DGAD Initiates Investigation on Chinese Mulberry Raw Silk of 3A Grade and below on Complaint of Central Silk Board on behalf of Domestic Producers

[Anti-dumping Initiation Notification F.No.14/17/2014-DGAD dated 9th December 2014]

Subject: Initiation of investigation for imposition of anti-dumping duty on imports of Mulberry Raw Silk originating in or exported from China PR.

The anti-dumping duty on silk yarn from China was revised once again with Fresh investigation was launched on 9 December 2014. This time all grades upto 3A are covered as against 2A in the previous dispensation. It may be recalled that the anti-dumping duty on the item was first put on 10 July 2003 and continued in review on 5 January, 2009. The current initiation may well continue the duty after the expiry of the review of 5 January 2014 this year. Thus silk yarn will be under anti-dumping for 15 years minimum!

Silk fabric from China are also under anti-dumping lens from 26 December 2006 which will continue till 12 January 2017 when the current notification expires.

There is a big market for smuggled silk yarn and fabrics due to the anti-dumping duty. The downstream industry of garments and sarees is not able to develop due to the closure of the import window not only from China but other countries also. It is very difficult to establish whether the import source is from country other than China to avoid the duty.

The second largest producer in the world is not able to make a dent in the world market due to the anti-dumping duty and high customs duty.

It is also unfortunate that the Central Silk Board which a government body representing both domestic producers and users is taking up the case for Anti-dumping. The Silk Associations should come together and form their own body to take up the matter with the DGAD. – Ed –

M/s Central Silk Board (hereinafter also referred to as the Petitioner or applicant) has filed an application before the Designated Authority (hereinafter also referred to as the Authority) in accordance with the Customs Tariff Act, 1975 as amended from time to time (hereinafter also referred to as the Act) and the Customs 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) for initiation of anti-dumping investigation and imposition of anti dumping duty on the imports of Mulberry Raw Silk (not thrown) of 3A grade and below (hereinafter also referred to as the subject goods or PUC) , originating in or exported from China PR (hereinafter also referred to as the subject country).

Product under consideration

2.    The product under consideration for the purpose of subject investigation is ‘Mulberry Raw Silk (not thrown) of 3A grade and below’. Raw silk is woven into textiles. The silk is obtained from the cocoons of the larvae of the mulberry silkworm Bombyx mori reared in captivity (sericulture). The silk is a protein fibre composed mainly of fibroin and produced by the insect larvae to form cocoons. The shimmering appearance of silk is due to the triangular prism-like structure of the silk fibre, which allows silk cloth to refract incoming light at different angles, thus producing different colors. Silks are produced by several other insects, but generally only the silk of moth caterpillars has been used for textile manufacturing. Domestic industry has submitted that there are no mandatory specifications or standards. However, the grading system is described in the standard manual of Raw Silk Testing & Classification of the International Silk Association (ISA) and is universally accepted

The subject goods are classified under Chapter 50 of the Customs Tariff Act, 1975 and further under 5002.00.10 as per International Trade Classification. The classification, however, is only indicative and in no way binding on the scope of the present investigation.

Like Article

4.    The petitioner has submitted that Mulberry Raw Silk (not thrown) of 3A grade and below, which is exported from China PR into India, are identical to the goods produced by the domestic industry. Mulberry Raw Silk (not thrown) of 3A grade and below produced by the domestic industry and imported from China PR is comparable in terms of essential product characteristics such as physical & chemical characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution & marketing etc. Consumers can use and are using the two interchangeably. The two are technically and commercially substitutable and hence should be treated as ‘like article’ under the Rules. Therefore, for the purpose of the present investigation, the subject goods produced by the applicant in India are being treated as ‘Like Article’ to the subject goods being imported from the subject country.

Domestic Industry & Standing

5.    Central Silk Board has submitted an application on behalf of the domestic producers/reelers through their nine associations/societies in the States of Karnataka, Tamil Nadu and Andhra Pradesh for imposing antidumping duty on imports of Mulberry Raw Silk (not thrown) of 3A grade and below. The associations / societies have duly authorized CSB (applicant) to file the present application for initiation of the anti-dumping investigation. These associations/ societies have been authorized by their constituent members who are the producers/reelers.

The petitioner has certified that there are no imports of the product under consideration by the petitioner or any of its related party from the subject countries. Since the production of the petitioner accounts for “a major proportion” in the total production of the product under consideration in India, the petitioner satisfies the standing and constitutes Domestic Industry within the meaning of the Rules.

Countries involved

6.    The present investigation is in respect of alleged dumping of the product under consideration from China PR.

Normal Value

7.    The petitioner has claimed that China PR should be treated as a non-market economy and has determined normal value in accordance with Para 7 and 8 of Annexure I of the Rules. In view of the non-market economy presumption and subject to rebuttal of the same by the responding exporters, normal value of the subject goods in China PR has been estimated in terms of Para 7 of Annexure I to the Rules. The applicant has determined the normal value based on cost of production in India, duly adjusted with selling, general and administrative expenses and reasonable profit.

Export Price

8.    The applicant has determined the export price on the basis of data published by IBIS. Price adjustments have been claimed on account of commission, ocean freight, port expenses, inland freight, marine insurance, and bank charges.

Dumping Margin

9.    The normal value and the export price have been compared at ex-factory level, which show significant dumping margin in respect of the subject country. There is sufficient prima facie evidence that the normal value of the subject goods in the subject country is significantly higher than the ex-factory export price, indicating, prima facie, that the subject goods are being dumped into the Indian market by the exporters from the subject country.

Injury and Causal Link

10.  The applicant has claimed that domestic industry has suffered material injury from dumped imports. The demand for the product under consideration has increased over the injury period and subject imports have increased in absolute terms. The imports are undercutting the domestic prices. The imports have suppressed/depressed the domestic prices over the injury period. With regard to consequent impact of the imports on the domestic industry, it is noted that performance of the domestic industry has deteriorated in respect of parameters such as profits; return on capital employed and cash profits. The domestic industry is suffering significant financial losses, cash losses and negative return on investments. There is sufficient prima facie evidence of injury to the domestic industry caused by dumped imports from subject country to justify initiation of an anti-dumping investigation.

11.  And whereas, the Authority prima facie finds that sufficient evidence of dumping of the subject goods, originating in or exported from the subject country; injury to the domestic industry and causal link between the alleged dumping and injury exist to justify initiation of an anti-dumping investigation, the Authority hereby initiates an investigation into the alleged dumping, and consequent injury to the domestic industry in terms of Para 5 of the Rules, to determine the existence, degree and effect of alleged dumping and to recommend the amount of antidumping duty, which if levied, would be adequate to remove the ‘injury’ to the domestic industry.

Period of Investigation (POI)

12.  The period of investigation (POI) is from 1st April 2013 to 30th June 2014 (15 months). However, for the purpose of analyzing injury, the data of previous three years, i.e. Apr’10-Mar’11, Apr’11-Mar’12, Apr’12-Mar’13 and the period of investigation will be considered.

Submission of Information

13.  The exporters in the subject country, their government through their Embassy in India, the importers and users in India known to be concerned and the domestic industry are being addressed separately to submit relevant information in the form and manner prescribed and to make their views known to the Authority at the following address:

The Designated Authority

Directorate General of Anti-Dumping & Allied Duties

Department of Commerce,

Jeevan Tara Building, 4th Floor

5, Parliament Street

New Delhi -110001

14.  Any other interested party may also make its submissions relevant to the investigation in the prescribed form and manner within the time limit set out below. Any party making any confidential submission before the Authority is required to make a non-confidential version of the same available to the other parties.

Time Limit

15.  Any information relating to the present investigation should be sent in writing so as to reach the Authority at the address mentioned above not later than forty days (40 days) from the date of publication of this Notification. If no information is received within the prescribed time limit or the information received is incomplete, the Authority may record its findings on the basis of the facts available on record in accordance with the AD Rules.

16.  All the interested parties are hereby advised to intimate their interest (including the nature of interest) in the instant matter and file their questionnaire responses and offer their comments to the domestic industry’s application within forty days (40 days) from the date of publication of this Notification. The information must be submitted in hard copies as well as soft copies.

Submission of information on confidential basis

17.  The parties making any submission (including Appendices/Annexure attached thereto), before the authority including questionnaire response, are required to file the same in two separate sets, in case "confidentiality" is claimed on any part thereof:-

(a) one set marked as Confidential (with title, number of pages, index, etc.), and

(b) the other set marked as Non-Confidential (with title, number of pages, index, etc.).

18.  The “confidential” or “non-confidential” submissions must be clearly marked as “confidential” or “non-confidential” at the top of each page. Any submission made without such marking shall be treated as non-confidential by the Authority and the Authority shall be at liberty to allow the other interested parties to inspect such submissions. Soft copies of both the versions will also be required to be submitted, along with the hard copies, in two (2) sets of each.

19.  The confidential version shall contain all information which are by nature confidential and/or other information which the supplier of such information claims as confidential. The information which is claimed to be confidential by nature or the information on which confidentiality is claimed because of other reasons, the supplier of the information is required to provide a good cause statement along with the supplied information as to why such information can not be disclosed.

20.  The non-confidential version is required to be a replica of the confidential version with the confidential information preferably indexed or blanked out (in case indexation is not feasible) and summarized depending upon the information on which confidentiality is claimed. The non-confidential summary must be in sufficient detail to permit a reasonable understanding of the substance of the information furnished on confidential basis. However, in exceptional circumstances, party submitting the confidential information may indicate that such information is not susceptible to summary, and a statement of reasons why summarization is not possible, must be provided to the satisfaction of the Authority.

21.  The Authority may accept or reject the request for confidentiality on examination of the nature of the information submitted. If the Authority is satisfied that the request for confidentiality is not warranted or if the supplier of the information is either unwilling to make the information public or to authorize its disclosure in generalized or summary form, it may disregard such information.

22.  Any submission made without a meaningful non-confidential version thereof or without a good cause statement on the confidentiality claim shall not be taken on record by the Authority.

23.  The Authority on being satisfied and accepting the need for confidentiality of the information provided, shall not disclose it to any party without specific authorization of the party providing such information.

Inspection of Public File

24.  In terms of Rule 6(7) of the AD Rules, any interested party may inspect the public file containing non-confidential version of the evidence submitted by other interested parties.

Non-cooperation

25.  In case where an interested party refuses access to, or otherwise does not provide necessary information within a reasonable period, or significantly impedes the investigation, the Authority may record its findings on the basis of the facts available to it and make such recommendations to the Central Government as deemed fit.