. /.WORLD TRADE
ORGANIZATIONG/SCM/W/515
17 June 2002
(02-3355)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
IMPLEMENTATION RELATED ISSUES REFERRED TO THE
COMMITTEE BY MINISTERS
Replies of INDIA to Follow-Up Questions from the UNITED STATES1
on Tiret 80 Proposals (G/SCM/W/464, G/SCM/W/465)
The following communication, dated 13 June 2002, has been received from the Permanent
Mission of India.
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FACTS AVAILABLE – INDIA
Clarify that all verifiable and timely submitted information should be taken into
account and that if a portion of information is not verifiable or timely submitted, facts available
may be used for that portion of the information
The Agreement on Subsidies and Countervailing Measures does not include language
supporting India’s proposal, and India’s proposal – to the extent that it is intended to mirror the
language of Annex II of the Anti-dumping Agreement –  does not contain a provision that verifiedinformation should be taken into account only when it can be used “without undue difficulties.”  We
remain concerned that if India’s proposal were adopted, the selective provision of information by the
exporter under investigation could result in a calculat ed rate of subsidization lower than the actual
rate.
Moreover, the mandated use of a limited amount of company information will not necessarily
result in a more accurate subsidy calculation.  If, as is often the case in a subsidy calculation, one
number (i.e. the subsidy amount) must be divided by another (i.e. the sales amount), if only one
number is “verified,” its use does not necessarily lead to a more accurate calculation.  This is true for
two reasons.  First, the accuracy of the subsidy calculation will be entirely contingent upon theselection of the value to be used for the second number, which is unknown.  Second, other completely
different information, such as the subsidization rate found for the same programme in another
investigation or review, may provide a more reasonable basis to approximate the actual rate of
subsidization.
Reply
India is of the view that the Subsidies Agreement should have a more detailed “facts
available” provision, which could mirror the language of Annex II of the Anti-Dumping Agreement.
As has been indicated earlier by India, responding companies would be prevented from selectively
                                                     
1 G/SCM/W/512G/SCM/W/515
Page 2
providing information in view of provisions of Article 12.7 of the Subsidies Agreement which
provides that determinations may be made on the basis of facts available.
The United States appears to suggest that instead of using limited amount of company
information, a more reasonable basis to approximate the actual rate of subsidization would be to relyon the subsidization rate found for the same programme in another investigation or review.  India is
concerned with such an approach, as the details of subsidization would vary from case to case and
from company to company.  A better approach would be to make use of the limited amount of
company information instead of relying on subsidization rate found for the same programme in
another investigation.
REVIEW PROCEDURES – INDIA
Clarify Article 21.2 to provide for automatic adjustment of countervailing duties for schemes
withdrawn
It is our understanding that this proposal woul d only apply to verified programmes that were
subsequently terminated and would not apply to verified programmes for which the subsidy level was
increased.  Therefore, any adjustment under this proposal would only result in the downward
adjustment of a countervailing duty and would never result in the upward adjustment of a
countervailing duty.  It would be helpful if an expl anation could be provided as to why the adjustment
under this proposal should necessarily only work to lower a countervailing duty.
Reply
India confirms the understanding of the United States that any adjustment under this proposal
would only result in a downward ad justment of a countervailing duty.  In India’s view such an
expedited procedure is relevant only in respect of those schemes, which at the time of the underlying
investigation were determined to have conferred benefit but are subsequently withdrawn.  Issue of
upward or downward revision of countervailing dutie s consequent to increase or decrease of subsidy
under a scheme would need to be addressed in the normal course as provided for under provisions of
Article 21.2.  The expedited automatic adjustment is being proposed for the most extreme case of
decrease of subsidy viz. a situation in which the scheme has been terminated and subsidy no longer
exists.  It may be far easier for an investigating au thority to confirm as a fact that such a scheme has
been withdrawn and that it has not otherwise been  reformulated under another scheme, than to come
to a conclusion regarding increase in subsidization levels of existing schemes.  India therefore
considers that the proposal on automatic adjustment is suitable for schemes no longer in existence,
than for upward revision of subsidies.
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