TMI BlogAnti-dumping investigation concerning import of Vitamin C from China PR & Japan — Preliminary findingsX X X X Extracts X X X X X X X X Extracts X X X X ..... r, decided to initiate investigations against alleged dumped imports originating in or exported from Japan and China (hereinafter referred to as the subject countries). The Authority notified the Embassies of the subject countries on receipt of dumping allegation before proceeding to initiate the investigation in accordance with sub-rule 5(5) of the Rules; d. The Authority issued a public notice dated 26-5-1997, published in the Gazette of India, Extraordinary, initiating anti-dumping investigation concerning imports of Vitamin C, originating in or exported from Japan and China. e. The Authority forwarded copy of the public notice to the known exporters/importers (whose details were made available by the petitioner) and gave them an opportunity to make their views known in willing within forty days, in accordance with the Rule 6(2) ; f. The Authority forwarded copies of the public notice to the known importers of Vitamin C in India and advised them to make their views known in writing within forty days from the date of the letter; g. Request was also made to the Central Board of Excise Customs (CBEC) to arrange copies of all the relevant Bills of Entries for the peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. Merit Organics Ltd., Bombay 18. Mercury Labs Ltd., Bombay 19. Medley Labs, Bombay 20. Medi Pharma Drug House, Bombay 21. Nemi Pharma Pvt. Ltd., Bombay 22. Puja Enterprises, Bombay 23. Pradip Kumar Company, Bombay 24. Pharmaceutical India, Bombay 25. Recon Ltd., Bangalore 26. Remidex Pharma P. Ltd., Bangalore 27. Stride Pharma Ltd., New Bombay 28. Sunways Pvt. Ltd., Bombay 29. Taru Enterprises, Bombay 30. Turakha Bros., Bombay 31. T.H. Thakore Pharma Labs, Bombay 32. Tablets India Ltd., Madras m. Information regarding the domestic industry was sought from the petitioners, M/s. Ambalal Sarabhai Ltd., Baroda and the other non-petitioner M/s. Jayant Vitamins Ltd. Information deemed necessary was verified by the Authority. n. No information was furnished by M/s. Jayant Vitamins Ltd. o. Cost investigations were also conducted for the purpose of Preliminary Findings to work out optimum cost of production and cost to make and sell Vitamin C on the basis of Generally Accepted Accounting Principles (GAAP) and the information furnished by the petitioner so as to ascertain if anti-dumping duty lower than the dumping margin would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than that produced locally; - China has emerged as a largest supplier of Vitamin C in the world market; - In case the domestic industry feels that there is dumping of Vitamin C, they should be in a position to export the material at prices higher than that prevailing in international market, to prove their claim; 2. M/s. Hebei Welcome Pharma Co., China M/s. Hebei Welcome Pharma Co., China have attached some invoices pertaining to exports to India during 1996, duly certified by Indian Embassy in Beijing. They have also stated that the products were exported to India at the same price as that sold in Chinese domestic market. Importers (1) M/s. Dilip Kumar and Company have stated that - M/s. Ambalal Sarabhai are the only manufacturer of Vitamin C in India and their total capacity is less than 20% of total Indian demand. - Huge manufacturing capacities of Vitamin C in Germany, Swiss, Japan China tend to affect the supplies and the international price of the product; - That the Japanese material is costlier compared to prices of Chinese material and they strongly oppose not to enforce any anti-dumping duty on Japanese material. - It is well known fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant in September, 1996 and are non-petitioners. Being the only producer of Vitamin C in the country, the petitioner constitute domestic industry in accordance with Rule 2(b) supra. H. Normal value 8. The Authority had sent the questionnaires to the exporters to furnish information so that Normal Value could be worked. M/s. TCI, Japan have not submitted any information directly on the grounds that TCI has nothing to do with the trade in India. However, M/s. Takeda Vitamin and Food Asia Pte. Ltd., Singapore, (TVFA) the wholly owned subsidiary of TCI, Japan has filed response in capacity of a subsidy company of TCI. The Authority observes that TVFA has submitted information only with regard to domestic market of Singapore and not with respect of Japan. Further, information regarding price structure and sales arrangement has also not been furnished claiming confidentiality of agreement with their contractors. Takeda has also not submitted the cost of production on the grounds that they are traders/exporters and do not manufacture the product themselves. TVFA has submitted some extracts of their P L Account but no financial information of TCI, Japan has been submitted. It may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g. for China. M/s. TVFA has furnished adjustments after FOB price for overseas freight, insurance, shipping charges, handling etc. The Authority has allowed adjustments on the basis of the claims made by TVFA. Similarly, the adjustments in respect of overseas freight (from Xingang to Mumbai), and clearance charge as furnished by the Chinese Exporter have been allowed to work out the FOB price. J. Comparison 10. For the purpose of fair comparison between the normal value and the export price, the Authority took into account the information furnished by the petitioner, exporters, importers and the best information available with the Authority in the absence of complete response in the prescribed form and manner from the exporters. The Authority has compared normal value with weighted export price (both at ex-factory level) for individual exporter and has arrived at the following dumping margins : Rs./kg. Country Dumping Margin (percentage of export price) Japan (All Exporters) 58.10 China (All Exporters) 48.75 K. Injury 11. Under Rule 11 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mport of the product during the year 1996-97 (Annualised) is around 656% in respect of China 19668% in respect of Japan. The above trend would reveal that there is significant increase in the volume of imports from the said countries. The market share of Japan in the total demand in the country increased from 0.08% in 1995-96 to 10.61% during the period of investigation. In case of China, increase was from 6.49% in 1995-96 to 29.41% during the period of investigation. (b) Factors affecting domestic industry (i) Production : Production of the domestic industry during 1994-95 was 1030.6 MT (469 MT of Ambalal Sarabhai Enterprises and 561.6 MT of Jayant Vitamins Ltd.). The production decreased in 1995-96 to 918.4 MT (486 MT in case of Ambalal Sarabhai Enterprises and 432.4 MT in case of Jayant Vitamins Ltd.). The combined production reduced to 496.3 MT during the period of investigation (386 MT in case of Ambalal Sarabhai Enterprises and 110.3 MT in case of Jayant Vitamins Ltd.). Domestic industry lost market share from 91.2% in 1995-96 to about 48% during the period of investigation. M/s. Jayant Vitamins Ltd. was forced to suspend their production activity w.e.f. October ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The imports from the subject countries have increased in absolute terms; ii. The exporters entered into contracts for supplies of Vitamin C at increasingly lower rates for deliveries to be made in the subsequent months. This forced the Indian Industry to drastically cut down their production resulting in increase in cost of production. This has also eroded the profitability of the domestic industry; iii. The imports from the subject countries resulted in price under cutting in the Indian market; iv. Sales of domestic industry declined steeply in the investigation period; v. Stocks of subject goods with the domestic industry increased during the period of investigation; Authority notes that the domestic industry has suffered material injury from imports of Vitamin C originating from the subject countries. Causal link 13. In determining whether material injury to the domestic industry was caused by the dumped imports, the Authority took into account the following facts : (i) The imports of the product from the subject countries increased significantly in absolute terms and relative to the production and consumption of the product in India. The share of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in or exported from Japan and China has been exported to India below its normal value, resulting in dumping; ii. Imports of Vitamin C from these countries have caused material injury to the domestic industry. iii. It was considered whether a duty lower than the dumping margin would be sufficient to remove the injury. The weighted average landed price of the imports for each exporter, for the purpose, was compared with the fair selling price of the domestic industry, determined for the period of investigation. Whenever the difference was less than the dumping margin, a duty lower than the dumping margin is recommended. Accordingly, the Authority recommends that provisional anti-dumping duties, as set out below, be imposed, from the date of notification to be issued in this regard by the Central Government, on all imports of Vitamin C, falling under Customs Tariff Heading 2936.27 of the Customs Tariff Act , originating in or exported from these countries, pending final determination. (Rs. per kg.) Product originating or exported from Amount of duty Japan 27.56 China ..... 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