DG Safeguards Slaps 55% Duty on Sodium Citrate from China

[Ref: F.No. D-22011/20/2013 Dated 16.09.2014]

Subject:-Safeguard investigation concerning imports of Sodium Citrate – Final Findings

We are giving below the concluding portion and recommendation of the Findings. [Full Text of the Findings available at www.worldtradescanner.com]

Conclusion:

On the basis of above examination and analysis done, it is concluded that:-

a. There has been a significant increase in imports of Sodium Citrate, the Product Under Consideration (PUC) in absolute terms as well as in relation to domestic production over the entire Period of Investigation (POI). Thus, it can be concluded that there is a significant surge in imports of PUC so as to cause or threaten to cause serious injury. This surge in imports is also quite significant in relation to total demand as well.

b. The Domestic Industry has been able to demonstrate that the developments in the market for surge in imports of the Product under Consideration were unforeseen, especially with regards to China PR (82% of total imports).

c. The investigation has shown that the domestic industry has suffered serious injury, considering overall performance, on the basis of listed economic parameters, i.e., market share, sales, capacity utilization, production and productivity in 2013-14 as compared from 2012-13. However, profitability has steeply declined from the base year till 2013-14. Though employment has increased, the productivity per employee has severely declined from base year till 2013-14 and the inventory has risen steadily till 2013-14 from the base year. The Domestic Industry has been able to demonstrate serious injury caused in the form of mounting losses and accumulated inventories by way of declining sales even when demand for the PUC rose in the country. It is also seen that the growth in production of the domestic industry is far lower than the growth in demand for the product under consideration in the Country and the domestic industry has significant unutilised capacities. This has caused significant overall impairment to the position of the domestic industry. Moreover, the market share of DI has declined in 2013-14 as compared to 2012-13 with a corresponding rise in the market share of imports in the same period. It establishes the causal link between the rise in imports and serious injury caused to the Domestic Industry during the POI.

d. It is also seen that the Domestic Industry has sought protection in the form of Safeguard Duty for a period of 4 years, for which they have provided an adjustment plan. The adjustment plan is also found to be reasonable. The contention of the Domestic Industry that they have already expanded their capacity and they along with other domestic producers are fully capable to cater to the demand of the product under consideration in the domestic market appears acceptable.

e. The Domestic Industry has also been able to show that imposition of safeguard duty in this case would be in Public Interest because the probable impact of the safeguard duty on end users/consumers would be minimal. It is also found that no Interested Party has refuted or disputed this aspect during the course of investigation.

Recommendations:

a. Increased imports of Sodium Citrate into India have therefore, caused and threaten to cause serious injury to the domestic producers of Sodium Citrate and it will be in the public interest to impose safeguard duty on imports of Sodium Citrate into India, in terms of Rule 12 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules 1997, for a period of 3(Three) years. Considering the average cost of sales of Sodium Citrate by the domestic producer, after allowing a reasonable return on capital employed, safeguard duty, which is considered to be the minimum required to protect the interest of Domestic Industry, is hereby recommended to be imposed on imports of Sodium Citrate falling under Custom Tariff Heading 29181520 of the First Schedule to the Customs Tariff Act, 1975 (HS code is only indicative and the product description shall prevail in all circumstances) as shown below:-

Period	Rate of Safeguard Duty
First year	55 % ad valorem
Second year	50 % ad valorem
Third year	40 % ad valorem

b. As the imports from developing nations except China PR do not exceed 3% individually and 9% collectively, the import of product under consideration originating from developing nations except China PR may not attract Safeguard Duty in terms of proviso to Section 8B of the Customs Tariff Act, 1975.