MINISTRY OF COMMERCE & INDUSTRY
DIRECTORATE GENERAL  OF ANTI-DUMPING AND ALLIED DUTIES
FINAL FINDINGS NOTIFICATION

New Delhi, the 12^th September, 2001

Subject:- Anti-dumping investigation concerning imports of Analgin originating in or exported from China PR and Taiwan– Final Findings.

No.66/1/2000-DGAD. - The Government of India having regard to the Customs Tariff Act, 1975 as amended in 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, thereof:

A. PROCEDURE

1.0 The procedure described below has been followed with regard to the investigations:

i.    The Designated Authority (hereinafter referred to as Authority), under the Rules,     received written application from M/s Vani Chemicals and Intermediates Ltd., 1-306 & 307, 3^rd Floor, Divyashakti Complex, 7-1-58, Ameerpet, Hyderabad on behalf of the domestic industry, alleging dumping of Analgin originating in or exported from China PR and Taiwan(also herein after referred as subject countries.

ii.    The Authority issued a public notice dated 27^th December, 2000 published in the Gazette of India, Extraordinary, initiating anti-dumping investigations concerning imports of Analgin originating in or exported from China PR and Taiwan, classified under heading 2933.19 of Schedule I of the Customs Tariff Act, 1975.

iii.     The Authority issued a public notice dated 7^th March, 2001 published in the Gazette of India, Extraordinary, the Preliminary Findings and the Corrigendum dated 20^th March,2001;

iv.    The Authority forwarded a copy of the preliminary findings to the known interested parties who were requested to furnish their views, if any, on the preliminary findings within forty days of the date of the letter;

v.    The Authority also forwarded a copy of preliminary findings to the Embassy of China PR and Taipie Economic And Cultural Centre (TECC), New Delhi with a request that exporters and other interested parties may be advised to furnish their views on the preliminary findings.

vi.    The Authority provided an opportunity to all interested parties to present their views orally on 15.6.2001. All parties presenting views orally were requested to file written submissions of the views expressed orally. The parties were advised to collect copies of the views expressed by the opposing parties and offer rebuttals, if any.

vii.    Argument raised by the interested parties before announcing the preliminary findings, which have been brought out in the preliminary findings notified have not been repeated herein for sake of brevity. However, the arguments raised by the interested parties have been considered in the preliminary findings and/or these findings.

viii.    In accordance with Rule 16 of the Rules supra, the essential facts/basis considered for these findings were disclosed to known interested parties and comments received on the same have also been duly considered in these findings.

ix.    Request was made to the Central Board of Excise and Customs (CBEC) to arrange details of imports of Analgin for the past three years, including the period of investigation.

x.    The Authority made available non-confidential version of the evidence presented by various interested parties in the form of a public file kept open for inspection by the interested parties;

xi.    The Authority sought and verified information deemed necessary for the investigation.

xii.    The Authority also conducted cost investigation (based on the information received from the domestic industry) and worked out optimum cost of production / cost to make and sell in India on the basis of Generally Accepted Accounting Principles.

xiii.    The investigations covered the period of 1^st April, 1999 to 30^th September, 2000 (18 months);

xiv.    *** in this notification represents information furnished by an interested party on confidential basis and so considered by the Authority under the Rules;

B Petitioner’s Views

2.1 Petitioners have stated that there is a definite interval between date of notification on commencing the investigation and the date of imposing anti-dumping duties in the form of provisional duties. A lot of material has been imported into the country by a number of importers. The petitioners have requested the Authority to examine the possibility of levying imposition of anti-dumping duties with retrospective effect.

2.2 As in the case of most of the bulk drugs – Analgin also has several names and synonyms and hence a number of unscrupulous importers import the material under one name or other which may not be known to customs official at various ports of countries. They have requested the Authority to kindly examine the scope and possibility of including all the names and synonyms of Analgin in the final notification. They have also requested the possibility of restricting imports to one or two major ports for entry for bulk drug-Analgin into India. They have also requested the Authority to examine to reformulate the present 8 digit ITC HS code/Custom Code number to give a complete picture of imported material Analgin.

C. Views of the Exporters, Importers & Other Interested Parties:

Taipie Economic And Cultural Centre( TECC), New Delhi

3.1.1 They have stated that the two Taiwanese companies, mentioned by the petitioner, have denied export of Analgin to India;

3.1.2 According to Import-Export Statistics of Director General Customs in Taiwan, there is no record of export of Analgin to India during the investigation period;

3.1.3 TECC has clarified that Taiwan (ROC) is a different country from China (PRC) and has independent entity;

Exporters

3.2 China National Chemical Construction Corporation , China

They have stated that it does not have any records of having exported Analgin to India from the year 1998 to 2000

Importers

3.3 M/s. Ajanta Pharma Ltd.,New Delhi:

They have furnished some information in the prescribed proforma.

3.4 M/s. Alpex Pharma Chem., Ahmedabad:

They have stated that they have never imported Analgin from China or Taiwan. In the circumstances, they have stated that there is no need for them to participate in the investigation.

D Examination of the issues Raised:-

4.0 The foregoing submissions made by the petitioner, exporters, importers and other interested parties, to the extent these are relevant as per Rules and to the extent these have a bearing upon the case, have been examined and considered and have been dealt with at appropriate places in these findings.

E Product under consideration:

5.1 The product under consideration in the petition is Analgin originating in or exported from China PR and Taiwan. The product is classified under Customs Tariff heading 2933.1907. The classification is, however, indicative only and in no way binding on the present investigations. Analgin is a white crystalline powder with scarcely perceptible yellowish tinge. It is an anti-inflammatory and anti-pyretic drug used in analgesic and anti-pyretic purpose.

5.2 Petitioners have reiterated that the product under consideration is Analgin and it is known by several names and synonyms. They have quoted ‘Merck Index’ and requested that the product under consideration may be well defined in the notification so that the duty is not circumvented by change of name of the product.

5.3 Examination by the Authority

As regards to several names and synonyms of Analgin, the issue was referred to Directorate General of Health Services, Government of India for their comments. The Deputy Drugs Controller (India), CDSCO West Zone, Mumbai has clarified that the most commonly used synonyms of Analgin are Dipyrone, Metamizole, Methampyrone as described under entry number "3369 of MERCK INDEX " and the Authority relies on the same.

F Like Article:

6.1 Definition of Like Article states as under:

"Like Article means an article which is identical or alike in all respects to the article under investigation for being dumped in India or in the absence of such article, another article which although not alike in all respects, has characteristics closely resembling those of the articles under investigation."

6.2 The Authority finds that Analgin produced by the petitioners and the subject product imported from China PR & Taiwan are comparable in terms of characteristics such as physical and chemical characteristics, manufacturing process and technology, function and uses, products specifications etc. The two are technically and commercially substitutable.

6.3 There have been no arguments on this issue by any of the Interested party participating in this investigation.

6.4 In light of the foregoing, Authority concludes that Analgin produced by the petitioner is a Like Article to the Analgin imported from China PR and Taiwan.

G   Domestic Industry:

7.1 The petition has been filed by M/s. Vani Chemicals & Intermediates Ltd.,Hyderabad on behalf of domestic industry. There were more than 15 producers of Analgin in India about 2-3 years back. However, except Vani Chemicals, all of them have either suspended their production or completely closed their operations relating to Analgin due to unviable operation. The petitioner is the only producer of Analgin in India. The company thus accounts for 100% of Indian production of Analgin. The petitioner thus satisfies the standing to file the present petition and constitutes domestic industry under the Rules.

7.2 There have been no arguments on this issue by any of the interested parties participating in this investigation.

7.3 In light of the foregoing, the Authority concludes that the petitioner has the standing to file the petition on behalf of the domestic industry under the rules.

H Dumping:

8.0 Under Section 9A (1)(c), normal value in relation to an article means:

(i) "the comparable price, in the ordinary course of trade, for the like article when meant 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 mark 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 or 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 a  alongwith 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 transshipped 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 or origin".

8.1 None of the exporters from subject countries have responded to this investigation. In the circumstances, Authority has treated all exporters from subject countries as non-cooperative exporters for the purpose of this investigation.

8.2 Normal Value:- The petitioner claims that it is not feasible for them to obtain normal value prevailing in China PR and Taiwan in view of the market condition in those countries. The normal value has been constructed on the basis of cost of production of subject goods duly adjusted to include selling, general and administrative expanses and a reasonable profit margin.

8.3 Export Price: The petitioners have provided the export price as per the Director General of Commercial Intelligence and Statistics (DGCI&S), Calcutta for the period 1998-99 and also for the period April,99 to September,2000 , and claimed export price accordingly. The petitioners have indicated following adjustments to the CIF prices to arrive at the ex-factory export price i.e. Ocean Freight , Marine Insurance, Commission, Inland transportation, and Port handling charges.

8.4 The Authority proposes to rely upon the DGCI&S import statistics for the period of investigation after being satisfied with the receipt of corroborative evidence from other Government sources with respect to imports from Taiwan.

8.5 Dumping Margin:

Considering the normal value and export price as discussed above, the dumping margin as assessed would be as under :

8.6 COMPARISON: For the purpose of fair comparison the Authority has assessed normal value and export price at ex-factory level based on the information furnished by interested parties and best available information on record;

I Injury and Causal Link

9.0 Under Rule 11 supra, Annexure-II, When a finding of injury is arrived at, such finding shall involve determination of the 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 with 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;

Rule (iii) of the Annexure II to the Rules requires that in case 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. Such assessment can be, however, made only if it is determined that:

a)the margin of dumping in relation to the imports from each country is more than two percent expressed as percentage of export price and the volume of the imports from each country is three percent of the import of the like article in India, and
b)the cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic article.

9.1 The Authority notes that the margin of dumping and quantum of imports from subject country are more than the limits prescribed above. Cumulative assessment of the effects of imports is appropriate since the export prices from the subject country were directly competing with the prices offered by the domestic industry in the Indian market.

9.2 For the examination of the impact of imports on the domestic industry in India, the Authority has considered such further indices having a bearing on the state of the industry such as quantum of imports production, capacity utilisation , sales quantum, stock market share, profitability, the magnitude and margin of dumping etc. in accordance with Annexure II( iv) of the rules supra.

@ includes production of other producer

It is evident from the above table that the imports from ChinaPRand Taiwan have increased in absolute terms from 58000 kgs. during 1997-98 to 236434 kgs. in POI (annualized). The market share of import from China PR and Taiwan in the total demand in India, which was as low as 23.66% in 1997-98 registered an increase and stood at 66.9% during POI. The market share of domestic industry, which was 73.85% in 1997-98 declined to 33.1% in the period of investigation.

9.3 Production & Capacity Utilisation of petitioner:

Though the production and capacity utilisation of the petitioner has increased in 98-99 and 99-00, the same is a result of dedicated efforts by the company. The increase in production, capacity utilisation and sales by the petitioner, the company was not able to earn reasonable profits. Further, the production has fallen very drastically in the year 2000-2001.

9.4 Sales Volume:

The sales volume of the petitioner has increased as a result of suspension of the production by a number of other producers in the country.

9.5 STOCKS

The stocks of Analgin with the petitioner has increased significantly over the period as is evident form the table below:

9.6 Selling Price and Price Undercutting:

The selling price of petitioner, Drug Price Control Order (DPCO) price and landed price of imports have been as under:

It is noted that the petitioner could increase the selling price of Analgin as result of increase in the notified price under DPCO. The price notified earlier under DPCO was on significantly lower side with the follow-up action, there was upward revision of prices. Further, it is noted that the landed price of imports have all along been lower than the notified prices. The imports are thus severely undercutting the prices in the domestic market.

9.7. Employment:

It is noted that there is no significant change in the employment levels in line with the company’s policy to retain its people even in tough bad periods. However, a number of other Analgin producers in the country have suspended their production, which has resulted in direct loss of employment to the industry as a whole.

9.8 Profitability:

Though the selling prices has increased, the cost of production has also increased. Further, the increase in the selling prices is a result of upward revision of DPCO notified prices. However, the petitioner is not able to earn any profits. Further, the petitioner is finding it extremely difficult to sell the material at the notified prices in the view of the dumped imports, which are available at prices significantly below notified prices under DPCO. The import price in the current year have declined further, which has resulted in further pressure on prices and the petitioner is finding it difficult to sell the product.

9.9 Imports from other countries is below de-minimus limits. Imports from other countries is, therefore, not causing injury to the domestic industry.

9.10. The demand of Analgin has increased between 1998-99 and 1999-2000, even though it has declined as compared to 1997-98. However, assuming that the demand has declined, it is evident from the rising imports and falling sales of the petitioner that the exporters from subject countries have been able to manage higher market share in the "declined’ demand. The imports have caused further contraction in the market for the Indian industry, thus evidencing causal link between dumping and injury.

9.11 Reduction in the prices by the Chinese and Taiwanese producers/exporters is the sole cause for the injury to the domestic industry. There is no other factor such as trade restrictive practices or export performance, which has caused injury to the domestic industry

10.0 Conclusion:

The Authority thus observe that:

-The imports from China PR & Taiwan have increased in absolute terms.
-Most of the imports are only from the subject countries during period of investigation and previous year;
-The exports price from the subject countries has declined significantly;
-The landed price of imports from the subject countries is below the selling price of the domestic industry, resulting in severe price undercutting;
- The market share of imported goods from China PR & Taiwan has gone up whereas the share of petitioner in total demand has come down.
- Injury to domestic industry has been caused by dumped imports.

11.0 The Authority, after considering the above, concludes the domestic industry has suffered material injury from the imports of Analgin originating in or exported from China PR & Taiwan.

12.0 Indian Industry’s Interest and other issues:

12.1 The purpose of anti dumping duties, in general, is to eliminate dumping which is causing injury to the petitioners and to re-establish a situation of open and fair competition in the Indian market, which is in the general interest of the country.

12.2 It is recognised that the imposition of anti dumping duties might affect the price levels of the products manufactured using the subject goods and consequently might have some influence on relative competitiveness of these products. However, fair competition on the Indian market will not be reduced by the anti-dumping measures, particularly if 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 anti-dumping measures would remove the unfair advantages gained by dumping practices, would prevent the decline of the domestic industry and help maintain availability of wider choice to the consumers of Analgin. 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.

12.3 To ascertain the extent of anti-dumping duty necessary to remove the injury to the domestic industry, the Authority relied upon reasonable selling prices of Analgin in India for the domestic industry, by considering the optimum cost of production at optimum level of capacity utilisation for the domestic industry.

13.0 Landed Value:

The landed value of imports from China PR & Taiwan have been determined on the basis of weighted average export price of Analgin from China PR and Taiwan, after adding the prevailing level of customs duties and one percent landing charges.

14.0 CONCLUSIONS;

   The Authority, after considering the foregoing, concludes that:-

-    Analgin and most commonly used synonyms of Analgin like Dipyrone, Metamizole, Methampyrone, originating in or exported from China PR & Taiwan has been exported to India below normal value resulting in dumping;

-    The domestic industry has suffered material injury;

-    The injury has been caused cumulatively by the imports from the subject countries;

15.1 The Authority considered to recommend the amount of anti-dumping duty equal to the margin of dumping or less, which if levied, would remove the injury to the domestic industry. The weighted average landed price of the imports, for the purpose, was compared with the fair selling price of the domestic industry determined for period of investigation. Wherever the difference is lower than the dumping margin, determined as detailed herein above, a duty lower than the dumping margin is recommended.

15.2 Accordingly, the Authority confirms the preliminary findings with regard to imposition of anti-dumping duties, and recommends imposition of definitive anti-dumping duties, as set out below, from the date of notification to be issued in this regard by the Central Government, on all imports of Analgin and most commonly used synonyms of Analgin like Dipyrone, Metamizole, Methampyrone, as described under entry number "3369 of MERCK INDEX" (also referred as subject goods), originating in or exported from China PR and Taiwan. The Anti-dumping Duty shall be the amount mentioned in column (3) below in US $ / Kg, on all imports of subject goods originating in or exported from subject countries falling under Chapter 29 of the Customs Tariff Act, 1975.

16.0 Landed value of imports for the purpose shall be the assessable value as determined by the customs under the Customs Act, 1962 and all duties of customs except duties levied under Section 3, 3A, 8B and 9, 9A of the Customs Tariff Act, 1975.

17.0 Subject to above, the Authority confirms the preliminary findings dated 7^th March,2001 and the Corrigendum dated 20^th March, 2001.

18.0 An appeal against this order shall lie to the Custom, Excise & Gold (Control) Appellate Tribunal in accordance with the Act supra.

( L V SAPTHARISHI)
Designated Authority

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