REGD NO D, L.-33004/99 The Gazette of India
EXTRAORDINARY
PART II—Section 3—Sub-scction (i)
PUBLISHED BY AUTHORITY
No. 406] NEW DELHI, THURSDAY, AUGUST 29, 2002/BHADRA 7,1924
(1)
2733 GI/ 2002 2 THE GAZETTE Of INDIA • EXTRAORDINARY- [P^i II—Si-- 3(i)] 3 4 ___ THE GAZETTE OF INDIA: EXTRAORDINARY [PART II—She. 3(i)j 5 OFFICE OF THE DIRECTOR GENERAL (SPECIFIC SAFEGUARDS)
NOTIFICATION
New Delhi, the 13th August, 2002
Notice of Initiation of a Safeguard Investigation
{Under Rule 6 of the Customs Tariff (Transitional Product
Specific Safeguard Duty) Rules, 2002}
Subject: Initiation of Safeguard Investigation concerning Imports of
Industrial Sewing Machine Needles (ISMN) Into India
originating from the Peoples Republic of China.
G.S.R. 611(E).—An application" has been filed before me under Rule 5 of the Customs Tariff (Transitional Product Specific Safeguard Duty) Rules, 2002 by M/s.' Altek Lammertz Needles Ltd., Chennai (hereafter referred to as Altek) for imposition of safeguard duty on imports of ISMN into India from the Peoples Republic of China to protect the domestic producers of ISMN against market disruption caused by the increased imports of ISMN into India.
2. Domestic Industry
The application has been filed by Altek on behalf of the domestic producers of ISMN for imposition of safeguard duty on imports of ISMN. Though there are three other companies reportedly producing ISMN, Altek accounts for the major production and sale of ISMN.
3. Product Involved
The applicants have alleged market disruption caused to the domestic producers by the increased imports of ISMN originating from PR China into India. ISMN is classified under sub-heading No.8452.30 of the First Schedule to the Customs Tariff Act 1975 and under 84523000 of the Indian Trade Classification (ITC). The process of manufacturing ISMN involves more than hundred steps before emerging as a finished needle. Needle making is a combination of precision engineering, chemical engineering and metallurgy. The raw material i.e.
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T HE G A Z E T TE OF I N D IA : E X T R A O R D I N A RY •
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4. Increased Imports
ISMN is imported into India mainly from the Peoples Republic of China, Germany, Japan, Korea (RP), Singapore and Taiwan (Chinese Taipei). The imports of ISMN in general from all countries put together increased from 116470 kgs. in 1997-98 to 181981 kgs in 2001-02 (annualised) . The imports of ISMN from the Peoples Republic of China have shown an increase in absolute terms as well as compared to domestic production. The imports and domestic production of ISMN during 1997-98 to 2001-02 have been as under:
| Year | Domestic Production | Imports | Imports | |||||
| China | Others | Total | from China as % of Domestic Production | |||||
| Qty. | Value | Qty. | Value | Qty. Value | ||||
| 1997-98 | 1544 | 53545 | 238.64 | 62925 | 543.95 | 782.59 ^116470 | 3468% | |
| 1998-99 | 3683 | 85818 | 436.09 | 58912 | 746.65 | 1182.74 144730 | 2330% | |
| 1999-00 | 4755 | 79403 | 533.15 | 88830 | 911.38 | 1444.53 168233 | 1670% | |
| 2000-01 | 4353 | 29270 | 190.06 | 65602 | 884.95 | 94872 1075.01 | 672% | |
| 2001-02 | 5351 | 104216 | 696.79 | 77765 | 1346.81 | 181981 2043.60 | 1948% |
5. Market Disruption
The increased imports of ISMN have caused /threatened to cause market disruption to the domestic producers of ISMN as indicated by the following factors:
(a) Prices of ISMN originating from China have been steadily falling. The CIF price of ISMN which was Rs.446/- per kg. in 1997-98 increased to Rs.671/- per kg. in 1999-2000 and declined to Rs.649/- per kg. in 2000-01 and thereafter improved marginally to Rs.669/- per kg, whereas the cri.."js of ISMN originating from other countries have shown an upward trend from Rs 1,210 per kg in 97-98 to Rs 2,425 per kg in 2001-02. To keep up with the decline in prices of ISMN originating from China and to retain their market share, the domestic producer _7 had to reduce their prices of ISMN, as a sequel, their realisation has declined considerably and resulted in loss to the domestic producer. The realisation which was Rs.71407- per kg. in the 1998-99 declined to Rs.5096/- per kg. in 1999-2000 and improved marginally to Rs.5128/- per kg. in 2000-01, thereafter, fell appreciably to Rs.3817/- per kg in 2001-02.
(b) The capacity utilisation of domestic producer which was 57% in 1998-99 declined to 5 1% in 1999-2000, increased to 58% in 2000-01 and registered a decline of 13% in 2001-02 which is at 45% .
(c) While the market share of domestic producer of ISMN, considering the imports emanating from all countries, improved from 1.14% in 1997-98 to about 3% in 2000-01 in the total domestic consumption of ISMN, fell to 2.48% in 2001- 02, but the injury suffered by the domestic producer by way of loss of market share was around 5% considering the imports emanating from the Peoples Republic of China during the said period as would be indicated in the table below. The domestic producers have been able to retain even this reduced market share only at the cost of reduction of their sales price.
| Year | Domestic sales | Total Domestic consumption (imports from the Peoples Republic of China and domestic sales) | Share of domestic Sales to domestic consumption (2/3x100%) | Total Domestic consumption (imports from all countries and domestic sales) | Share of domestic Sales to domestic consumption (5/6x100%) |
| (D 1997-98 1998-99 | (2) | (3) | (4) | (5) | (6) |
| 1348 1621 | , _ 54893 87439 | 2.45% 1.85% | 117818 146351 | 1.14% 1.11% | |
| 99-2000 | 3549 | 82952 | 4.28% | 171782 | 2.07% |
| 2000-01 2001-02 | 2836 4631 | 32106 108847 | 8.83% 4.25% | 97708 186612 | 2.90% 2.48% |
6. The domestic producers have requested for imposition of safeguard duty on imports of ISMN originating from China. They have also requested for an immediate imposition of provisional safeguard duty.
7. The application has been examined and it appears that prima facie increased imports of ISMN from the Peoples Republic of China have caused/threatened to cause market disruption to the domestic producers of ISMN and accordingly it has been decided to initiate an investigation through this notice.
8 THE GAZETTE OF INDIA: EXTRAORDINARY [PART IT—SEC 3(i)| ' 8. All interested parties may make their views known by 23 September 2002 to
The Director General (Specific Safeguards) 5th Floor, Drum Shape Building, I.P.Bhawan, I.P.Estate, New Delhi-1100XD2. India.
9. All known interested parties are also being addressed separately.
10. Any other party to the investigation who wishes to be considered as an interested party may submit its representation so as to reach the Director General (Safeguards) within 21 days from the date of this notice.
[F. No. SSG/INV/1/2002]
R, K. GUPTA, Director General' l'rinted by the Manager. Govt, of India Press, Ring Road, Mayapun, Now Delhi-110064 and Published by the Controller of Publications. Delhi-110054