GOVERNMENT OF INDIA MINISTRY OF COMMERCE

Subject: Anti-dumping investigation concerning imports of Narrow Woven Fabrics originating in or exported from the China PR and Chinese Taipei- Final Findings.

No. 14/24/2003-DGAD - 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;

(i) On 9^th June 2004, the Designated Authority (hereinafter referred to as Authority), under the above Rules, issued a public notice (initiation notification) publicised in the Gazette of India , initiating an anti dumping investigation with regard to imports of narrow woven fabrics originating in or exported from China PR and Chinese Taipei (Also referred to as subject countries). The Anti dumping proceeding was initiated following a complaint received from M/s Sky Industries Ltd, Mumbai (the applicant) on behalf of the domestic industry representing a major proportion of the domestic production of said product. The complaint contained evidence of dumping of the said product and of material injury resulting there from, which was considered sufficient to justify the initiation of the proceedings.

(ii) Before initiation, the Authority notified the Embassies/High Commissions of subject countries in India about the receipt of fully documented petition made by the petitioner before proceeding to initiate the investigation in accordance with sub-rule (5) of Rule 5 supra;

(iii) According to sub rule (2) of the rule 6 supra, the Authority forwarded copy of the said public notice to the known exporting producers, importers, industry associations, embassies of the countries concerned and to the complainant and gave them an opportunity to make their views known in writing.

(iv) According to sub-rule (3) of Rule 6 supra, the Authority provided a copy of the application to all the known exporters and Embassies of subject countries in India. According to sub-rule (4) of Rule 6 supra, the Authority provided a copy of the relevant questionnaire to all the known exporters and Embassies of subject countries in India and other interested parties. The Embassies/High Commissions of subject countries in New Delhi were also informed about the initiation of investigation and requested to advise the exporters/producers from their countries to respond to the questionnaire within the prescribed time

(v) The Authority sent questionnaires, to elicit relevant information, to the following known exporters from subject countries.

(vi) None of the exporters have responded to the exporter’s questionnaire and notice of initiation. None of the importers except M/s Country crafts have responded to the importers questionnaire. However, they have not submitted any non confidential copy of the confidential information to the Authority. The Authority has considered all views expressed and submissions made by various interested parties to the extent they are relevant for the present investigation.

(vii) The Authority kept available non-confidential version of the evidence presented by various interested parties in the form of a public file maintained by the Authority and kept open for inspection by the interested parties;

(viii) **** in this notification represents information furnished by the interested parties on confidential basis and so considered by the Authority under the Rules;

(ix) The investigation of dumping and injury covered the period from 1^st January 2003 to 31^st December 2003 (Also called the period of investigation or POI). The examination of trends in the context of injury analysis covered the period from 1^st April 2000 to the end of period of investigation.

(xi) The preliminary findings were issued on 10^th January 2005 and all the interested parties were requested to submit their comments within a period of 40 days. The Authority also forwarded a copy of preliminary findings to the Embassies of subject countries with a request that exporters and producers in their country may be advised to furnish their views on the preliminary findings.

(x) The Authority provided an opportunity to all interested parties to present their views orally on 2^nd March 2005. 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.

(xi) Arguments 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 after the issuance of the Preliminary findings and disclosure are considered in this final findings.

(xii) In accordance with Rule 16 of rules, the essential facts/ basis considered for these findings were disclosed to known interested parties on 25^th May 2005 and comments received on the same are duly considered in Final Findings.

(xiii) The Authority sought and verified all the information it deemed necessary for the purpose of final determination of dumping and resulting injury. The Authority conducted on the spot investigation of the domestic industry to the extent considered necessary. The cost of the production of the domestic industry was also analysed to work out the best cost of the production and the cost to make and sell the subject goods in India on the basis of Generally Accepted Accounting Principles based on the information furnished by the petitioner so as to ascertain if anti Dumping duty lower than dumping margin would be sufficient to remove injury to the domestic Industry.

2. The Product under consideration in the present investigations is “narrow woven fabric having pile weave, made up of man made fibers, used as a fastening tape” (henceforth also referred to as subject goods). In market parlance, the subject goods are known by various synonyms such as “Hook & Loop Tape Fasteners”, “Velcro Tapes”, “Fastening Tapes”, “Fasteners” etc. The distinguishing feature of the product is “pile weave”. The subject goods are described in terms of Peel Strength, Shear Strength and Light Fastness. Hook and Loop fasteners are generally made from man made fibers (yarns) nylon (Nylon 6 and Nylon 6,6), polyester etc. The product under consideration is produced in sizes typically varying between 12mm to 125mm of width. Further, while the product is sold in the market place in terms of length of the product (measured in meters) and the associated costs and prices of various product types vary with width, the same becomes almost homogenous when converted into weight. The major uses of the subject goods are in industries such as garment industries, surgical & orthopedic apparatus manufacturing, shoes & footwear manufacturing, luggage/bags manufacturing, toys, automobile upholstery and various other industrial segments. Narrow Woven fabric is classified under customs Sub heading 580610 of the Customs Tariff Act 1975. After the provisional findings, M/s Country Craft, importer, asked the Authority to clarify whether the investigation has been performed only on hook and look tape, whereas the notification mentions the entire chapter. The Authority confirms that Anti dumping investigations have been conducted with regard to the product under consideration only as mentioned above (also referred to as subject goods) and as stated in the initiation notification, as well as in the preliminary findings, and the customs classification is indicative in nature and is in no way binding on the scope of the investigation.

3. The petitioner has claimed that goods produced by it are like articles to the goods originating in or exported from subject countries. There is no significant difference in the subject goods produced by the petitioner and those exported from subject countries. Petitioner claims that the two are technically and commercially substitutable.

4. M/s Country Craft has drawn the attention of the authority that subject goods are not homogenous and the raw material used to manufacture the hook and loop tape are differently classified basically in 3 types, i.e polyster, Nylon/polyster and Nylon which means that prices of the inputs and that of the three end products are different and therefore, they have added that one reference type for all different types of product are not correct. The domestic industry has maintained that the basic application of the subject good is in fastening. Hook & Loop can be used in different industry segments. Hook & loop tape used by the garment industry, leather industry and other industries , has the same basic characteristics, is produced using the same raw materials and serves the same general purpose and hence they should be treated as a like article.

5. Rule 2 (d) relating to the definition of like article specifies that like article means an article that is ‘identical’ or ‘alike’ in all respects to the articles under investigation or in the absence of such an article, another article having characteristics closely resembling those of the article under investigation In order to establish that subject goods produced by the domestic industry is a Like Article to that exported from subject countries, characteristics such as technical specifications, manufacturing process, functions and uses and tariff classification have been considered by the Authority. After examining, the Authority concludes that there is a great amount of substitutability between different types of subject goods and different types are produced from the same basic raw materials, production technology and manufacturing process, is employed for the same general purpose (i.e., as fastening tape), falls under the same tariff classification. It is further held that the mere fact that there are a number of different types of the product under consideration produced and sold by every producer does not vitiate the finding that the various types are like articles when these types are produced from the same basic raw materials, production technology and manufacturing process and is employed for the same general purpose (i.e., as fastening tape),.

6. Therefore, the Authority notes that the “Narrow Woven fabrics” manufactured in the subject countries and exported in Indian market and subject goods manufactured by the domestic industry have essentially the same product characteristics, manufacturing process & technology, functions & uses, pricing, distribution & marketing and tariff classification of the goods. The two are technically and commercially substitutable. The Narrow woven fabrics produced by the domestic industry is being treated as like article to the goods being imported from China PR and Taiwan in the present investigation in accordance with the anti dumping rules.

7. There are four producers of domestic like products in India. M/s Sky Industries Ltd., Mumbai, has filed the application. M/s. Magic Fasteners Pvt. Ltd., Delhi and Siddharth Filament Pvt. Ltd and M/s Siddarth Magic Tape Pvt ltd, Surat have supported the application filed by the applicant. These supporting companies some information relating to injury after initiation of investigations. The Authority notes that that production by M/s Sky Industries Ltd., petitioner, constitutes more than 50% of the total domestic production of like article in India.

8. The Authority has determined that (a) production of the petitioner companies constitute a major proportion in Indian production; (b) domestic producers expressly supporting the application account for more than 50 per cent of total production of the like product produced by the domestic industry; and (c) the application has been made by or on behalf of the domestic industry. The Authority after examining the above, determines that the petitioners constitutes a domestic Industry within the meaning of the rule 2(b) read with 2(d) and it satisfies the criteria of standing to file the petition in terms of Rule 5(3) (a) of the Rules supra.

9. However, following the imposition of preliminary anti-dumping duties, the three other producers of subject goods in India i.e M/s. Magic Fasteners Pvt. Ltd., Siddharth Filaments Pvt. Ltd and Siddharth Magic Tape Pvt. Ltd showed their willingness to participate in the investigations and provided substantial information to reach decisions on injury. However, after verification of information filed by these producers, it is found that the information provided two producers did not conform to the form and manner prescribed and could not be adopted for the purpose of determination of injury and therefore the Authority has decided to include M/s Magic Fasteners Pvt Ltd but exclude Siddharth Magic Tape and Siddharth Filaments in the purview of the domestic industry.

10. As regards ascertaining that the imports from the subject countries during the period of investigation (POI) are above de-minimus levels, the Authority has referred to the transaction wise data from the subject countries as made available by DGCIS. After examining the data, The Authority holds that imports from imports from all the subject countries are above de-minimus levels in terms of volume of imports.

11. Under Section 9A(1) I of the Customs Tariff Act 1975, Normal value in relation to an article means:

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

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 market 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:-

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

The cost of production of the said article in the country of origin along with 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 transhipped 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 of origin.

12. The Authority sent questionnaires to all the known exporters for the purpose of determination of normal value in accordance with Section 9A(1)(c). None of the exporters have responded to the initiation and questionnaire in any form and consequently, they have been treated as uncooperative in this investigation.

13. None of the known exporters has responded to the exporters’ questionnaire by giving information with regard to various appendices mentioned in the exporters’ questionnaire.

14. The Authority notes that none of the exporters have submitted any information as required under the exporter’s questionnaire. It is also noted that they have also not supplied any information rebutting the presumptions as mentioned in the 8(3) of the Annexure I of the Anti Dumping Rules pertaining to Non market economy. As no information has been submitted under various Appendixes, the Authority cannot determine whether the domestic sales have been made in the ordinary course of trade..

15. In the absence of relevant information from the exporter, the Authority has constructed the normal value as per para 7 of the Annexure 1 of the AD Rules for all producers/exporters from China PR. Export price at the ex. factory level has been determined by taking weighted average export price to India after taking into account total volume of imports from China PR with adjustments.

16. In accordance with Rule 6(iv) of annexure I to the anti dumping rules, the dumping margin was established on the basis of weighted average normal values with the weighted average export price. The comparison showed the existence of dumping of the subject goods by the exporter during the POI. The weighted average dumping margin, expressed, as a percentage to the export price has been determined and is 355 %.

17. None of the exporters after the initiation has responded to the exporters’ questionnaire by giving information with regard to various appendices mentioned in the exporters’ questionnaire. Subsequent to initiation of the investigations, Taiwanese Economic and Cultural centre on behalf of their government asked the Authority to re ascertain the Chinese Taipei exports to India as their trade statistics did not show any exports to India during the POI. They also requested the Authority to terminate the investigation against Chinese Taipei as no imports have been effected into India from that country. The Authority noted in the preliminary determinations that it had initiated the subject investigation after ascertaining the transaction wise import information from DGCIS. However, after receiving the letter from Chinese Taipei, the Authority ascertained the imports from one of the inland ports of the Delhi (ICD Tughlakabad) by requesting for transaction wise imports from that port of the subject goods originating from Chinese Taipei. After examining the import transactions, it was informed to the Authority that there were substantial number of transactions evidencing imports of subject goods from that country. Accordingly a copy of the import statement evidencing imports from Chinese Taipei along with the names of the exporters and bills of entry numbers with dates were forwarded to the Chinese Taipei Authorities. However, subsequent the public hearing, Economic division of Taiwan Economic and Cultual centre, New Delhi has confirmed they did export the subject goods during the period of investigation to India.

18. The Authority notes that none of the exporters have submitted any information as required under the exporter’s questionnaire. As no information has been submitted under various Appendixes, the Authority can not determine whether the domestic sales have made in the ordinary course of trade. Under the circumstances Normal value under the rules is determined on the basis of facts available as per rules 6 (8).

19. Export price at the ex-factory level has been determined by taking their weighted average export price to India with adjustments.

20. In accordance with Rule 6(iv) of annexure I to the anti dumping rules, the dumping margin was established on the basis of weighted average normal values with the weighted average export price. The comparison showed the existence of dumping of the subject goods by the exporter during the POI. The weighted average dumping margin, expressed, as a percentage to the export price has been determined and is 298%.

21. Annexure II (iii) to the Anti Dumping Rules provide that in case imports of a product from more than one country are being simultaneously subjected to anti dumping investigations, the designated authority will cumulatively assess the effect of such imports, in case it determines that:

(a) the margin of dumping established 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 imports of the like article or where the export of the individual countries less than three percent, the imports cumulatively accounts for more than seven percent of the imports of like article, and;

(b) cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic articles.

i) the margins of dumping from each of the subject country are more than 2% (de-minimus) as may be seen from the earlier paragraphs;

ii) the volume of imports from each of the subject countries is more than the3%;

iii) the domestic like product and product exported from subject countries into India are like articles;

iv) It is noted that imported products and domestic like products are being interchangeably used. Evidence of imports by various parties and correlation of the same with customer wise sales of the domestic industry makes it evident that there are a number of parties who have resorted to purchase from the domestic industry and imports from subject countries. It is further noted that subject goods exported by various countries compete in the same market;

v) The subject goods supplied by various producers are being marketed in India during the same periods through comparable sales channels

vi) Price undercutting is positive and significant in respect of both China PR and Taiwan.

vii) The domestic producer and exporters in the subject countries are selling the product to the same category of consumers.

22. In view of the above, it is held that cumulative assessment of impact of imports on the domestic industry would be appropriate in the present case.

23. For the calculation of the domestic consumption/demand of the product under consideration, the Authority has added the sales volume of the domestic industry to the total imports into India. The Authority has considered data provided by the DGCI&S on transaction to transaction basis. The Authority notes that during the course of investigation, the petitioner has provided a number of bills of entries in respect of imports into India of the subject goods from subject countries. It is found that a number of these imports are not reflected in the transaction wise import data made available by the DGCI&S. It is thus evident that full volume of imports is not reflected in the transaction wise import data. The Authority has added these imports in the import data made available by the DGCI&S, as these import transactions are supported with bills of entry, commercial invoice, packing list, certificate of origin, etc it is seen that the domestic demand or consumption of the subject goods increased significantly as shown in the table below.

24. The Authority notes that demand of the product under consideration has been increasing over the years. . However, sales of the domestic industry showed a sluggish growth and achieved only 25% growth during the injury period. In fact, the sales of the domestic industry declined in the POI as compared to preceding year. At the same time demand of the product showed 80% growth during the same period.

25. The Authority has collected transaction wise import data from DGCI&S over the years and the same along with actual bills of entries not reported in the DGCIS transaction wise data is relied upon to decide the actual volume of subject import into the country. The volume of dumped imports of the product under consideration from China PR, Taiwan and as also from other countries is as given in the table below:

26. The Authority finds that the import volumes from the subject countries increased significantly during the injury period. It can therefore be concluded that there has been steady and significant increase in volume of dumped imports over the period under consideration. Increases in dumped imports have been more than increase in demand, resulting into decline in share of domestic industry.

27. Between 2000-2001 and the POI, it is noted that the share of dumped imports from subject countries increased and was substantial, as may be seen from the table below:

28. It is noted that imports of subject goods from the subject countries significantly increased over the years, resulting in significant increase in share of subject imports in relation to total imports of the subject goods into India. At the same time, share of other countries in imports into India declined significantly.

29 The Authority has examined the share of dumped imports from the subject countries in consumption in India. The Authority finds that share of subject countries, which was 0.3% in 2000-01 increased to 33% of the demand during the POI. Market share of imports from subject countries, domestic industry and others were as follows over the periods:

30. It is seen from the above that share of subject imports increased significantly. It would also be seen that the domestic industry lost significant market share over the years and during the POI. It is further noted that other countries imports are below de minimis level.

31. As shown in the table below, cumulative analysis of subject country import price from 2000-01 to POI shows that import price of the subject good drastically declined by 83.54%

It is further noted that prices of the subject goods originated in or exported from subject countries individually and cumulatively showed steep declines over the years.

32. It has been represented before the Authority that imported subject goods are are competing in the domestic market with the after sales market of the subject goods as imported subject goods are not premium or branded products. It is further noted that prices of the domestic like product in the domestic market vary a great deal and the prices of the domestic like products catering to the OEM markets (branded products) are considerably more than the prices of the domestic like products catering to the after sales market (after sales goods). Therefore, for determining the price effects on the domestic like products on account of dumped imports, the Authority has compared the prices of the subject goods in the after sales market (non branded category) to the dumped import prices.

33.It has been represented that prices of the domestic like product in the domestic market vary a great deal and the prices of the domestic like products catering to the OEM markets (branded products) are considerably more than the prices of the domestic like products catering to the after sales market (after sales goods). Therefore, for determining the price undercutting margin, the Authority has compared the landed value of the subject goods (all of which cater to the after sales market (called non branded) from subject countries with the net sales price for the domestic industry (non branded or catering to the after sales market). The prices of the domestic industry were determined at the ex factory level. To determine landed price of imports from China and Taiwan, the Authority has added applicable basic customs duties and other charges to the CIF value. Comparison of landed price of imports and selling price of domestic industry

showed that during the period of investigation, the subject goods originating in the subject countries were sold in the Indian market at prices, which were significantly below the selling prices of domestic industry. Dumped products were thus significantly undercutting the domestic industry’s selling price.

34. It is seen from above that there is a constant decline in the selling prices of the domestic industry resulting in a price depression which is evident during the entire injury period.

35. Apart from the price depression, the above table shows that domestic industry is suffering from price suppression also.

36. For the examination of the impact of the dumped imports on the domestic industry in India, the Authority considered such indices having a bearing on the state of the industry as Production, Capacity Utilisation, Sales Quantum, Stock, Profitability, Net Sales Realisation, the Magnitude and Margin of Dumping etc in accordance with Annexure II (iv) of the Rules supra.

37. Capacity utilization of the domestic industry has shown the same trend as that of production, as may be seen from the table above. Capacity of the domestic industry remained the same over the years whereas capacity utilization increased to 87% by the POI from 80% in 2000-2001.

Sales Volume and Inventories

38. It is noted from above that sale volumes of the domestic industry were increasing up to the period 2002-03. However, sales volumes have shown a marginal decline thereafter in the period of Investigation. Sales volume of the domestic industry was ****MT during 2000-01 and after achieving a 25% growth the same reached to **** MT in 2002-03. The Authority notes that after reaching **** MT in 2002-03, sales fell to **** MT during the POI, even when the demand of the product increased significantly. Resultantly, the share of domestic industry declined during the injury period whereas the share of subject country imports increased.

Profits

39. it is seen that profitability of the domestic industry has been severely impacted. Thus, it is concluded that imports from subject countries may have forced the domestic industry to reduce the prices in the domestic market, which has directly impacted its profitability levels to such an extent that the domestic industry is suffering significant deterioration in the profitability during the injury period and during the POI, it has even reported losses. In view of the above, it is concluded that domestic industry has suffered injury on account of decline in profits during the injury period.

40. It is noted that the import prices of subject goods from the subject countries are continuously coming at lower prices. It is noted that the level of imports amongst other factors determines the domestic prices. The market prices in the domestic market appear to have been driven down by the higher volumes of dumped imports at dumped prices. It is further noted that price undercutting from the subject countries is very significant and there is significant price depression and price suppression on account of dumped imports from subject countries..

The Production of the domestic industry was fluctuating through injury period. When the domestic industry achieved a growth of 8% from 2000-01 to 2001-02, overall growth in production was only 9 % by the POI.

Productivity

42. It is noted that the productivity of the domestic industry increased 16% during the injury period. Per employee productivity of the domestic industry shows positive trend due to increase in production and less than proportionate increase in employees.

43. However, It is noted that in spite of increase in productivity, profitability of the domestic industry declined during the injury period. While improvement in productivity should have enabled the domestic industry to increase its profits, it appears that dumped imports resulted in decline in profits. With regard to the claim made by the importer concerning the ability of the domestic industry to produce quality as well as quantity of the subject goods, it is noted that claims of the domestic industry have been verified by the verification team and the data of the domestic industry has been accepted except for some corrections in the data which have been made by the Authority.

Return on investments

44. The trends in domestic industry’s return on capital employed is as follows:

It is seen that the domestic industry’s return on capital employed has severely deteriorated (the decline is about 107% over the injury period).

45. There is a little increase in the employment level with the domestic industry. Wages of the domestic industry show normal wage increases, while incidence of wages per unit of production has also increased.

Effects on cash flow

46. Even though the petitioner is a multi product company involved in production of some other products also, the product under consideration constituted 75% of company’s operations in the POI. The cash flow of the domestic industry is reflective of cash flow operations relating to product involved. After examining the cash flow of the domestic industry, it is noted that cash flow of the domestic industry deteriorated significantly over the injury period.

47. It is thus noted from the above that cash profit of the domestic industry declined in the injury period. The decline could be due to decline in profits as a result of dumping in the Indian market.

Ability to raise capital investments

48. After examining the records, it is noted that authority did not come across any inability of the domestic industry to raise capital.

Growth and Margin of dumping

49. As shown in the table below, the domestic industry has faced negative growth in many parameters.

50. The Authority finds that domestic industry faced negative growth in respect of a number of parameters. The margin of dumping as determined in the earlier paragraphs is considered very significant.

(i) With regard to the claim made by the importer regarding the capability of the domestic industry to produce quality as well as quantity, it is noted that data pertaining to these submissions have been verified by the Designated Authority. No justifiable reasons appear to reject these claims, except for some corrections in the data/information, which have been made by the Designated Authority.

(ii)With regard to the argument of the importer about the demand and supply gap of the subject goods in India and at the same time creating a monopoly in the Indian market, it is noted that demand for the product under consideration assessed by the Designated Authority is in the region of 997MT in the investigation period. It is also noted that the capacity of the domestic industry alone is 734 MT. and capacity of other Indian Producers appear to be in the region of 235 MT. Thus, there is no wide gap in the supply and demand of the subject goods in India. Furthermore, given the nature of product, the plant & machinery required for production of the product and the investment required therein, it does not appear that the domestic industry would not be able to meet the demand, should the market for the product remain free from dumped imports. However, in a situation of dumping and significant erosion in profitability, domestic industry may not like to enhance their capacity. It is noted that the market of the subject goods has reported 80% increase in demand during the injury period. While there has been significant growth in demand, the profitability of the domestic industry has been significantly eroded, while an improvement could have been expected in such a situation.

52. There has been significant increase in the volume of dumped imports from subject countries at the absolute level and also in relation to total imports and also in relation to total demand of subject goods into India. There has been significant price effect on account of dumped imports resulting into price depression, price undercutting and price suppression. The undercutting margin as well as the price depression have been determined and are considered to be significant. It is further noted that sluggish growth of sales volumes, continuous deterioration in the financial performance, decline in market share in demand (significant decline after showing increase up to 2001-2002), positive price undercutting in POI, positive price depression, decline in return on capital employed on a year to year basis, increase in average stock etc shows significant deterioration in the performance of the domestic industry over the injury period. The margin of dumping on account of import of subject goods from subject countries is very significant. The performance of the domestic industry, when compared between 2000-2001 and POI improved in terms of production, sales, capacity Utilization, Productivity Per Employee. However, this can not be considered satisfactory, given the fact that large number of parameters are showing significant adverse trends during the injury period which have culminated into the domestic industry suffering losses during the POI. On the basis of the above analysis, it is concluded that the domestic industry has suffered material injury.

52 In order to reach its conclusions on the cause of the injury suffered by the domestic industry and in accordance with Article 3.5 of Agreement of Anti Dumping and as per para (v) of Annexure II under Rule 11under Customs Tariff Act as amended, the Authority examined the impact of all known factors and their consequences on the situation in that industry. Known factors other than the dumped imports, which could at the same time have injured the domestic industry, were also examined to ensure that the possible injury caused by these other factors was not attributed to the dumped imports.

53. Between 2000-01 and the POI, dumped imports from the subject countries increased significantly in volume by 3532% (more than 100% from the previous year and in market share of imports by six times and in demand from 0.22% to 31% in the POI. As regards the export prices, they decreased substantially during the whole period under consideration and undercut domestic industry prices during the POI on average by ten times. Moreover, undercutting figures did not show the full impact of the dumped imports, since domestic industry prices were depressed. All this coincided with the deterioration of the situation of the domestic industry in terms of price reductions, reduced market shares as well as loss to the domestic industry. Prices of dumped imports were below those of the domestic industry throughout the period under consideration and exerted a pressure on them which forced the domestic industry to decrease prices in spite of increasing costs of production. It is, therefore, concluded that the dumped imports caused material injury to the domestic industry .

54. There were two other domestic producers of the subject goods during the period of investigation apart from the domestic industry. Though they have not submitted the information in the form and manner of domestic industry proforma, it could be concluded from the examination of information made available and verified by the Authority that they have been adversely impacted during the POI and their operating performance has gone down.

55. The Authority notes that there is no contraction in the overall demand during the period under consideration. On the contrary, the overall demand has increased significantly during the injury period. The Authority also concludes that there is no apparent change in the pattern of consumption.

56. According to the available information, the total import volume of the product concerned originating in countries other than subject countries are de-minimus and therefore, they are considered not to have had any impact on the domestic industry.

(f) Trade Restrictive practices of and competition between foreign and domestic producers and issues relating to the quality and types of the subject goods

57. The Authority notes that there is a single market for the subject goods where dumped imports from the subject countries compete directly with the subject goods produced by the domestic industry. The authority further notes that the imported product is sold to meet the similar commercial grades and specification as domestically produced subject goods. It is further noted that the imported subject goods and domestically produced goods are like articles and are used for similar applications/end uses. With regard to argument of importer about the quality, rate and availability of the subject goods manufactured by the domestic industry, it is noted that the domestic industry produces a very large no. of different types of the product under consideration. It therefore does not appear that the petitioner does not produce and supply wide variety of the product. Further, the Petitioner, Sky Industries, has been exporting the product to a very large number of countries. It is noted that the petitioner exported to about 29 countries in the investigation period, which included Countries from different parts of the world, including some of the developed countries.

(g) Developments in Technology, Export performance and productivity of the Domestic Industry

58. On the basis of the examination of the records of the petitioner, the authority holds that developments in technology, has not been a relevant factor for the injury to the domestic industry.

59. It is further noted that the various performance with respect to various economic indicators have been determined with respect to domestic sales only. Hence, the authority holds that material injury suffered by the domestic industry may not as a result of the export performance of the domestic industry.

60. As regards improvement in productivity, the authority notes that during the period under consideration, the productivity measures as output per person employed per year has tended to be the almost same during the injury period. On the basis of the examination, the authority holds that the productivity per se is not the cause for the injury to the domestic industry.

61. Significant increase in volume of imports between 2000-01 and POI lead to increase in share of imports in demand/consumption. As a direct consequence, share of domestic industry declined between 2000-01 and POI after recording an increase between 2000-01 and 2001-02. Market share of the dumped imports gradually increased over the periods. As a direct consequence, the market share of the domestic industry declined significantly. Imports from the subject countries were significantly undercutting the prices of the domestic industry. As a direct consequence, the domestic industry was prevented from selling the product at a price, which would have enabled it to recover its cost of production and earn a reasonable profit. This led to significant deterioration in the performance of the domestic industry in terms of profits, cash flows and return on investment.

62. Given the above analysis which has properly distinguished and separated the effects of all known factors on the situation of the domestic industry from the injurious effects of the dumped imports, it is concluded that these other factors as such did not reverse the fact that the material injury found may be attributed to the dumped imports.

63. It is, therefore, concluded that the dumped imports originating in the subject countries have caused material injury to the domestic industry within the meaning of Rule 11 of Anti Dumping rules and article 3.5 of the Agreement of Anti Dumping.

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

65. The Authority recognizes that the imposition of anti dumping duties might affect the price levels of the products manufactured using 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. 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 subject goods.

66. The Authority notes that the imposition of anti dumping measures would not restrict imports from subject countries in any way, and therefore, would not affect the availability of the product to the consumers. The consumers could still maintain two or even more sources of supply.

67. The Authority has, after considering the foregoing, come to the conclusion that:

A. The subject goods have been exported to India from the subject countries below its normal value.

C. The injury has been caused cumulatively by the dumped imports from subject countries.

68. The Authority considers it necessary to impose an anti dumping duty on all imports of subject goods from subject countries in order to remove the injury to the domestic industry. The margin of dumping determined by the Authority is indicated in the paragraphs above. The Authority proposes 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. For the purpose of determining injury, the landed value of imports is proposed to be compared with the non-injurious price of the petitioner company determined for the period of investigation.

69. Accordingly, the Authority recommends that the definitive anti dumping duties be imposed by the Central Government on all imports of “narrow woven fabric having pile weave made up of man made fibers, (also known as hook and loop tape fasteners or Velcro tapes or fastening tape) falling within Custom Heading 5806 originating in or exported from Peoples Republic of China and Chinese Taipei. The Anti-Dumping duty shall be the difference between the amount mentioned in column 9 of the following table and the landed value of imports per Kg on all the imports of subject goods falling within Chapter 58 of the Customs Tariff, originating in or exported from the countries mentioned below: -

S. No.	Heading	Description of goods	Specification	Country of origin	Country of Export	Producer	Exporter	Reference price	Unit of measurement	Currency
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)
1.	5806	“narrow woven fabric having pile weave, made up of man made fibers, (also known as hook and loop tape fasteners or Velcro tapes or fastening tape	Any	Any country	Chinese Taipei	Any producer	Any exporter	7.61	Kg	US Dollar
2.	5806	do	do	Chinese Taipei	Any country	Any producer	Any exporter	7.61	Kg	US Dollar
3..	5806	do	do	Any country	China PR	Any producer	Any exporter	8.02	Kg	US Dollar
4.	5806	do	do	China PR	Any country	Any producer	Any Exporter	8.02	Kg	US Dollar

70. 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 under sections 3, 3A, 8B, 9 and 9A of the Customs Tariff Act, 1975.32.

71. Subject to the above, the Authority confirms the preliminary findings dated 10^th January 2005. .

72. An appeal against this order shall lie before the Customs Excise and Service Tax Appellate tribunal, in accordance with the Act.

73. The Authority may review the need for continuation, modification or termination of the definitive measures, as recommended herein, from time to time, as per the relevant provisions of the Act, and public notices issued in this respect from time to time. No request for such a review shall be entertained by the Authority unless the same is filed by an interested party within the time limit stipulated for this purpose.

		Domestic consumption / Demand
	AM01	AM02	AM03	POI
Subject countries	1437	45921	121200	333050
Non Subject Countries	8224	33001	13853	8248
Total Imports	9661	78922	135053	341298
Domestic Industry (Including Captive)	****	****	****	****
Other Producers	****	****	****	****
Domestic Demand	552569	683739	805562	997600

	Domestic Consumption or Demand

	AM01	AM02	AM03	POI
Demand (Kg)	552569	683739	805562	997600
Index	100.00	123.74	145.78	180.54

	AM01	AM02	AM03	POI
China (Kg)	0	41775	112218	292559
Market Share	0	52.93	83.09	85.72
Taiwan (Kg)	1437	4146	8982	40491
Market Share	14.87	5.25	6.65	11.86
Total Subject countries Imports	1437	45921	121200	333050
Total market share of SC	14.87	58.19	89.74	97.58
Other Countries	8224	33001	13853	8248
Other market share	85.13	41.81	10.26	2.42
Total Imports	9661	78922	135053	341298

Market Share of Imports from subject countries (SC) in Total imports (Index data)

	AM01	AM02	AM03	POI
China	0	100	269	700
Market Share	0	100	157	162
Taiwan	100	288.52	625.05	2817.75
Market Share	100	35	45	80
Total Imports SC	100	3196	8434	23177
Market Share of all SC	100	391	603	656

	2000-01	2001-02	2002-2003	Jan-Dec, 03 (POI)
Share of imports from
China	0	52.93	83.09	85.72
Taiwan	14.87	5.25	6.65	11.86
Other Countries	85	41.815	10.26	13

Country	Name of the Producer/exporter	Normal value	Export Price	D.M%
Country	Name of the Producer/exporter	Normal value	Export Price	D.M%
China PR	All Producers/exporters	****	****	355
Chinese Taipei	All Producers/exporters	****	****	298

Market Share of Domestic Industry in Demand
Domestic Industry (Including Captive)	AM01	AM02	AM03	POI
Domestic Industry (Including Captive)	****	****	****	****
Other producers	****	****	****	****
Dumped Imports	1437	45921	121200	333050
Other Imports	8224	33001	13853	8248
Total Market	552569	683739	805562	997600
Changes in Mkt Share
Total Market	552569	683739	805562	997600
Changes in Total Market		23.74	45.78	80.54
Domestic Industry	****	****	****	****
Changes in Dom Prod		****	****	****
Dumped Imports	1437	45921	121200	333050
Changes in Dump Imp		3095.62	8334.24	23076.76
Other Imports	8224	33001	13853	8248
Changes in Other Imp		401.28	168.45	100.29
Changes in Dump Imp		3095.62	8334.24	23076.76
% Share held by
Domestic Industry	80.24	72.58	68.94	55.00
Dumped goods	0.3	6.7	15.0	33.4
Other Imports	1.5	4.8	1.7	0.8
Other producers	18.0	15.9	14.3	10.8

Rupees Per Kilograms	2000-01	2001-02	2002-03	Jan-Dec, 03 (POI)
CIF export price –China		215.23	86.25	81.84
Indexed		100.00	40.07	38.02
CIF export price –Taiwan	501.47	123.44	90.59	87.72
Indexed	100	24.62	18.06	17.49
Subject Country Cumulatively	501.47	206.94	86.57	82.56
Indexed	100	41.27	17.26	16.46
Year by year change- China		0	-60	-5
Year by year change- Taiwan		-75	-27	-3
Year by year change- Subject Country Cumulatively		-59	-58	-5

	Price Undercutting from Subject countries
China	AM01	AM02	AM03	POI
Landed Price		293	113	104
Selling price (After Market)	****	****	****	****
PUC from China		****	****	****
% price undercutting				60-75%
Taiwan
Landed Price	684	168	119	112
Selling price (After Market)	****	****	****	****
PUC from Taiwan	(****)	****	****	****
% Price undercutting				60-75%

	Price Depression of domestic industry from dumped imports
	AM01	AM02	AM03	POI
Selling prices (After Market)	****	****	****	****
Indexed	100	75	63	59
Selling prices (OEM Market)	****	****	****	****
Indexed	100	115	106	94
Selling prices (OEM Market+After Market)	****	****	****	****
Indexed	100	87	72	70

Capacity Utilization
	Unit	2000-01	2001-02	2002-03	Jan-Dec, 03 (POI)
Capacity	MT	734	734	734	734
Production	MT	592	645	623	646
Capacity Utilization	%	80.60	87.85	84.89	87.92

	Actual and Potential Negative Effects on Inventories
	AM01	AM02	AM03	POI
Inventories/Stocks Kg	****	****	****	****
Sales Volume Kg	****	****	****	****
Index	100	112	125	120
Invent % to Sales Volume	6.69	16.96	14.97	14.53
Indexed Stocks	100	284	281	261

	Actual and Potential decline in profits
	AM01	AM02	AM03	POI
	Rs.Lacs	Rs.Lacs	Rs.Lacs	Rs.Lacs
Total Sales Value (OEM & After Mkt)	****	****	****	****
Total Cost of sales (OEM &After Makt)	****	****	****	****
Profit (Rs lacs)	****	****	****	(****)
% of profit to the Sales	****	****	****	(****)
Trend	100	90.92	19.96	-9.67

Year	Unit	2000-01	2001-02	2002-03	Jan-Dec, 03
Return on Capital Employed -	%	****	****	****	(****)
Return on Capital Employed	Indexed	100	80.63	16.09	(7.71)

Rs. Lacs	2000-01	2001-02	2002-03	Jan-Dec, 03
Cash profit	****	****	****	****
Index	100	92.16	32.35	8.56

Investments
	Unit	2000-01	2001-02	2002-03	Jan-Dec, 03
Fresh investments by the company	Rs.Lacs	****	****	****	****
	Indexed	100	45	34	166
Fresh investments in the product under consideration	Rs.Lacs	0	0	0	0

Growth
	Unit	2000-01	2001-02	2002-03	Jan-Dec, 03
Sales	MT	****	****	****	****
Year by Year trend	%		11.93	11.91	(4)
Profit Before Tax	Rs. Lacs	****	****	****	(****)
Year by Year trend	%		(11.18)	(79.73)	(145)
Market share in Demand	%	80.24	72.58	68.94	55.00
Year by Year trend	%		(9.54)	(5.01)	(20)
Selling Price of Domestic Industry	Rs/Kg	****	****	****	****
Year by Year trend	%		(25.11)	(16.48)	(6)
Return On Capital Employed	%	****	****	****	****
Year by Year trend	%		(****)	(****)	(****)
Cash Profit	Rs. Lacs	****	****	****	****
			(7.83)	(64.90)	(74)