iv. The producers are not dedicated to production of product under consideration. The spindles can be used for production of other types of yarn as well.

v. It took the industry more than 6 months to compile data even for a limited number of producers due to the small size of the producers. Five out of the 8 applicants belong to MSME sector.

vi. As against the claims of other interested parties, MSME includes enterprises with investment in plant and machinery of upto Rs. 50 crores and turnover upto Rs. 250 crores. The MSME certificates of the applicant producers have been provided to the Authority.

vii. No market or government agency records the gross domestic production of product under consideration in India. Accordingly, best available information has been used. The total domestic production has been determined based on market estimates after consultation with raw material suppliers.

viii. The data relating to total production was provided in the application. While the interested parties have raised allegations that the information provided is not accurate, no evidence has been provided refuting the same.

ix. While the interested parties have claimed that information with regard to domestic production and source thereof was not made available, the names of producers of the raw material, that is, PSF have been enclosed in the application. The information obtained by such producers in form of estimated production of subject goods in India has also been shared.

x. With regard to the claim that producers of PSF are not in a position to estimate production of product under consideration in India, it was submitted that each producer of the product knows the profile of the customers and the tentative consumption of the customer sector. They are also aware of the quantum of demand being supplied by imports in the country.

xi. Contrary to the allegations in this regard, sharing estimates of production of PSY based on consumption of PSF cannot be considered anti-competitive. The argument of other interested parties that the domestic industry opposed the imposition of duties on PSF is irrelevant in the present case. The raw material suppliers and domestic industry maintain a healthy business relationship, and accordingly the producers of PSF cooperated with the producers of subject goods.

xii. The Authority was not required to call for information from Textile Commissioner prior to initiation of the investigation, in the same way as it does not call for information with regard to dumping prior to initiation.

xiii. The other interested parties have exaggerated the domestic production by relying on data for all kinds of Polyester Spun Yarn. The reliance on list of producers of PSY and their production is unwarranted, as it relates to PSY as a whole and not merely product under consideration.

xiv. PSY as a whole consists of 36 products which includes dyed, melange, two-ply, multi-ply, counts coarser than 8s Ne and finer than 45s Ne. Out of the 36 products the product under consideration is only one.

xv. Each producer of PSY submits its production to Ministry of Textiles. However, such information relates to PSY as a whole and not segregated for product under consideration.

xvi. The Northern India Textile Mills‘ Association, The Southern India Mills‘ Association and the Indian Spinners Association have supported the imposition of the duty. They have also stated that a significant proportion of the production of their members is of products beyond the scope of product under consideration.

xvii. The domestic industry has made available evidence in the form of letters from Northern India Textile Mills‘ Association, and 12 other producers of PSY, which state that their production of other products, excluded from scope of product under consideration, is 201.41 million kg. Therefore, out of the total production of PSY as reported by the Office of Textiles Commissioner is considered, at least 201.41 million kg is of other products and the production of product under consideration is 206.87 million kg at best.

xviii. As per Article 5.2, the applicants are only required to provide information reasonably available to it with regard to domestic production. In past investigations as well, the information made available by the applicants has been accepted where it was the information reasonably available to such applicants. Given that the industry is fragmented, and that there was lack of accessibility of information to the applicants, there was no possibility of more accurate information that was publicly available. The domestic industry has relied upon the findings in the case of SDH equipment, silk fabrics and castings in this regard.

xix. The applicants account for a major proportion of the domestic production and thereby constitute domestic industry.

xx. The requirement of 25% is only for express support and not for the constitution of domestic industry.

xxi. Even assuming the figure of 408.27 million kg relates to production of product under consideration, the express support to the application exceeds 25% of the total domestic production.

xxii. In EC – Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China PR, the Appellate Body noted that, in case of fragmented industry, major proportion might be lower as there are practical difficulties in collecting data in such a case. Therefore, a share lower than 25% can be considered as major proportion.

xxiii. In investigations related to Silk Fabrics and Mulberry Raw Silk from China PR, as the industry was fragmented, the application was filed by Central Silk Board and the Authority found that application satisfies the requirement of Rule 5(3). In the present case as well, the industry is fragmented and the requirements of domestic industry and standing should be construed accordingly.

xxiv. The provisions relied upon by other interested parties for European Union and USA, also refer to requirement of express support by producers accounting for 25% of the total domestic production, and not constitution of domestic industry.

xxv. Contrary to claims of interested parties, the domestic industry has not asked for any special concessions with regard to constitution of domestic industry, but has requested for determination consistent with law.

xxvi. In any case, the applicants account for more than 25% of the total domestic production, thereby constituting domestic industry.

xxvii. Even if the higher figure of 206.87 million kg (408.27 million kg less 201.41 million kg of production of other products as per letters provided by other producers) is considered, the applicants constitute domestic industry.

xxviii. In Lubrizol India Private Limited V. Designated Authority, the Tribunal held that major proportion must not be considered as a mathematical exercise but should relate to a share that is significant or important. Considering the fragmented nature of the industry, a share of 29% is undoubtedly important and significant.

xxix. In the present case, express support exceeds 25% of total domestic production.

xxx. Since none of the producers have expressed opposition, the requirements of Rule 5(3) are satisfied as domestic producers expressing support constitute 100% production of the portion of the producers expressing either support for or opposition to the application.

xxxi) The Authority has considered support in a number of cases where supporters did not file the information in formats as per the Trade Notice.

xxxii) The Authority should consider that the present supporters are extremely small entities belonging to MSME sector and are not in a position to compile detailed information as per the Trade Notice.

xxxiii) The question of polling in case of fragmented industries to determine support or opposition arises only when the application does not meet 50% condition.

xxxiv) Contrary to claims of interested parties, the supporters who have imported the goods have not sought to be considered as domestic industry.

xxxv) Contrary to allegations of interested parties, the issue of jurisdiction in terms of major proportion and standing was settled at the time of initiation.

D.3 Examination by the Authority

14. Rule 2(b) of the 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 construed as referring to the rest of the producers”

15. The application in the present case has been filed by the following 8 domestic producers of the subject goods in India

a. Aabhas Spinners Private Limited,

b. Arisudana Industries Limited,

c. Jaanvi Spinners Private Limited,

d. Krishna Ganaga Spinning Mills Private Limited,

e. Shree Nagani Silk Mills Private Limited,

f. Suryalakshmi Cotton Mills Limited,

g. Suryalata Spinning Mills Limited and

h. Suryauday Spinning Mills Private Limited.

16. The application was supported by the following producers of the subject goods.

a. Ankur Udyog Limited

b. Devshree Cotsyn Private Limited

c. Longowalia Yarns Limited

d. Shri Muniveer Spinning Mills

e. Rishikesh Spinning Private Limited

f. RSWM Limited

g. Subhash Polytex Ltd.

17. During the course of the investigation, the following producers have further supported the application.

a. Aarti International Limited

b. Deepak Spinners Limited

c. Garg Acrylics Limited

d. Gimatex Industries Private Limited

e. Himachal Fibres Limited

f. Kashi Vishwanath Textile Mills (P) Limited

g. Kaur Sain Spinners Limited

h. Kumaragiri Spinners Private Limited

i. Nahar Spinning Mills Limited

j. Oswal Woollen Mills Limited

k. Pee Vee Textiles Limited

l. Shiva Speciality yarns Limited

m. Shiva Spin-n-knit Limited

n. Shiva Texfabs Limited

o. Shiwalya Spinning and Weaving Mills (P) Limited

p. Sportking India Limited

q. Star Cotspin Limited

r. Suryajyoti Spinning Mills Limited

s. Suryavanshi Spinning Mills Limited

t. VST Spintex India Limited

u. Yogindera Worsted Limited

18. The applicants submitted that there is no publicly available information with regard to total domestic production of the product under consideration. Accordingly, they had provided information with regard to domestic production, based on consultations with the suppliers of the raw material, that is, PSF. Based on the estimates of such suppliers of raw material, the applicants claimed that they constitute a major proportion of the total domestic production, and the application satisfies the requirements of Rule 5(3), as given in the table below. Further, the applicants claimed that some of the producers of the subject goods had imported the product themselves, and therefore, should be considered ineligible to constitute domestic industry. If the production of such producers is excluded, the share of applicants in total production would be still higher .

Particulars Total Excluding production of producers
who have imported PUC
Volume (MT) Share (%) Volume (MT) Share (%)
Total production 202,111 100% 181,406 100%
Applicants 58,361 29% 58,361 32%
Supporters 57,291 28% 44,682 25%
Others 86,547 43% 78,452 43%

*As per post initiation information (data for updated POI) filed by the applicants

19. However, other interested parties claimed that the production claimed by the applicants was understated. The opposing interested parties further claimed that the Office of Textiles Commissioner maintained records with regard to production of product under consideration, and can supply the same. Further, they provided a copy of the list of producers provided by the Ministry of Textiles, and estimated production of PSY at 408.27 million kg, given to them by the office of Textiles Commissioner. Since the production mentioned in the letter provided by the other interested parties pertained to PSY as a whole, and not product under consideration (which actually is PSY minus excluded products), the Designated Authority wrote to the Office of Textiles Commissioner, requesting them to provide information with regard to product under consideration only.

20. In response to the request from the Authority, the Office of Textiles Commissioner informed that the production of polyester spun yarn in India was 408.27 million kg. However, they clarified that they do not have separate data of production of the excluded products. Accordingly, the Authority asked the applicants to substantiate their claims with regard to total domestic production of the subject goods and the production of excluded products.

21. The applicants filed detailed submissions, vide letter dated 5th April 2021, establishing their claim that they constitute major proportion. The non-confidential version of the letter was also circulated to all the other interested parties. The applicants submitted that other than product under consideration, the following products also (hereinafter referred to as NPUC PSY) fall within the scope of PSY.

a. Yarns for sewing

b. Dyed or melange yarns

c. Two-ply yarn

d. Multi-ply yarn

e. Yarns coarser than 8s counts

f. Yarns finer than 45s counts

22. Further, the applicants filed information in the form of letters from Northern India Textile Mills‘ Association (NITMA) regarding production of sewing yarns, and from the following producers with regards to their production of NPUC PSY.

a. Shiva Fibres Private Limited (producer of sewing yarns)

b. Deepak Spinners Limited

c. Kashi Vishwanath Textile Mill (P) Limited

d. Longowalia Yarns Limited

e. Maharaja Cotspin Limited

f. Orient Syntex

g. RSWM Limited

h. Sangam (India) Limited

i. Shiva Texfabs Limited

j. Shiva Speciality Yarns Limited

k. Suryaamba Spinning Mills Limited

l. Shree Nagani Silk Mills Private Limited (with regard to its related entities)

23. The information furnished by other producers regarding production detail of NPUC PSY is summarised herein below.

Particulars Volume (million kg) Volume
(million kg)
Total production of PSY 408.27
Production of sewing yarns confirmed by NITMA 77.2
Production of NPUC PSY (other than sewing yarn) by other producers 107.36
Deepak Spinners Limited ***
Kashi Vishwanath Textile Mill (P) Limited ***
Longowalia Yarns Limited ***
Maharaja Cotspin Limited ***
Orient Syntex ***
RSWM Limited ***
Sangam (India) Limited ***
Shiva Texfabs Limited ***
Shiva Speciality Yarns Limited ***
Suryaamba Spinning Mills Limited ***
Related entities of Shree Nagani Silk Mills ***
Balance domestic production 223.71
Production of producers importing the product 17.60
Eligible domestic production 206.10

24. The applicants have submitted that since only some of the producers of NPUC PSY have shared their production, the information provided did not constitute total production of NPUC PSY and that the actual production of NPUC PSY was in fact higher and therefore, the maximum domestic production of product under consideration can be 223.71 million kg. Moreover, vide letters dated 30th April 2021 and 13th May 2021, the following producers have furnished injury information details in the Format H. The non-confidential versions of these letters were circulated to all other interested parties.

a. RSWM Limited

b. Longowalia Yarns Limited

c. Marudhar Spinning Mills Private Limited

d. Suryaamba Spinning Mills Private Limited

25. The Authority has considered the information provided by the applicants, and notes that in view of above the production of product under consideration cannot be considered as exceeding 223.71 million kg. Accordingly, the share held by the applicants, supporters and other producers in the total domestic production of PUC (with and without excluding producers importing PUC) is as given in the table below:

Particulars Total Excluding production of those
producers who have imported PUC
Volume
(million kg)
Share (%) Volume (million
kg)
Share (%)
Total production 223.71 100% 206.11 100%
Applicants 58.36 26% 58.36 28%
Supporters (providing Format H) 27.87 13% 14.93 7%
Other supporters 43.21 19% 41.30 20%
Total supporters 71.08 32% 56.22 27%
Applicants + supporters 129.44 58% 114.58 55%
Other producers 94.27 42% 91.53 45%

26. In view of the foregoing, the Authority holds that the applicants account for a major proportion of the domestic production, and thereby constitute domestic industry in terms of Rule 2(b) of the Rules and that the application satisfies the requirements of standing in terms of Rule 5(3) of the Anti-Dumping Rules.

E. CONFIDENTIALITY

E.1 Submission of the domestic industry

27. The following submissions have been made by the domestic industry regarding confidentiality.

i. The exporters have claimed excessive confidentiality even in respect of information in the public domain such as list of products produced, and their capacities has been claimed confidential.

ii. The producers/exporters have not submitted confidentiality reasoning as per prescribed format provided under Trade Notice 1/2013 dated 9th December 2013.

iii. The foreign producers/exporters have not complied with the requirements of Trade Notice 10/2018. Information with regard to related parties involved in production and sales of product under consideration, broad stage-wise manufacturing process, trends of sales value, price and other parameters have not been shared. Further, no reason has been provided for claiming such confidentiality.

iv. As regards the claim that the domestic industry did not disclose information in accordance with Trade Notice 10/2018, it is submitted that the notice clearly specifies that it seek to lay down guidelines from which deviation may be allowed by the Authority. The domestic industry has justified its reasons for deviation from the trade notice.

v. The disclosure of actual sales value, profit and expenses would be significantly prejudicial to the competitive interest of the domestic industry. Disclosure of cost and selling price would allow the customers of the domestic industry to know the profits earned by it. Customers will be able to know whether they are paying higher or lower than other customers and may demand price adjustment. Other domestic producers will also get to know the performance of the domestic industry and may redraw their marketing and pricing strategy.

vi. The Authority has also treated figures relating to cost, selling price, profits, cash profits and return on capital employed confidential in past cases, where there were number of producers.

vii. Information in Section VI contains business proprietary information of the domestic industry, which cannot be disclosed to other parties.

viii. Injury is required to be examined for the domestic industry as a whole, and not for individual producers. No prejudice is caused by non-disclosure of individual performance parameters.

ix. The non-injurious price is based on confidential data of the domestic industry. Disclosure of the same would be extremely prejudicial to the business interests of the applicants. The domestic industry has disclosed injury margin as a range.

x. The financial statements submitted to the Authority are confidential as they are more detailed statements than those available on the MCA portal.

xi. While the other interested parties have claimed that the domestic industry should disclosed financial statements in accordance with Trade Notice 1/2013, they have themselves have claimed their financial statements confidential.

xii. Contrary to claims of the interested parties, normal value along with the supporting evidence has been disclosed in the non-confidential version of the application.

xiii. The applicants have provided trade map data for determination of the normal value and a copy of the same has been provided in the non-confidential version of the application.

xiv. The import data has been provided in PDF format as per Trade Notice. CESTAT order was issued at the time when Authority did not allow the interested parties to procure DGCI&S data, but now the practice has changed.

E.2 Submissions of other interested parties

28. The following submissions have been made by the other interested parties with regard to confidentiality:

i. Justification table indicating reasons for confidentiality claimed by the domestic industry is not as per the requirement under the Trade Notice.

ii. Annual reports of all applicants have been claimed confidential, despite the annual reports for Suryalakshmi Cotton Mills Limited and Suryalata Spinning Mills Limited being available on its website and for other applicants on the MCA portal.

iii. Trade Notice 01/2013 mandates the applicants to provide annual reports and balance sheets.

iv. In Sterlite Industries (India) Limited vs. Designated Authority, the court held that confidentiality is not to be granted automatically but should be based on scrutiny.

v. Non-confidential version of annual reports of supporters, costing information, raw material consumption, allocation and apportionment of expenses, sales of product under consideration and other products, funds raised, stock, employment, investment, price trends and imported material prices have not been provided.

vi. Individual performance parameters of the applicants have not been shared.

vii. The applicants have not followed Trade Notice 10/2018 in terms of sharing information pertaining to sales value, PBIT per unit, total profit before interest and tax, interest/finance cost, depreciation and amortisation expenses, non-injurious price and funds raised. In anti­dumping investigation into imports of Zinc coated flat products, the Authority held that the claim of confidentiality can be accepted only when information is submitted as per Trade Notice 10/2018.

viii. The applicants have not furnished data regarding non-injurious price in the non-confidential version and have admitted that they were not able to calculate it correctly.

ix. The information with regard to determination of normal value has been redacted and not shared with the exporters.

x. The applicant has provided unsubstantiated sales data for Indonesia on confidential basis.

xi. The domestic industry has not provided DGCI&S transaction-wise information to the exporters. Data in PDF format cannot be analysed.

xii. Contrary to the claim of the domestic industry, the Indonesian exporters have followed the requisite rules on confidentiality.

E.3 Examination by the Authority

29. The Authority made available non-confidential version of the information provided by various interested parties to all other interested parties for inspection as per Rule 6(7) of the Rules.

30. With regard to confidentiality of information, Rule 7 of the Rules provide as follows:

“Confidential information: (1) Notwithstanding anything contained in sub-rules (2), (3) and (7)of rule 6, sub-rule(2) of rule12,sub-rule(4) of rule 15 and sub-rule (4) of rule 17, the copies of applications received under sub-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 authorise its disclosure in a generalized or summary form, it may disregard such information.”

31. Information provided by the interested parties on confidential basis was examined with regard to sufficiency of the confidentiality claim. On being satisfied, the Authority has accepted the confidentiality claims, wherever warranted and such information has been considered confidential and not disclosed to other interested parties. Wherever possible, parties providing information on confidential basis were directed to provide sufficient non confidential version of the information filed on confidential basis. The Authority made available the non-confidential version of the evidence submitted by various interested parties by directing the interested parties to share the non-confidential version of submissions with each other through e-mails. Business sensitive information has been kept confidential as per practice. The Authority notes that any information which is available in the public domain cannot be treated as confidential.

32. With regards to DGCI&S data, the Authority notes that the data has been shared with interested parties relating to volume and value of imports from exporting countries into India. Further, the applicant has provided a complete list of transaction wise import data. It is also noted that any interested party can obtain data independently from the DGCI&S and lodge its own counter claim based on the data so received. The Authority holds that procedure for sharing and procuring import data has been laid down in the Trade Notice 07/2018 dated 15th March 2018. It provides that (i) the sorted import data relied upon by the domestic industry can be shared in hard copy and (ii) interested parties can seek authorization from the Authority for seeking raw transaction by transaction import data from DGCI&S. Sorted import data was made accessible to the interested parties based upon declaration/undertaking as per prescribed format. The interested parties who requested for procurement of import data from DGCI&S and provided undertaking as per Trade Notice 07/2018 were also granted authorization to obtain import data in excel file from DGCI&S. The Authority thus notes that the procedure now being applied is consistent, uniform across parties and investigations and provides adequate opportunity to the interested parties to defend their interests.

33. The Authority has considered the claims of confidentiality made by the Applicants and the opposing interested parties and on being satisfied about the same, the Authority has allowed the claim on confidentiality.

F. MISCELLANEOUS ISSUES

F.1 Submissions of other interested parties

34. The following submissions have been made by the other interested parties:

i. The applicants did not complete all sections of the application proforma, and thus, an investigation cannot be initiated in the absence of sufficient evidence with regard to dumping, injury and causal link, as held by Panel in Guatemala – Mexico Cement (case-II). The investigation has been initiated based on surmises and conjectures of the Applicants without satisfying the requirements of Rule 5.

ii. DGTR has initiated the investigation based on prima facie evidence of dumping, injury and causal link, whereas sufficient evidence is required for the same under Anti-Dumping Agreement. This is also consistent with the findings of the WTO dispute resolution body in US – Softwood Lumber from Canada, Guatemala – Cement II and Mexico – Steel Pipes and Tubes.

iii. The domestic industry is submitting new evidence at the very fag end of the investigation, which should be outrightly rejected.

iv. In the past, the Authority has rejected exporters‘ responses if they were found unreliable. The same approach should be followed in the present case with regard to the domestic industry, as it has provided unreliable information.

v. The applicant has not provided a revised application in respect of the period of investigation considered by the Authority at initiation.

vi. Since the period of dumping and period of injury examination are not the same, any analysis based thereupon would not satisfy the requirements of the Anti-Dumping Agreement.

vii. The determination of prima facie dumping and injury is based on proposed period of investigation, and not on the period considered by the Authority.

viii. The data for 2018-19 submitted in the revised application is different from that submitted in the original application. Figures for production of applicants, supporters, other producers and total Indian production have changed.

ix. Imposition of anti-dumping duty will be contrary to the Governments policy as enumerated in Budget 2021-22. For advancement of MSME sector, Ministry of Finance has reduced the customs duty on textiles. Any imposition of anti-dumping duty will be inconsistent with the long-term and overall interests of the Indian industry.

x. If anti-dumping duty is levied, the applicants will be able to increase prices in order to earn monopoly profits. This would impact the user industry, which has invested thousands of crores in modernizing, and would affect the viability of fabrics produced by small handlooms in the international market. This would also have an adverse impact on Prime Minister‘s Make in India scheme.

xi. Domestic industry has a dominant position in the market and cannot suffer injury due to imports.

xii. The users will suffer as certain variety of yarns not made in India are also covered under the investigation.

xiii. The fabric manufacturing units of the Applicant is under stress which is evident from the fact that the captive consumption for Suryalakshmi Cotton Mills has reduced to zero. Losses and injury are on account of fabric products.

xiv. The user industry, comprising of MSMEs and SMEs, is already facing various issues including slow-down of economy, sluggish demand of end product, high capital cost, and imposition of anti-dumping duty will lead to price rise, uncompetitive and inferior quality end product.

F.2 Submissions of the domestic industry

The following submissions have been made by the domestic industry:

i. The domestic industry has filed a complete application with information on dumping, injury and causal link and the same has been examined by the Authority at the time of initiation.

ii. While the interested parties have claimed that all sections of application proforma were not completed, they have failed to identify what information has not been provided.

iii. The domestic industry has filed a non-confidential version of the application filed before initiation. Rule 6 does not provide for filing of a fresh application, post initiation of investigation. Updated data for the period of investigation was filed in accordance with the period of investigation as considered by the Authority.

iv. Contrary to claims of the interested parties, only prima facie satisfaction regarding dumping, injury and causal link is required at the stage of initiation, as was held by the Rajasthan High Court in Rajasthan Textile Mills Association V. Dir. General of Anti-Dumping, Huawei Technologies Company Limited V. Designated Authority and Automotive Tyre Manufacturer‘s Association V. Designated Authority.

v. Regarding the submission that the determination of prima facie dumping and injury before initiation was not based on the period of investigation considered by the Authority, it was submitted that the Authority regularly modifies period of investigation at the stage of initiation. The same is followed in other jurisdictions like USA and European Union.

vi. Contrary to submissions of the interested parties, the injury analysis period includes the dumping analysis period and there is an overlap between the two.

vii. Regarding claims of inconsistencies in data, it is submitted that the Authority has duly verified the data of the domestic industry.

viii. As there are a number of producers in India who manufacture as well as have capacity to manufacture the subject goods, imposition of duty will not lead to monopoly in the market. The contention that the price would increase is self-serving as it is raised by the importers and not the users.

ix. Contrary to the claims of the interested parties, the domestic industry is not in a dominant position. Rather, the imports are adversely affecting the prices of the domestic industry.

x. There are three major importers accounting for 66% imports from China PR, Indonesia and Vietnam, namely, Kennington Industries Private Limited, Mr. Arun Bhartia and Viramdev Textiles. These do not add any value to the economy nor generate employment. The domestic producers should not be allowed to suffer for the benefits of a few importers.

xi. Protection of domestic industry from unfair trade will be consistent with the objectives of the budget 2021 as the domestic industry belongs to the MSME sector.

xii. While the interested parties have claimed that they would suffer as certain varieties of yarn are not produced in India, they have not identified such varieties.

xiii. Downstream industry suffering on other grounds cannot be a factor to deny protection to the domestic industry against dumped imports. Domestic industry, being part of MSME sector, suffers the same disadvantages as the user industry.

xiv. Domestic industry has significant idle capacity in India and there is no demand-supply gap. In any case, even if there would have been a demand-supply gap, the same does not justify dumping.

F.3 Examination by the Authority

35. It is noted that the Applicants have provided a duly substantiated application based on which the present investigation was initiated. The application was initiated after prime facie satisfaction regarding the existence of dumping, injury and causal link. A non-confidential version of the application has been circulated to the other interested parties. Post initiation of the investigation, the applicants have filed the updated data as per the period of investigation determined by the Authority. Non-confidential version of such data has also been circulated to the other interested parties.

36. It is noted that the period of investigation in the present case is 1st January 2019 – 31st December 2019. The injury period covers 2016-17, 2017-18, 2018-19 and the period of investigation. Thus, there is no gap in dumping analysis period and injury analysis period.

37. Some interested parties have submitted that if the anti-dumping duty is levied, the applicants will be able to increase its prices and create monopoly. It is noted that the present case pertains to a fragmented industry with number of producers and therefore possibility of creation of monopoly is highly unlikely.

38. Some interested parties have claimed that imposition of anti-dumping duty will adversely affect Government‘s ―Make in India‖ initiative and would adversely affect the interests of the users that belong to the MSME sector. It is noted that the purpose of imposition of anti-dumping duty is to protect domestic industry from unfair and dumped imports and thereby create a level playing field for the domestic producers and therefore it cannot be inconsistent with the Make in India initiative as it encourages domestic production.

39. The interested parties have highlighted certain irregularities in the data of the domestic industry. The Authority has verified the data of the domestic industry and only such verified data has been considered for the purpose of these present Final Findings.

G. NORMAL VALUE, EXPORT PRICE AND DETERMINATION OF DUMPING AND DUMPING MARGIN

G.1 Submission of other interested parties

The following submissions have been made by the other interested parties with regard to determination of normal value, export price and dumping margin:

i. The normal value should be determined based on the data furnished by the exporters and not imports into the country.

ii. Normal value has been determined based on imports into Indonesia, which does not represent comparable domestic prices.

iii. While export price has been considered at ex-factory level, normal value includes 7.5% customs duty imposed on imports of PSY in Indonesia, and thus, there is no fair comparison between the two.

iv. China PR should not be treated as a non-market economy subsequent to 11th December 2016. Appellate Body report in Fastener case against EU has provided strong justification that China PR should automatically obtain market-economy status.

v. Indian authority should not use surrogate country methodology in calculating normal value for this case, regardless of whether or not treating China PR as a non-market economy country.

vi. Turkey should not be considered as a surrogate country, due to differences in level of development between China PR and Turkey.

vii. The normal value should be adopted by the following parameters:

a. Raw material consumption norms should be based on inputs by participating producers/exporters.

b. International price of raw material may be considered.

c. Utilities cost should be worked out based on prevailing prices in China PR.

d. Interest rate prevailing in international market including China PR should be taken.

viii. The adjustments for determining the export price are uniform for all subject countries, which is irrational.

ix. Export price should have been PCN-wise and not cumulative. Evidence of adjustments claimed for export price have not been shared.

x. Net export price for Nepal is incorrect as adjustment has been made for ocean freight when the subject goods are exported through road, due to which FOB price and CIF price should be the same. Further, the conversion of adjustment into USD is inappropriate as exchange rate between Nepalese Rupees and Indian Rupees is constant.

xi. A month-wise comparison of normal value and export price must be carried out, as the prices of raw materials have declined by 30% over the period of investigation.

xii. In the investigation by Brazil, the price of exports of subject goods from India and from China was comparable, showing that the price of imports from China represents the international price of the goods.

G.2 Submissions of the domestic industry

41. The following submissions have been made by the domestic industry with regard to normal value, export price and dumping margin:

i. China PR should be treated as a non-market economy and the normal value should be determined in terms of Annexure I, Rule 7 of the Rules.

ii. In the application, the domestic industry had provided normal value for China PR based on imports into a surrogate country, Turkey. For other subject countries, the normal value was provided on the basis of imports into the respective country.

iii. Contrary to claims of interested parties, addition of customs duty to the import price is necessary for fair comparison between the normal value and export price at ex-factory level.

iv. The export price in the application was adjusted for ocean freight, marine insurance, commission, port expenses and inland freight.

v. Adjustments to the export price have been claimed as per the consistent practice of the Authority.

vi. The domestic industry has provided count-wise export price of imports.

vii. The domestic industry has considered road freight for Nepal, which was inadvertently written as ocean freight. Exchange rate has been considered as per practice of the Authority.

viii. Contrary to claims of the interested parties, the FOB and CIF price for Nepal cannot be the same as the latter includes freight and insurance.

ix. Normal value for producers/exporters should be determined based on their questionnaire responses only if those are complete in all aspects.

x. As none of the producers from Vietnam have participated, normal value should be determined based on imports into the country. This is because imports into the country is best available information with regard to price of goods when meant for consumption in the exporting country.

xi. Normal value for Vietnam should not be determined based on most efficient cost of the domestic industry as the law gives precedence to price of goods destined for consumption in the exporting country, which is available in the present case.

xii. The Authority has determined normal value based on imports into the subject countries in anti­dumping investigation on imports of Certain Rubber Chemicals namely PX13 from Chinese Taipei, EU, MOR from China PR, EU & USA and TDQ from Chinese Taipei and EU.

xiii. On 11th December 2016 only provision of Article 15(a)(ii) of the Accession Protocol expired but the provisions of Article (15)(a)(i) continues to remain in force, which require producers to show that they are operating under market economy conditions. The Authority has considered China PR as a non-market economy in all recent investigations unless the exporter / producer demonstrate that they are operating under market economy conditions.

xiv. As no producer from China PR has participated, the normal value should be calculated based on imports into surrogate country, that is, Turkey.

xv. Other interested parties have not provided any explanation on why the Authority should not consider surrogate country methodology.

xvi. Even if constructed normal value is considered, the actual cost of production of the whole domestic industry must be considered. Considering optimized cost of most efficient producer is not appropriate as it presupposes that each producer in the subject country is as efficient as the most efficient producer in India and is operating at optimum capacity utilisation and consuming optimum quantity of raw material and utilities.

xvii. Regarding the submission that international raw material prices should be considered for normal value, it was submitted that the Authority must first examine the price in a surrogate country or price of exports from a surrogate country. Then the preference must be given to price paid or payable in India. It is not appropriate to apply discretion and find alternate approaches under any other reasonable basis.

xviii. The Authority may undertake a month-wise comparison of normal value and export price if the raw material prices show a fluctuation over the period.

G.3 Examination by the Authority

42. As per section 9A(1)(c) of the Act, the normal value in relation to an article means:

“(i) the comparable price, in the ordinary course of trade, for the like article when destined for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section (6); or

(ii) when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either –

(a) comparable representative price of the like article when exported from the exporting country or territory to an appropriate third country as determined in accordance with the rules made under sub-section (6); or

(b) the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub- section (6):

Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transhipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin.”

43. The Authority sent questionnaires to the known producers/exporters from the subject countries, advising them to provide information in the form and manner prescribed by the Authority. The following producers/exporters have participated in the present investigation:

a. Fujian Changle Jinshagang Textile Corporation Limited, China PR

b. Fujian Jinlei Textile Company Limited, China PR

c. Fujian Xingjing Trading Company Limited, China PR

d. Jagdamba Spinning Mills (P) Limited, Nepal

e. Jinzhou Boao Textile Company Limited, China PR

f. Jinzhou Haoyu Textile Company Limited, China PR

g. Top Fibre Source Company Limited, China PR

h. Xianmen MC Group Corporation Limited, China PR

i. PT Adetex, Indonesia

j. PT Bitratex Industries, Indonesia

k. PT Dasar Rukun, Indonesia

l. PT Delta Dunia Sandang Tekstil, Indonesia

m. PT Delta Dunia Tekstil, Indonesia

n. PT Delta Merlin Sandang Tekstil, Indonesia

o. PT Dhanar Mas Concern, Indonesia

p. PT Elegant Textile Industry, Indonesia

q. PT Excellence Qualities Yarn, Indonesia

r. PT Indo Liberty Textiles, Indonesia

s. PT Indo-Rama Synthetics TBK, Indonesia

t. PT Primayudha Mandirjaya, Indonesia

u. PT Silver Kris, Indonesia

v. PT Sinar Pantja Djaja, Indonesia

w. PT Sunrise Bumi Textiles, Indonesia

x. PT Sunson Textile Manufacturer Tbk, Indonesia

y. PT Sri Rejeksi Isman, TBK, Indonesia

z. Reliance Spinning Mills Limited, Nepal

aa. Triveni Spinning Mills Private Limited, Nepal

bb. United Raw Material Pte Limited, Singapore

44. PT Indo Liberty Textiles has filed incomplete and deficient response. The Authority holds to reject the response filed by PT Indo Liberty Textiles as it has not filed the questionnaire response in line with the requirements of the Trade Notice 05/2018 dated 28 February, 2018.

45. Asosiasi Petekstilan Indonesia Badan Pengurus Nasional‘s response is not in line with the requirements mentioned in Trade Notice 05/2018 dated 28 February, 2018. Accordingly, the Authority holds to reject the response filed by Asosiasi Petekstilan Indonesia Badan Pengurus Nasional.

46. The Authority notes the following relevant provisions with regard to determination of normal value for China PR. Provisions under Para 7 and Para 8 of Annexure I to the Anti-Dumping Rules are 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.

8. (1) The term “non-market economy country” means any country which the designated authority determines as not operating on market principles of cost or pricing structures, so that sales of merchandise in such country do not reflect the fair value of the merchandise, in accordance with the criteria specified in subparagraph (3).

(2) There shall be a presumption that any country that has been determined to be, or has been treated as, a non-market economy country for purposes of an antidumping investigation by the designated authority or by the competent authority of any WTO member country during the three-year period preceding the investigation is a non-market economy country. Provided, however, that the non-market economy country or the concerned firms from such country may rebut such a presumption by providing information and evidence to the designated authority that establishes that such country is not a non-market economy country on the basis of the criteria specified in sub-paragraph (3)

(3) The designated authority shall consider in each case the following criteria as to whether: (a) the decisions of the concerned firms in such country regarding prices, costs and inputs, including raw materials, cost of technology and labour, output, sales and investment, are made in response to market signals reflecting supply and demand and without significant State interference in this regard, and whether costs of major inputs substantially reflect market values; (b) the production costs and financial situation of such firms are subject to significant distortions carried over from the former non-market economy system, in particular in relation to depreciation of assets, other write-offs, barter trade and payment via compensation of debts; (c) such firms are subject to bankruptcy and property laws which guarantee legal certainty and stability for the operation of the firms, and (d) the exchange rate conversions are carried out at the market rate. Provided, however, that where it is shown by sufficient evidence in writing on the basis of the criteria specified in this paragraph that market conditions prevail for one or more such firms subject to anti-dumping investigations, the designated authority may apply the principles set out in paragraphs 1 to 6 instead of the principles set out in paragraph 7 and in this paragraph.

(4) Notwithstanding, anything contained in sub-paragraph (2), the designated authority may treat such country as market economy country which, on the basis of the latest detailed evaluation of relevant criteria, which includes the criteria specified in sub paragraph (3), has been, by publication of such evaluation in a public document, treated or determined to be treated as a market economy country for the purposes of anti-dumping investigations, by a country which is a Member of the World Trade Organization.”

47. At the stage of initiation, the Authority proceeded with the presumption by treating China PR as a non-market economy country. Upon initiation, the Authority advised the producers/exporters in China PR to respond to the notice of initiation and provide information whether their data/information could be adopted for the purpose of normal value determination. The Authority sent copies of market economy treatment/supplementary questionnaire to all the known producers/ exporters in China PR for providing relevant information in this regard.

48. Article 15 of China PR‘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 PR 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 WTO Member may use a methodology that is not based on a strict comparison with domestic prices or costs in China PR 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 PR 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 PR.

(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 PR 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 provisions of subparagraph (a)(ii) shall expire 15 years after the date of accession. In addition, should China PR establish, pursuant to the national law of the importing WTO Member, that market economy conditions prevail in a particular industry or sector, the non-market economy provisions of subparagraph (a) shall no longer apply to that industry or sector.”

49. The Authority notes that while the provisions of Article 15 (a)(ii) of China PR‘s Accession Protocol have expired with effect from 11th December 2016, the provision under Article 2.2.1.1 of the Anti-Dumping Agreement read with obligation under 15(a)(i) of the Accession Protocol require criterion stipulated in Para 8 of the Annexure 1 of Anti-Dumping Rules to be satisfied through the information/data to be provided in the supplementary questionnaire for claiming MET status. The Authority notes that no producer or exporter from China PR has submitted market economy treatment or supplementary questionnaire response. The normal value computation for these producers/exporters are required to be determined in terms of provisions of Para 7 of Annexure-1 of Anti-Dumping Rules.

Determination of normal value for China PR
Normal Value China

50. As none of the producers from China PR have claimed market economy treatment on the basis of their data/information, the normal value has been determined in accordance with para 7 of Annexure I of the Rules which reads as under:

In case of imports from non-market economy countries, normal value shall be determined on the basis if the price or constructed value in the market economy third country, or the price from such a third country to other countries, including India or where it is not possible, or 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 manne4 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 selection. Accounts shall be taken within time limits, where appropriate, of the investigation made in any similar matter in respect of any other market economy third country. The parties to the investigation shall be informed without any unreasonable delay the aforesaid selection of the market economy third country and shall be given a reasonable period of time to offer their comments.

51. The domestic industry has claimed normal value for China PR based on the exports from Turkey. However, sufficient information was not provided by the domestic industry to consider application of the first proviso of para 7 nor any information is available with the Authority for the same. Thus, normal value has been determined on any other reasonable basis. It has accordingly been determined considering optimised cost of production in India, after addition for selling, general & administrative expenses and reasonable profits. The normal value determined is given below in dumping margin table below.

Export price:

I. Export price of Jinzhou Boao Textile Co., Ltd. China PR (Producer) and Xianmen MC Group Corp. Ltd. (Exporter)

52. Jinzhou Boao Textile Co., Ltd. (hereinafter also referred to as “Boao” or’ the Company”) is a company incorporated in China. Both producer and exporter have filed the questionnaire response. It is noted that Boao, the producer exported *** MT of the subject goods through Xianmen MC Group Corp. Ltd. (Xianmen). It is noted from the questionnaire response filed by the trader that it has sold the subject goods to India at losses. Therefore, the Authority has made necessary adjustments to arrive at ex-factory price. The Authority has further made adjustments on account of ocean freight, insurance, inland freight, credit and bank charges in order to arrive at the weighted average PCN-wise export price at ex-factory level. The ex-factory export price as determined is given in the dumping margin table below.

II. Export price of Jinzhou Haoyu Textile Co., Ltd. China PR (Producer) and Xianmen MC Group Corp. Ltd. (Exporter)

53. Jinzhou Haoyu Textile Co., Ltd. (hereinafter also referred to as “Haoyu “or’ the Company”) is a company incorporated in China. Both producer and exporter have filed the questionnaire response. It is noted that Haaoyu, the producer, exported *** MT of the subject goods through Xianmen MC Group Corp. Ltd. (Xianmen). It is noted from the questionnaire response filed by the trader that it has sold the subject goods to India at losses. Therefore, the Authority had made necessary adjustments to arrive at ex-factory price. The Authority has further made adjustments on account of ocean freight, insurance, inland freight, credit and bank charges in order to arrive at the weighted average PCN-wise export price at ex-factory level. The ex-factory export price as determined is given in the dumping margin table below.

III. Export price of Fujian Changle Jinshagang Textile Corp PR (Producer) and traders Xianmen MC Group Corp. Ltd, Fujian Xingjing Trading Co., Ltd., China PR and subsequently through United Raw Material Pte. Ltd., Singapore.

54. Fujian Changle Jinshagang Textile Corp. PR. (hereinafter also referred to as “Changle “or’ the Company”), the producer and all linked traders have filed the questionnaire response. It is noted that producer has exported *** MT of the subject goods to India through above-mentioned traders. Out of these *** MT, *** MT is exported to India directly through trader Xianmen MC Group Corp. Ltd. (Xianmen) and remaining 48 MT is through the channel Fujian Xingjing Trading Co., Ltd., China PR (Xingjing) and United Raw Material Pte. Ltd. (United), Singapore. From the questionnaire responses filed by the traders, it is noted that all the three traders namely Xianmen, Xingjing and United have sold the subject goods to India at losses. Therefore, the Authority had made necessary adjustments to reach to ex-factory price. The Authority has further made adjustments on account of ocean freight, insurance, inland freight, credit cost and bank charges in order to arrive at the weighted average PCN-wise export price at ex-factory level. The ex-factory export price as determined is given in the dumping margin table below.

IV. Export price of Fujian Jinlei Textile Co., Ltd., China PR and traders Fujian Xingjing Trading Co., Ltd., China PR (Xingjing), Top Fibre Source Co., Limited (Top), China PR and subsequently through United Raw Material Pte. Ltd., Singapore (United).

55. Fujian Jinlei Textile Co. Ltd. (hereinafter also referred to as “Jinlei “or’ the Company”), the producer and all linked traders have filed the questionnaire response. The producer has exported *** MT of the subject goods to India through traders. Out of these *** MT, *** MT is exported through the channel Fujian Xingjing Trading Co., Ltd., China PR and United Raw Material Pte. Ltd. (United) Singapore while remaining *** MT has been exported through Fujian Xingjing Trading Co., Ltd., China PR, Top Fibre Source Co., Limited and United Raw Material Pte. Ltd. Singapore channel. From their questionnaire response filed by the traders, it is noted that all the three traders namely United, Xingjing and Top have sold the subject goods to India at losses. Therefore, the Authority had made necessary adjustments to reach to ex-factory price. The Authority has further made adjustments on account of ocean freight, insurance and credit in order to arrive at the weighted average PCN-wise export price at ex-factory level. The ex-factory export price as determined is given in the dumping margin table below.

V. Export price of non-cooperative exporters from China PR

56. Export price in respect of any other exporters from China PR has been determined, as per facts available in terms of Rule 6(8) of the Rules. The ex-factory export price as determined is given in the dumping margin table below.

Indonesia

VI. PT Sinar Pantja Djaja, Indonesia

Normal value

57. From the data filed by PT. Sinar Pantja Djaja, which is a producer and exporter of the subject goods from Indonesia, it is noted that they have exported *** MT of the subject goods directly to unrelated customers in India. It has sold *** MT in the domestic market. None of the PCNs exported to India were sold in the domestic market. Accordingly, normal value has been constructed based on the cost of production of the PCNs of the producer exported to India after adding for reasonable profits. The weighted average constructed Normal Value for PT Sinar Pantja Djaja so determined is mentioned in the dumping margin Table below.

Export price

58. In the exporter‘s questionnaire response, the producer / exporter stated that during the POI they directly exported *** MT to unrelated customers in India. The Authority has further made other adjustments in order to arrive at the weighted average PCN-wise export price at ex-factory level. The ex-factory export price as determined is given in the dumping margin table below.

VII. PT Sri Rejeki Isman, Tbk Indonesia

Normal Value

59. From the response filed by the PT Sri Rejeki Isman, Tbk, the cooperating producer and exporter from Indonesia, it is noted that they have exported *** MT of the subject goods directly to unrelated customers in India. The exporter has sold *** MT of different PCNs in the domestic market. In order to determine the normal value, the Authority has conducted the ordinary course of trade test to determine profit making domestic sales transactions with reference to cost of production of subject goods. In case profit making transactions are more than 80% then the Authority has considered all the transactions in the domestic market for the determination of the normal value. Where the profitable transactions are less than 80%, only profitable domestic sales are taken into consideration for the determination of normal value. The weighted average Normal Value so determined is mentioned in the dumping margin Table below.

Export Price

60. In the exporters‘ questionnaire response, the producer / exporter stated that during the POI they directly exported *** MT to unrelated customers in India. The Authority has made further adjustments in order to arrive at the weighted average PCN-wise export price at ex-factory level. Accordingly, the export price determined is provided in the dumping margin Table below.

VIII. PT. Dasar Rukun, Indonesia

Normal Value

61. From the data filed by the PT. Dasar Rukun, the cooperating producer and exporter from Indonesia, it is noted that they have exported ***MT of the subject goods directly to unrelated Indian customers. The exporter has sold *** MT in the domestic market. In order to determine the normal value, the Authority has conducted the ordinary course of trade (OCD) test to determine profit making domestic sales transactions with reference to cost of production of subject goods. In case profit making transactions are more than 80% then the Authority has considered all the transactions in the domestic market for the determination of the normal value. Where the profitable transactions are less than 80%, only profitable domestic sales are taken into consideration for the determination of normal value. The exporter has claimed adjustments and same has been considered to arrive at the normal value for the PCN exported to India. The weighted average Normal Value so determined is mentioned in the dumping margin Table below.

Export Price

62. In the exporters‘ questionnaire response, the producer / exporter stated that during the POI they directly exported *** MT to unrelated customers in India. The Authority has further made adjustments on account of ocean freight, insurance, inland freight, credit cost, sales commission and handling expenses in order to arrive at the weighted average PCN-wise export price at ex-factory level. Accordingly, the export price determined is provided in the dumping margin Table below.

IX. PT. Delta Merlin Sandang Tekstil, Indonesia

Normal Value

63. From the data filed by PT. Delta Merlin Sandang Tekstil, the cooperating producer and exporter from Indonesia, it is noted that they have exported *** MT of the subject goods directly to unrelated Indian customers and *** MT through an unrelated Trader. The exporter has sold *** MT in the domestic market to unrelated customers and *** MT to related customers. The trader though which subject goods were exported to India as well as related domestic customers have not filed questionnaire response. In order to determine the normal value, the Authority has conducted the ordinary course of trade (OCD) test to determine profit making domestic sales transactions with reference to cost of production of subject goods. In case profit making transactions are more than 80% then the Authority has considered all the transactions in the domestic market for the determination of the normal value. Where the profitable transactions are less than 80%, only profitable domestic sales are taken into consideration for the determination of normal value. Since, all domestic sales are loss making, the normal value has been constructed based on the cost of production of the PCNs of the producer exported to India after adding for reasonable profits. The weighted average Normal Value so determined is mentioned in the dumping margin Table below.

Export Price

64. In the questionnaire response, the producer / exporter stated that they have exported ***MT of the subject goods directly to unrelated Indian customers and *** MT through an unrelated Trader. Since, unrelated trader has not filed the questionnaire response, the determination of net export price and landed have been made considering the subject goods exported directly to India. The Authority has further made adjustments on account of ocean freight, insurance, inland freight, credit cost, bank charges, sales commission and handling expenses in order to arrive at the weighted average PCN-wise export price at ex-factory level. Accordingly, the export price determined is provided in the dumping margin Table below.

XI. PT. Delta Dunia Tekstil, Indonesia

Normal Value

65. From the data filed by PT. Delta Dunia Tekstil the cooperating producer and exporter from Indonesia, it is noted that they have exported *** MT of the subject goods directly to unrelated Indian customers and *** MT through unrelated Traders. The exporter has sold *** MT in the domestic market to unrelated customers and *** MT to related customers. The traders though which subject goods were exported to India as well as related domestic customers have not filed questionnaire response. In order to determine the normal value, the Authority has conducted the ordinary course of trade (OCD) test to determine profit making domestic sales transactions with reference to cost of production of subject goods. In case profit making transactions are more than 80% then the Authority has considered all the transactions in the domestic market for the determination of the normal value. Where the profitable transactions are less than 80%, only profitable domestic sales are taken into consideration for the determination of normal value. Since, negligible quantities of the domestic sales are profit making, the normal value has been constructed based on the cost of production of the PCNs of the producer exported to India after adding for reasonable profits. The weighted average Normal Value so determined is mentioned in the dumping margin Table below.

Export Price

66. In the questionnaire response, the producer / exporter stated that have exported ***MT of the subject goods directly to unrelated Indian customers and *** MT through unrelated Traders. Since, unrelated traders have not filed the questionnaire response, the determination of net export price and landed have been made considering the subject goods exported directly to India. The Authority has made further adjustments in order to arrive at the weighted average PCN-wise export price at ex-factory level. Accordingly, the export price determined is provided in the dumping margin Table below.

XI.PT. Delta Dunia Sandang Tekstil, Indonesia

Normal Value

67. From the data filed by PT. Delta Dunia Sandang Tekstil the cooperating producer and exporter from Indonesia, it is noted that they have exported *** MT of the subject goods directly to unrelated Indian customers. The exporter has sold *** MT in the domestic market to unrelated customers and *** MT to related customers. The related domestic customers have not filed questionnaire response. In order to determine the normal value, the Authority has conducted the ordinary course of trade (OCT) test to determine profit making domestic sales transactions with reference to cost of production of subject goods. In case profit making transactions are more than 80% then the Authority has considered all the transactions in the domestic market for the determination of the normal value. Where the profitable transactions are less than 80%, only profitable domestic sales are taken into consideration for the determination of normal value. Since, negligible quantities of the domestic sales are profit making, the normal value has been constructed based on the cost of production of the PCNs of the producer exported to India after adding for reasonable profits. The weighted average Normal Value so determined is mentioned in the dumping margin Table below.

Export Price

68. In the questionnaire response, the producer / exporter stated that have exported ***MT of the subject goods directly to unrelated Indian customers. The Authority has further made adjustments on account of ocean freight, insurance, inland freight, credit cost and bank charges in order to arrive at the weighted average PCN-wise export price at ex-factory level. Accordingly, the export price determined is provided in the dumping margin Table below.

XII. Indorama Industries Limited

Normal value

69. From the data filed by the PT. Indo-Rama Synthetics TBK, the cooperating producer and exporter from Indonesia, it is noted that they have exported *** MT of the subject goods directly to India to unrelated customers. The exporter has sold *** MT of different PCNs in the domestic market. In order to determine the normal value, the Authority has conducted the ordinary course of trade test to determine profit making domestic sales transactions with reference to cost of production of subject goods. In case profit making transactions are more than 80% then the Authority has considered all the transactions in the domestic market for the determination of the normal value. Where the profitable transactions are less than 80%, only profitable domestic sales are taken into consideration for the determination of normal value. The exporter has claimed adjustments and same has been considered to arrive at the normal value for the PCNs exported to India. The weighted average Normal Value determined for PT. Indo-Rama Synthetics TBK is mentioned in the dumping margin Table below.

Export price

70. In the exporters‘ questionnaire response, the producer / exporter stated that during the POI they directly exported *** MT to unrelated parties in India. The Authority has made further adjustments in order to arrive at the weighted average PCN-wise export price at ex-factory level. Accordingly, the export price determined is provided in the dumping margin Table below.

XIII. Non-cooperative exporters from Indonesia

Normal Value

71. For all the non-cooperative exporters/producers in Indonesia, the Authority has determined the normal value on the basis of facts available in terms of Rule 6(8) of the Rules. The normal value as determined is given in the dumping margin table below.

Export Price

72. Export price in respect of other exporters from Indonesia has been determined, as per facts available in terms of Rule 6(8) of the Rules. The ex-factory export price as determined is given in the dumping margin table below.

Nepal

XIV. Reliance Spinning Mills Limited

Normal value

73. From the data filed by the Reliance Spinning Mills Limited, the cooperating producer and exporter from Nepal, it is noted that they have exported *** MT of the subject goods directly to India to unrelated customers. The exporter has sold *** MT of different PCNs in the domestic market. In order to determine the normal value, the Authority has conducted the ordinary course of trade test to determine profit making domestic sales transactions with reference to cost of production of subject goods. In case profit making transactions are more than 80% then the Authority has considered all the transactions in the domestic market for the determination of the normal value. Where the profitable transactions are less than 80%, only profitable domestic sales are taken into consideration for the determination of normal value. The adjustments claimed by the producer/ exporter has been considered to arrive at the normal value for the PCNs exported to India. The weighted average Normal Value determined for Reliance Spinning Mill is mentioned in the dumping margin Table below.

Export Price

74. In the exporters‘ questionnaire response, the producer / exporter stated that during the POI they directly exported *** MT to unrelated parties in India. The Authority has further made adjustments in order to arrive at the weighted average PCN-wise export price at ex-factory level. Accordingly, the export price determined is provided in the dumping margin Table below.

XV. Triveni Spinning Mills Private Limited

Normal value

75. From the data filed by the Triveni Spinning Mills Pvt. Limited, the cooperating producer and exporter from Nepal, it is noted that they have exported *** MT of the subject goods directly to India to unrelated customers. The exporter has sold *** MT of different PCNs in the domestic market. In order to determine the normal value, the Authority has conducted the ordinary course of trade test to determine profit making domestic sales transactions with reference to cost of production of subject goods. In case profit making transactions are more than 80% then the Authority has considered all the transactions in the domestic market for the determination of the normal value. Where the profitable transactions are less than 80%, only profitable domestic sales are taken into consideration for the determination of normal value. The adjustments claimed by the producer/ exporters has been considered to arrive at the normal value for the PCNs exported to India. The weighted average Normal Value for Triveni Spinning Mills Private Limited so determined is mentioned in the dumping margin Table below.

Export Price

76. In the exporters‘ questionnaire response, the producer / exporter stated that during the POI they directly exported *** MT to unrelated parties in India. The Authority has further made adjustments in order to arrive at the weighted average PCN-wise export price at ex-factory level. Accordingly, the export price determined is provided in the dumping margin Table below.

XVI. Jagdamba Spinning Mills (P.) Ltd.

Normal value

77. From the data filed by the Jagdamba Spinning Mills (P.) Ltd, the cooperating producer and exporter from Nepal, it is noted that they have exported *** MT of the subject goods directly to unrelated customers in India. The exporter has sold *** MT of different PCNs in the domestic market. In order to determine the normal value, the Authority has conducted the sufficiency test and ordinary course of trade test to determine profit making domestic sales transactions with reference to cost of production of subject goods. The Authority has noted that the domestic sales failed sufficiency test. Therefore, the Authority has constructed the normal value considering cost of the PCNs exported to India after adding reasonable profit. The weighted average Normal Value for Jagdamba Spinning Mills (P.) Ltd. so determined is mentioned in the dumping margin Table below.

Export Price

78. In the exporters‘ questionnaire response, the producer / exporter stated that during the POI they directly exported *** MT to unrelated customers in India. The Authority has further made adjustments in order to arrive at the weighted average PCN-wise export price at ex-factory level. Accordingly, the export price determined is provided in the dumping margin Table below.

XVII. Non-cooperative exporters from Nepal

Normal Value

79. For all the non-cooperative exporters/producers in Nepal, the Authority determined the normal value on the basis of facts available in terms of Rule 6(8) of the Rules. The normal value as determined is given in the dumping margin table below.

Export Price

80. Export price in respect of any other exporters from Nepal has been determined, as per facts available in terms of Rule 6(8) of the Rules. The ex-factory export price as determined is given in the dumping margin table below.

Vietnam:

81. The Authority notes that none of the producers/exporters have cooperated in the present investigation. Accordingly, the normal value and export price for Vietnam has been determined on the basis of fact available in terms of Rule 6 (8) of the Rules. The constructed normal value, net export price and dumping margin in respect of producers/exporters of the subject goods so determined is given in the dumping margin table below.

DUMPING MARGIN TABLE

Country Producer / Exporter Normal Value/ CNV (US$ /MT) Export
Price
(US$/MT)
Dumping Margin (US$/MT) Weighted Average DM% Range

(%)

China PR Fujian Jinlei Textiles Co., Ltd. *** *** *** *** 25-35
Jinzhou Boao Textile Co., Ltd *** *** *** *** 20-30
Jinzhou Haoyu Textile Co., Ltd *** *** *** *** 20-30
Fujian Changle Jinshagang Textile Corp.Ltd *** *** *** *** 20-30
Other Producers/ Exporters *** *** *** *** 25-35
Indonesia PT Sinar Pantja
Djaja, INDONESIA
*** *** *** *** 10-20
PT. Sri Rejekt
Isman Tbk -Sritex
*** *** *** *** 10-20
PT. Dasar Rukun *** *** *** *** 10-20
PT Indo-Rama
Synthetics Tbk
*** *** *** *** 0-10
PT. Delta Merlin
Sandang Tekstil
*** *** *** *** 20-30
PT. Delta Dunia
Tekstil, Indonesia
*** *** *** *** 20-30
PT. Delta Dunia
Sandang Tekstil
*** *** *** *** 20-30
Other Producers
and Exporters
*** *** *** *** 40-50
Nepal Triveni Spinning
Mills Pvt. Ltd.
Nepal
*** *** *** *** (10)-0
Reliance Spinning
Mills Ltd
*** *** *** *** 0-10
Jagdamba Spinning
Mills (P) Ltd
*** *** *** *** (10)-0
Other Producers
and Exporters
*** *** *** *** 0-10
Vietnam All Producers/
Exporters
*** *** *** *** 15-25

82. It is noted that the dumping margins for the subject countries except Nepal are more than the de-minimis and are significant.

H. ASSESSMENT OF INJURY AND CAUSAL LINK

H.1 Submissions of other interested parties

The following submissions have been made by other interested parties with regard to injury and causal link:

i. Cumulative assessment is not appropriate as imports from China PR have declined, while that from other countries have increased. The Panel in EC – Tube and Pipe Fittings noted that country-specific volume trends may be relevant to evaluate competition between imported products and domestic products.

ii. Imports have increased to fulfil the demand-supply gap. Even if operated at full capacity, the domestic industry would not be able to fulfil the demand in the country.

iii. There is no injury caused by imports from China PR as the imports have declined, while demand has increased; and the market share of China PR has decreased.

iv. The price undercutting dropped in the period of investigation as compared to the previous years, and the applicants were able to increase their prices in tandem with cost, implying that there was no adverse price effect of imports.

v. Import prices from Indonesia and China PR have increased over the period of investigation.

vi. Capacity and production of the domestic industry have increased. Decline in capacity utilisation is due to increase in capacity.

vii. Capacity, production, sales and profitability of the domestic industry increased over the injury period. Despite imports during the period of investigation, most of the parameters of domestic industry were stable.

viii. Production and capacity utilisation of the producers vary as the same machines are used for producing various goods.

ix. Capacity installed should be given based on the number of spindles installed as all producers report their capacity based on spindles on their websites. A company might be running at 100% capacity utilisation but the production in weight may be less than its previous production as weight of different PCNs differ.

x. Contrary to claim of the domestic industry, the petitioning companies have doubled the number of spindles, and are running at 92% of capacity.

xi. As per the annual reports of the applicants, the demand in the country declined but the applicant was able to increase its production and sales. As per the annual reports of the applicants, they are working at 94% capacity utilisation. One of the applicants has expanded its capacity which is not possible if it is in losses.

xii. The market share must be seen with regard to domestic industry only, and not the domestic producers as a whole.

xiii. The number of employees and productivity of the domestic industry have increased.

xiv. The increase in stock must be seen in light of the increase in capacity of the domestic industry.

xv. Cost of production does not relate only to the product under consideration and thus, the selling price, cost and profit cannot be considered.

xvi. The applicants have adjusted the cost of production to eliminate losses due to excise duty on raw material. The policies which a burden and cause injury to the applicants must be explained.

xvii. There are no actual and potential decline in the parameters of domestic industry. The annual reports of the applicants do not show any injury.

xviii. The major producers of subject goods are not suffering any injury. The producers are multi­product companies and captively consume subject goods for downstream products. Non­participating producers like RSWM, GHCL and Banswara Syntex have higher selling price and are earning profits.

xviiii. The selection of domestic industry was done so that injury could be artificially created. The data of applicants is not representative of the data of other non-participating producers.

xix. Factors such as poor export performance, competition amongst domestic producers, capacity expansion by the applicants resulting in inefficiency of their costs, captive transfers and reduction in sales of downstream products have caused injury to the domestic industry.

xx. The Authority did not recommend imposition of duty on PSF as there were other causes of injury and the price in the Indian market was driven by Reliance Industries.

xv. The Authority did not recommend imposition of duty on PSF as there were other causes of injury and the price in the Indian market was driven by Reliance Industries.

xvi. Domestic industry is not able to stabilize its capacity which resulted in negative impact on the overall performance of the applicants.

xvii. The injury to the domestic industry has been on account of higher cost of raw material and inability to procure raw materials at competitive prices.

xviii. One of the applicants was shut down from February to July 2019 due to workers strike due to which it was in losses.

xix. Domestic industry was not able to take refund of excise duty on inputs and have included the same in the cost of production. Such excise duty should be excluded for calculation of non-injurious price.

xx. In order to compute non-injurious price, international raw material prices should be taken, as the domestic raw material producers charge higher for domestic sales of PSF, which is a non-attributable factor.

xxi. A return of 22% should not be considered for determination of non-injurious price for the following reasons:

a. It is inflated considering present interest rates and tax rates.

b. The Tribunal has also considered 22% return to be inappropriate in Bridge Stone Tyre Manufacturing vs. Designated Authority and Hyosung Corporation vs. Designated Authority.

c. Actual profits earned by domestic industry during the period where there was no allegation of dumping should be considered instead, as is done by European Commission and was upheld in the case of European Fertilizer Manufacturers‘ Association V. Council.

H.2 Submissions of the domestic industry

84. The following submissions have been made by the domestic industry with regard to injury and causal link:

i. Cumulative analysis of injury is appropriate considering volume of imports, margins of dumping and conditions of competition between imported products and domestic like product.

ii. Cumulative assessment is necessary in the present case as the fact that imports from China PR have lost market to imports from other subject countries shows inter-se competition between the imports. The prices of imports from all subject countries have moved in tandem with each other.

iii. There are 50 million spindles in India out of which 4 million are idle. If the situation does not improve, a lot more spindles will be shut down.

iv. Imports imply loss to Indian industry in terms of number of spindles losing production, number of companies losing production, number of employees losing employment and the investment becoming idle.

v. Dumping has made manufacturing unviable and as a result a number of producers are importing and trading the subject goods. If the situation does not improve the producers will be compelled to increase trading and reduce manufacturing.

vi. Volume of imports has increased in absolute and relative terms.

vii. The imports are undercutting the prices of the domestic industry, and are priced below the cost of the domestic industry.

viii. The imports have suppressed the prices of the domestic industry.

ix. Although production, capacity and sales increased, the capacity utilization of the industry declined.

x. As against the claims of interested parties, both the capacity and production reported are for the type of product produced. Decline in capacity utilization is an actual decline due to under-utilized capacities.

xi. Inventories and inventory holding period of the domestic industry have increased significantly.

xii. Volume effect should be considered for domestic producers as a whole as most injury in terms of market share, decline in sales, underutilisation of capacities etc. is caused to the smaller producers which are not in a position to organize and file an application. The Authority has considered the market share as a whole in number of past investigations. Even in European Union, macroeconomic parameters are examined for producers as a whole, while microeconomic parameters are examined for the domestic industry.

xiii. The volume parameters of domestic producers as a whole show that the industry has not been able to increase its sales in tandem with increase in demand, and as a result, market share declined.

xiv. The profits, cash profits and return on investment of the domestic industry have declined.

xv. The cost reported by the domestic industry relates wholly to the product under consideration.

xvi. Prior to introduction of GST, the product under consideration was exempt from duty and as a result, the excise duty paid on raw material was a cost to the producer. However, post introduction of GST, the product is under GST regime and as a result, the producers can take credit of taxes paid on raw material. Post introduction of GST, the industry had expected to witness an improvement in profits. However, such respite remained short lived.

xvii. The imports have prevented the domestic industry from earning a reasonable rate of return.

xviii. The imports have impacted the ability of the domestic industry to raise capital investments.

xix. As regards the submission that other producers have not suffered injury, it was submitted that the injury analysis must be undertaken for the defined domestic industry. In any case, it is possible to determine performance of other producers only when they participate in the investigation.

xx. The domestic industry has not suffered injury due to any other factor.

xxi. There is causal link between dumping and injury to the domestic industry.

xxii. The applicants have segregated the data relating to domestic and export performance. The exports of the domestic industry are negligible and less than 5% of the total sales, and thus, could not have caused injury to the domestic industry.

xxiii. The domestic producers have been competing inter-se throughout the injury period and no market factors have changed which could cause injury. The domestic producers as a whole have lost market share to dumped imports.

xxiv. The domestic industry has increased capacity in view of the increasing demand for the product, and injury suffered cannot be considered to be on account of such expansion.

xxv. The demand in the country is sufficient for the domestic industry to utilize its capacities. It is prevented from utilizing its capacities only due to the dumped imports.

xxvi. The inventories of the domestic industry have increased more than the increase in capacity, and thus, the increase in inventories is not due to the increased capacity.

xxvii. The interested parties have presumed that the domestic producers have not been able to stabilize capacities. Only Suryalata Spinning Mills expanded its capacity during the period of investigation. Even if such capacity is considered not to have been stabilized, such capacity consists of a very small part of the unutilised capacities.

xxviii. Captive consumption of the domestic industry is less than 1% of its total sales, and thus, cannot be considered as the cause of injury to the domestic industry.

xxix. With regard to the allegation that the domestic industry suffered injury due to higher raw material cost, it is submitted that injury to the domestic industry is required to be seen as it exists.

xxx. Contrary to claims of the interested parties, none of the applicants faced strike in their plants during the period of investigation.

xxxi. Excise duty was not applicable during period of investigation and domestic industry received full credit of GST. Such cost is not included in non-injurious price, and concerns in this regard are unfounded.

xxxii. Responding to the claims that international raw material prices should be considered for determination of non-injurious price, it was emphasized that the other interested parties have not demonstrated that the domestic prices of raw material are artificially inflated. Non-injurious price is required to be determined as per records of the company and the cost of raw materials actually paid cannot be disregarded.

xxxiii. Contrary to the claims of the interested parties, the Tribunal has, in a plethora of decisions, consistently taken the view that unless the interested parties demonstrate the need for considering a different return, a return of 22% shall be allowed. Reference to Bridge Stone Tyre Manufacturing Vs. Designated Authority is not appropriate as in that case, the interested parties brought evidence to demonstrate that the global returns for the product were less than 22%.

H.3 Examination by the Authority

85. The Authority has taken note of the arguments and counter-arguments of the interested parties with regard to injury to the domestic industry. The injury analysis by the Authority hereinunder addresses the various submissions made by the interested parties.

86. Article 3.3 of WTO agreement and Para (iii) of Annexure II of the Rules provides that in case where imports of a product from more than one country are being simultaneously subjected to anti-dumping investigation, the Authority will cumulatively assess the effect of such imports, in case it determines that:

a. The margin of dumping established in relation to the imports from each country is more than 2% expressed as a percentage of export price and the volume of the imports from each country is 3% or more of the import of like article or where the export of individual countries is less than 3%, the imports collectively account for more than 7% of the import of like article, and

b. Cumulative assessment of the effect of imports is appropriate in the light of the conditions of competition between the imported article and the like domestic articles.

87. The Authority notes that:

a. The subject goods are being dumped into India from the subject countries. The margin of dumping from each of the subject countries is more than 2% of the export price.

b. The volume of imports from each of the subject countries is individually more than 3% of the total volume of imports.

c. Cumulative assessment of the effects of import is appropriate as the exports from the subject countries not only directly compete with the like articles offered by each of them but also with the like articles offered by the domestic industry in the Indian market.

88. In view of the above, the Authority holds to consider it appropriate to cumulatively assess the effects of dumped imports of the subject goods from China PR, Indonesia, Nepal and Vietnam on the domestic industry.

89. Rule 11 of the Rules read with Annexure-II thereto 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 to 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 Rules.

90. The submissions made by the domestic industry and other interested parties during the course of investigations with regards to injury and causal link and considered relevant by the Authority are examined and addressed as under:

I. Assessment of Demand / Apparent Consumption

91. The Authority has defined, for the purpose of the present investigation, demand or apparent consumption of the product concerned in India as the sum of domestic sales of the domestic industry and other Indian producers and imports from all sources. The demand so assessed is given in the table below.

Particulars Units 2016-17 2017-18 2018-19 POI
Subject imports MT 35,382 46,187 38,496 51,591
China PR MT 23,791 20,146 12,127 13,044
Indonesia MT 6,631 20,448 21,522 28,113
Nepal MT 4,665 4,436 4,118 4,315
Vietnam MT 296 1,157 730 6,119
Other imports MT 386 613
Sales of domestic industry MT 47,478 47,380 53,599 57,397
Sales of other producers MT 1,30,570 1,30,369 1,33,637 1,65,348
Demand MT 2,13,431 2,23,936 2,26,118 2,74,948

92. It is seen that the demand for the product under consideration has increased over the injury period.

II. Volume Effect of Dumped Imports

93. With regard to the volume of the dumped imports, the Authority is required to consider whether there has been a significant increase in dumped imports, either in absolute terms or in relation to production or consumption in India. For the purpose of injury analysis, the Authority has relied on the transaction-wise import data procured from DGCI&S. The import volumes of the subject goods from subject countries and share of the dumped imports during the injury investigation period are as follows:

Particulars Units 2016-17 2017-18 2018-19 POI
Subject imports MT 35,382 46,187 38,496 51,591
China PR MT 23,791 20,146 12,127 13,044
Indonesia MT 6,631 20,448 21,522 28,113
Nepal MT 4,665 4,436 4,118 4,315
Vietnam MT 296 1,157 730 6,119
Indian production MT 1,80,327 1,79,581 1,89,887 223,732
Imports in relation to
Indian production % 19.32% 25.36% 21.75% 25.53%
Consumption % 16.58% 20.63% 17.02% 18.76%
Total imports % 100% 100% 99% 99%

94. It is seen that:

i. The volume of subject imports increased in 2017-18 as compared to the previous year, but thereafter declined in 2018-19. The volume of subject imports has once again increased in the period of investigation.

ii. The volume of imports in relative terms has also followed the same trend.

III. Price Effect of Dumped Imports

95. In terms of Annexure II(ii) of the Rules, with regard to the effect of the dumped imports on the prices of the domestic industry, the Authority is required to consider whether there has been a significant price undercutting by the dumped imports as compared with the price of the like product 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.

i. Price Undercutting

96. To determine price undercutting, a comparison has been made between the landed value of the product and the average selling price of the domestic industry, net of all rebates and taxes, at the same level of trade. The prices of the domestic industry were determined at the ex-factory level. Further, in order to ensure a fair comparison, the price undercutting has been determined PCN-wise.

Particulars Units China PR Indonesia Nepal Vietnam
Landed value Rs./MT 127,715 127,023 125,477 125,656
Net sales realisation Rs./MT *** *** *** ***
Trend Indexed 100 100 87 99
Price undercutting Rs./MT *** *** (***) ***
100 102 -113 101
Price undercutting % *** *** (***) ***
100 103 -115 103
Price undercutting Range 0-10% 0-10% Negative 0-10%

97. It is seen that price undercutting for each of the subject country, except for Nepal, is positive.

ii. Price Suppression and Depression

98. In order to determine whether the effect of imports is to depress the prices of the domestic industry to a significant degree or prevent price increases which otherwise would have occurred, the information given by the domestic industry for the changes in the costs and prices over the injury period has been compared with the landed value:

Particulars Units 2016-17 2017-18 2018-19 POI
Selling price Rs./MT *** *** *** ***
Indexed 100 103 114 105
Cost of sales Rs./MT *** *** *** ***
Indexed 100 107 121 112
Landed Price Rs./MT 99,663 1,09,209 1,36,126 1,26,906
Indexed 100 110 137 127

99. It is seen that the landed price has remained below the selling price of the domestic industry throughout the injury period. Landed price has been below the cost of sales throughout the injury period, except during POI when it was marginally higher than cost of sales. Over the injury period, the cost of sales of the domestic industry has increased by 12%, whereas selling price has increased by 5%.

iii. Impact on Economic Parameters of the Domestic Industry

100. Annexure II to the Rules requires that the determination of injury shall involve an objective examination of the consequent impact of dumped imports on domestic producers of such products. With regard to consequent impact of dumped imports on domestic producers of such products, the Rules further provide that the examination of the impact of the dumped imports on the domestic industry should include an objective and unbiased evaluation of all relevant economic factors and indices having a bearing on the state of the industry, including actual and potential decline in sales, profits, output, market share, productivity, return on investments or utilization of capacity; factors affecting domestic prices, the magnitude of the margin of dumping; actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital investments. Various injury parameters relating to the domestic industry are discussed herein below.

iv. Production, Capacity, Capacity Utilisation and Sales Volumes

101. The performance of the domestic industry with regard to production, domestic sales, capacity and capacity utilization is as follows:

Particulars Units 2016-17 2017-18 2018-19 POI
Capacity MT 66,993 68,425 75,831 79,855
Production PUC MT 49,757 49,212 56,250 58,384
Total Production MT 51,447 51,356 58,226 60,042
Capacity utilisation % 77 75 77 75
Domestic Sales MT 47,226 46,978 53,556 57,396
Trend Indexed 100 99 113 122
Export sales MT 2,369 2,094 1,900 777
Trend Indexed 100 88 80 33
Captive consumption MT 253 402 43 0

102. It is noted that:

i. The production and sales of domestic industry have increased over the injury period except during 2017-18.

ii. The capacity of the domestic industry has increased over the injury period.

iii. The capacity utilization of the domestic industry has undergone marginal changes over the injury period.

v. Market Share in Demand

Market share of the alleged dumped imports and domestic industry have been examined as below:

Particulars Units 2016-17 2017-18 2018-19 POI
Subject imports % 16.58% 20.63% 17.02% 18.76%
Other imports % 0.17% 0.22%
Domestic industry % 22.25% 21.16% 23.70% 20.88%
Other producers % 61.18% 58.22% 59.10% 60.14%
Indian industry % 83.42% 79.37% 82.80% 81.01%

104. It is noted that the share of subject imports increased in 2017-18, declined thereafter in 2018-19 and again increased in the period of investigation. By comparison, the market share of the domestic industry and the Indian industry increased in 2018-19 after a dip in 2017-18, but has again declined during the period of investigation.

vi. Inventories

105. Inventory position of the domestic industry over the injury period is given in the table below:

Particulars Units 2016-17 2017-18 2018-19 POI
Opening inventory MT 973 864 628 1,389
Closing inventory MT 864 623 1,399 1,527
Average inventory MT 919 744 1,014 1,458
Capacity MT 66,993 68,425 75,831 79,855

106. It is noted that the average inventory of the domestic industry declined in 2017-18 as compared to the previous year but has increased thereafter.

107. Some interested parties have argued that the increase in inventories must be seen in light of increase in capacity. The Authority notes, the average inventory of the domestic industry has increased at a higher rate than the increase in its capacity. While the capacity of the domestic industry has increased by 19%, the inventory of the domestic industry has increased by 59%.

vii. Profits, Cash Profits and Return on Capital Employed

108. Profits, return on investment and cash profits of the domestic industry over the injury period is given in the table below:

Particulars Units 2016-17 2017-18 2018-19 POI
Cost of sales Rs./MT *** *** *** ***
Indexed 100 107 121 112
Selling price Rs./MT *** *** *** ***
Indexed 100 103 114 105
Profit/(loss) Rs./MT *** *** *** ***
Indexed 100 62 32 33
Profit/(loss) Rs. lacs *** *** *** ***
Indexed 100 62 37 40
Cash profits Rs. lacs *** *** *** ***
Indexed 100 75 60 68
Return on capital employed % *** *** *** ***
Indexed 100 48 40 42

109. It is noted that:

i. The profit per unit of the domestic industry has declined throughout the injury period before increasing marginally in the period of investigation.

ii. The cash profits have also declined over the injury period before increasing marginally in the period of investigation.

iii. The return on capital employed of the domestic industry has declined over the period before increasing marginally in the period of investigation.

viii. Employment, Wages and Productivity

110. The Authority has examined the information relating to employment, wages and productivity, as given below:

Particulars Units 2016-17 2017-18 2018-19 POI
No. of employees No. 3,631 3,841 3,693 3,926
Productivity per day MT/day 138 137 156 162
Productivity per employee MT/No. 14 13 15 15
Wages Rs. lacs *** *** *** ***
Indexed 100 116 136 142

111. It is seen that the number of employees and wages have increased over the injury period. The productivity of the domestic industry has also increased.

ix. Growth

112. The Authority has examined the growth of the domestic industry in the table as given below:

Particulars Units 2017-18 2018-19 POI
Capacity % 2% 11% 5%
Production % -1% 14% 4%
Domestic sales % -1% 14% 7%
Profit/(loss) per unit % -38% -48% 1%
Cash profit % -25% -20% 12%
Return on capital employed % -52% -16% 4%

113. It is seen that the domestic industry has recorded a positive growth in terms volume parameters including capacity, production and domestic sales. The profitability parameters of the domestic industry have improved marginally in the period of investigation as compared to the previous year.

x. Ability to Raise Capital Investment

114. The Authority notes that the domestic industry‘s ability to raise capital investment has not been affected.

xi. Factors Effecting Price

115. With regard to factors affecting prices, the Authority notes that the landed price of imports is below the selling price of the domestic industry. The imports are undercutting the prices of the domestic industry except from Nepal, and have prevented price increases which otherwise would have occurred.

xii. Magnitude of Dumping

116. It is noted that the subject goods are being dumped into India and the dumping margin is positive and significant.

I. MAGNITUDE OF INJURY MARGIN

117. The Authority has determined the NIP for the domestic industry on the basis of principles laid down in the Rules read with Annexure III. The NIP of the product under consideration has been determined by adopting the verified information/data relating to the cost of production for the period of investigation. The NIP has been considered for comparing the landed price from the subject countries for calculating injury margin. For determining the NIP, the best utilisation of the raw materials, utilities and capacities by the domestic industry over the injury period has been considered. It is ensured that no extraordinary or non-recurring expenses were charged to the cost of production. A reasonable return (pre-tax @ 22%) on average capital employed (i.e. average net fixed assets plus average working capital) for the PUC was allowed as pre-tax profit to arrive at the non-injurious price as prescribed in Annexure III of the Rules and being followed.

118. Based on the landed price and non-injurious price determined as above, the injury margin for producers/exporters has been determined by the Authority and the same is provided in the table below:

INJURY MARGIN TABLE

Country Producer / Exporter Non- Injurious Price (US$/MT) Landed Value (US$/MT) Injury
Margin
(US$/MT)
Weighted Average IM% Range

(%)

China PR Fujian Jinlei Textiles Co., Ltd. *** *** *** *** 0-10
Jinzhou Boao Textile Co., Ltd *** *** *** *** 0-10
Jinzhou Haoyu Textile Co., Ltd *** *** *** *** 0-10
Fujian Changle Jinshagang  Textile Corp.Ltd *** *** *** *** 0-10
Other Producers and Exporters *** *** *** *** 0-10
Indonesia PT Sinar Pantja Djaja, INDONESIA *** *** *** *** 0-10
PT. Sri Rejekt Isman Tbk -Sritex *** *** *** *** 0-10
PT. Dasar Rukun *** *** *** *** 0-10
PT  Indo-Rama Synthetics Tbk *** *** *** *** 10-20
PT.Delta Merlin  Sandang Tekstil *** *** *** *** 0-10
PT. Delta Dunia Tekstil, Indonesia *** *** *** *** 0-10
PT. Delta        Dunia Sandang Tekstil *** *** *** *** 0-10
Other Producers
and Exporters
*** *** *** *** 20-30
Nepal Triveni           Spinning Mills Pvt. Ltd. Nepal *** *** *** *** 0-10
Reliance         Spinning Mills Ltd *** *** *** *** (10)-0
Jagdamba       Spinning Mills (P) Ltd *** *** *** *** (10)-0
Other Producers
and Exporters
*** *** *** *** 0-10
Vietnam All Exports *** *** *** *** 10-20

J. NON-ATTRIBUTION ANALYSIS

119. As per the Rules, the Authority, inter alia, is required to examine any known factors other than the dumped imports which at the same time are injuring the domestic industry, 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 and competition between the foreign and domestic producers, developments in technology and the export performance and the productivity of the domestic industry. It has been examined below whether factors other than dumped imports could have contributed to the injury to the domestic industry:

a. Volume and Price of Imports from Third Countries

120. In the present case, countries other than the subject countries, cumulatively account for approximately 1% of total volume of imports in the period of investigation.

b. Contraction in Demand

121. The Authority notes that there is no contraction in demand as the demand of the subject goods in the country has consistently grown throughout the injury period.

c. Development in Technology

122. The Authority notes that the investigation has not shown that there was any significant change in technology which could have caused injury to the domestic industry.

d. Conditions of Competition and Trade Restrictive Practices

123. The Authority notes that the investigation has not shown that conditions of competition or trade restrictive practices are responsible for the claimed injury to the domestic industry.

e. Export Performance of the Domestic Industry

124. The Authority notes that the injury information examined hereinabove relates only to the performance of the domestic industry in terms of its domestic market.

f. Productivity

125. The Authority notes that the productivity of the domestic industry has increased over the injury period.

g. Performance of other products of the company

126. The Authority notes that domestic industry has segregated its performance with respect of different products.
Conclusions on injury and causal link

127. The Authority notes the following

a. There is significant dumping of the subject goods in the Indian market from the subject countries except from Nepal.

b. The imports have increased in absolute terms as well as in relation to production and consumption.

c. Production, sales & capacity of the domestic industry have increased over the injury period.

d. The imports from the subject countries, except from Nepal, are undercutting the prices of the domestic industry.

e. The imports from the subject countries except from Nepal are below the non-injurious price of the domestic industry.

f. The profit per unit, cash profit and return on capital employed of the domestic industry have declined throughout the injury period before increasing marginally in the period of investigation.

K. POST DISCLOSURE COMMENTS

128. The Authority issued a disclosure statement disclosing essential facts of the case and inviting comments from all the interested parties. The post-disclosure submissions have been received from the interested parties. Majority of the issues raised in the post disclosure comments have already been raised earlier and also addressed appropriately. Additional submissions to the extent deemed relevant have been examined as under:

K.1 Submissions of the other interested parties

129. In addition to reiterating their submissions regarding standing, injury and causal link, the other interested parties have submitted as under.

a. The Authority has considered support of all 21 producers, even though some of these support letters were filed only after the hearing, when the interested parties pointed out that there were 239 producers.

b. The test of standing should be satisfied at the stage of initiation, and the scope of the domestic industry cannot be changed during the course of the hearing.

c. The Authority has constructed the export price to arrive at the dumping margin by adjusting the losses claimed by the unrelated traders, which needs to be revisited in the final findings. Export price can be constructed only when it is found to be unreliable due to compensatory arrangement between the producer and importer.

d. Any decline in injury parameters is only in the period of investigation, which is outside the injury analysis period.

e. The selection of domestic industry was done so as to show injury. While the imports have marginally increased, the market share of non-petitioning producers is high.

f. The increase in inventories is miniscule and is not an indicator of injury, as held in Bridge Stone Tyre Manufacturing vs. Designated Authority.

g. The profits, cash profits and return on capital employed show decline because of losses in export sales.

K.2 Submissions of the domestic industry

130. The domestic industry has submitted as under in its comments to the disclosure statement.

a. The essential facts concerning injury and causal link have not been disclosed.

b. As held in China – GOES (US), European Communities – Farmed Salmon (Norway) and by High Court in Nirma Limited Vs. Union of India, the disclosure statement should contain the conclusions of the designated authority on those essential facts which would form the basis for its decision as to whether or not to apply definitive measures. Therefore, the facts with regard to dumping, injury and causal link are required to be disclosed. This is paramount for ensuring the ability of the interested parties to defend their interests.

c. Certain changes have been made in the calculation of the cost of production for the purpose of non-injurious price and the reason for the same is not clear.

d. In case of some of the petitioners, the cost of utilities has been reduced far in excess of normation for best utilization of utilities.

e. The expense which is directly attributable to the subject goods must be accepted for the determination of the cost of production of the subject goods. However, the cost of production is different from that claimed and the reason thereof is not apparent.

f. The manner of disclosure of return on non-injurious price needs to be disclosed.

K.3 Examination by the Authority

131. The Authority notes that some of the submissions by the domestic industry and other interested parties are repetitive in nature. These submissions have already been examined at appropriate places in the final findings. Further, the Authority has examined the additional submissions of the interested parties as under:

132. At the outset, the interested parties have contended that the standing was required to be satisfied at the stage of initiation, and not at the stage of findings. In this regard, the Authority notes that the test of standing was satisfied even at the stage of initiation.

133. The interested parties have claimed that the scope of the product under consideration has been changed during the course of the investigation. However, it is noted that there is no change in the scope of the product under consideration. Yarns coarser than 8s counts and finer than 45s counts and dyed yarns were explicitly excluded from the scope of the product under consideration. Further, the scope of the product under consideration included only single yarn, which implies that two-ply and multi-ply yarn are excluded. Lastly, with regard to sewing threads, the Authority notes that the tariff heading 5509 relates only to ―yarn (other than sewing thread of synthetic staple fibres, not put up for retail sale‖. Therefore, the scope of the product under consideration always excluded, (a) sewing threads, (b) dyed yearn, (c) yarns coarser than 8s counts, (d) yarns finer than 45s counts and (e) two-ply and multi-ply yarns.

134. The producers from China PR have claimed that the loss incurred by the unrelated traders should not have been adjusted in the determination of the export price. In this regard, it is noted that the adjustment for loss incurred by the unrelated trader has been made by the Authority as per its consistent practice and in accordance with Anti-dumping Rules.

135. With regard to the submission that any decline in injury parameters is only in the period of investigation, which is outside the injury analysis period, the Authority notes that the injury analysis period includes the period of investigation. Therefore, any decline in the economic parameters of the domestic industry during the period of investigation indicates injury to the domestic industry.

136. With regard to the submission that the domestic industry has suffered decline in profitability due to losses in export sales, the Authority notes that the performance of the domestic industry as considered by the Designated Authority relates only to the domestic performance of the domestic industry. Therefore, the decline in profitability cannot be attributed to export sales.

L. INDIAN INDUSTRY’S INTEREST

137. The Authority notes that the purpose of anti-dumping duty, in general, is to eliminate injury caused to the domestic industry by the unfair trade practices of dumping so as to establish a situation of open and fair competition in the Indian market, which is in the general interest of the country. Imposition of anti-dumping measures would not restrict imports from the subject countries in any way, and therefore, would not affect the availability of the product to the consumers.

138. Authority issued initiation notification inviting views from all interested parties, including importers, consumers and others. Authority also prescribed a questionnaire for the users/ consumers to provide relevant information with regard to present investigation, including possible effect of anti-dumping duty on their operations. It is noted that none of the users have participated in the investigation. Therefore, with regard to adverse impact, if any, of anti-dumping duty on the user industry could not be quantified. Further, there are a number of domestic producers of the subject goods in the country. The inter-se competition among domestic producers would ensure that the subject goods continue to be available to users at competitive prices.

139. It is recognized that the imposition of anti-dumping duty might affect the price levels of the product manufactured using the subject goods and consequently might have some influence on relative competitiveness of this product. However, fair competition in the Indian market will not be reduced by the anti-dumping measure, particularly when the levy of the anti-dumping duty is restricted to an amount necessary to redress the injury to the domestic industry. On the contrary, imposition of anti­dumping measure would remove the unfair advantages gained by dumping practices, prevent the decline in the performance of the domestic industry and help maintain availability of wider choice to the consumers of the subject goods.

M. CONCLUSION

140. Having regard to the contentions raised, information received, submissions made and facts available before the Authority as recorded in these findings and on the basis of the determination of dumping and consequent injury to the domestic industry made hereinabove, the Authority concludes that:

a.The product under consideration has been exported from subject countries except Nepal at a price below the normal value, thus resulting in dumping.

b. The imports have increased in absolute terms as well as in relation to production and consumption.

c. The imports from the subject countries, except from Nepal, are undercutting the prices of the domestic industry.

d. Landed price of imports from subject countries has been below the cost of sales throughout the injury period, except during POI when it was marginally higher than cost of sales.

e. The imports have suppressed the prices of the domestic industry.

f. The imports from the subject countries except from Nepal are below the non-injurious price of the domestic industry.

g. The profit per unit, cash profit and return on capital employed of the domestic industry have declined throughout the injury period before increasing marginally in the period of investigation.

h. The domestic industry has suffered material injury.

i. There is causal link between dumping of product under consideration from subject countries except Nepal and injury to the domestic industry.

j. The subject goods are manufactured by fragmented industry comprising of a large number of domestic producers in the country. Thus, even after imposition of anti-dumping measure, the inter-se competition among domestic producers would ensure that the subject goods continue to be available to users at competitive prices.

k. The injury margin determined in the present investigation is substantially lower than the dumping margin. Since the duty recommended is based on injury margin as per lesser duty rule, the duty recommended is fairly reasonable and it is not likely to cause any adverse impact on the downstream industry.

N. RECOMMENDATIONS

141. 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 information on the aspects of dumping, injury and causal link thereof in terms of Rules and having established positive dumping margin as well material injury to the domestic industry caused by dumped imports from subject countries except Nepal, the Authority is of the view that imposition of anti-dumping duty is necessary to offset dumping and injury.

142. In view of above, the Authority, in terms of provisions contained in Rule 17(1) (b) read with Rule 4(d) of the Rules, recommends imposition of anti -dumping duty equal to the lesser of margin of dumping and the margin of injury, so as to remove the injury to the domestic industry. The Authority accordingly recommends imposition of anti-dumping duty equal to the amount indicated in Column 7 of the table below on all imports of goods described in Column 3 of the duty table originating in or exported from China PR, Indonesia and Vietnam for a period of five years from the date of notification to be issued in this regard by the Central Government.

143. The landed value of imports for this purpose shall be assessable value as determined by the Customs under Customs Act, 1962 and applicable level of custom duties except duties levied under Section 3, 3A, 8B, 9, 9A of the Customs Tariff Act, 1975.

DUTY TABLE

S.No. Tariff
Heading
Description of goods Country of origin Country
of export
Producer Amount Currency Unit
1 2 3 4 5 6 7 8 9
1 5509 2100 Polyester
SpunYarn*
China PR Any Country including China PR Fujian Jinlei Textile  Co., Ltd. 4 USD MT
2 5509 2100 Polyester
SpunYarn*
China PR Any Country including China PR Jinzhou Boao Textile Co., Ltd 118 USD MT
3 5509  2100 Polyester
SpunYarn*
China PR Any Country including China PR Jinzhou Haoyu Textile Co., Ltd 124 USD MT
4 5509 2100 Polyester
SpunYarn*
China PR Any Country including China PR Fujian Changle Jinshagang Textile Corp.Ltd 63 USD MT
5 5509 2100 Polyester
SpunYarn*
China PR Any Country including China PR Any producer other than at serial numbers 1, 2, 3 and 4 above 124 USD MT
6 5509 2100 Polyester
SpunYarn*
Any
Country
other than
China PR,
Indonesia
and
Vietnam
China PR Any 124 USD MT
7 5509 2100 Polyester
SpunYarn*
Indonesia Any
Country
including
Indonesia
PT Sinar Pantja Djaja, Indonesia 117 USD MT
8 5509 2100 Polyester
SpunYarn*
Indonesia Any
Country
including
Indonesia
PT. Sri

Rejeki Isman Tbk -Sritex

117 USD MT
9 5509 2100 Polyester
SpunYarn*
Indonesia Any
Country
including
Indonesia
PT. Dasar Rukun 117 USD MT
10 5509 2100 Polyester
SpunYarn*
Indonesia Any
Country
including
Indonesia
PT Indo-
Rama
Synthetics
Tbk
65 USD MT
11 5509 2100 Polyester
SpunYarn*
Indonesia Any
Country
including
Indonesia
PT. Delta Merlin Sandang Tekstil 79 USD MT
12 5509 2100 Polyester
SpunYarn*
Indonesia Any
Country
including
Indonesia
PT. Delta
Dunia
Tekstil,
Indonesia
79 USD MT
13 5509

2100

Polyester
SpunYarn*
Indonesia Any
Country
including
Indonesia
PT. Delta
Dunia
Sandang
Tekstil
79 USD MT
14 5509

2100

Polyester
SpunYarn*
Indonesia Any
Country
including
Indonesia
Any producer other than at serial numbers 7, 8, 9, 10, 11, 12, 13 191 USD MT
15 5509

2100

Polyester
SpunYarn*
Any
Country
other than
China PR,
Indonesia
and
Vietnam
Ind-onesia Any 191 USD MT
16 5509

2100

Polyester
SpunYarn*
Vietnam Any Country including Vietnam Any 281 USD MT
17 5509

2100

Polyester
SpunYarn*
Any
Country
other than
China PR,
Ind onesia
and
Vietnam
Vietnam Any 281 USD MT

* single yarn of polyester containing 97% or more by weight of polyester staple fibres, referred to as polyester spun yarn, spun yarn or spun poly, but excluding

i. Dyed polyester yarn, melange polyester yarn or colored polyester yarn; and

ii. Yarns coarser than 8s counts or finer that 45s counts

O. FURTHER PROCEDURE

144. An appeal against the order of the Central Government that may arise out of this recommendation shall lie in accordance with the relevant provisions of the Act.

ANANT SWARUP, Designated Authority

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