G/SG/N/6/IND/45  
 
12 Septemb er 2019 
(19-5863) Page: 1/3 
Committee on Safeguards  Original: English  
 
NOTIFICATION UNDER A RTICLE 12.1(A) OF TH E AGREEMENT ON  
SAFEGUARDS ON INITIA TION OF AN INVESTIGA TION AND  
THE REASONS FOR IT  
INDIA 
(Phenol ) 
The following communication, dated 11 September  2019, is being circulated at the request of the 
delegation of India.  
 
_______________  
 
Dated the 23rd August, 201 9 
 
 
1. An application has been filed under Rule 5 of the Customs Tariff (Identificati on and 
Assessment of Safeguar d Duty) Rules, 1997 (hereinafter also referred to as the "said Rules " 
or "safeguard rules ") by M/s Hindustan Organic Chemicals Limited and M/s Deepak Phenolics 
Ltd, ( herein after also referred to a petitioners or applicants) through M/s TPM Consultants, 
New Delhi allegi ng increased imports of "Phenol " (hereinafter also referred to as the 
"product under consideration " or "PUC" or subject goods) causing serious injury and threat 
of serious injury to the domestic industry. They have sought safeguard measures to protect 
the Domestic Industry of like or, directly competitive products from serious injury and threat 
of serious injury being caused by such increased imports of Phenol.  
 
2. Product Under Consideration : The product under consideration is 'Phenol '. It is an 
organic chemical, also known as Carbolic Acid and used in the manufacture of Phenol 
Formaldehyde Resins, Laminates, Plywood, particle Boards, Bisphenol -A, Alkyl Phenols, 
Pharmaceuticals, Diphenyl Oxid e and downstream chemicals. Phenol is classified under 
Chapter 29 of Custom Tariff Act under the sub -heading 29071110.  
 
3. Domestic Industry : The application has been filed by M/s Hindustan Organic Chemicals 
Limited and M/s Deepak Phenolics Ltd for imposition of Safeguard Duty on imports of 
Phenol. The applicants, account for a major share (87%) of the total production of the 
domestic like product in India. The two producers constitute Domestic industry in terms of 
Clause (b) of the Sub Section (6) o f Section 8B of the Custom Tariff Act, 1975.  
 
4. Period of Investigation : The period considered for the purposes of present investigation is 
from 2016 -17 to June 2019. The applicants have claimed surge in imports in Q1 2019 -20. 
 
5. Increased Imports : The petitioners  have claimed that  imports of product under 
consideration have increased during Q1 2019 -20, and they are also facing threat of 
increased imports. It is noted that there is a sudden, sharp and significant increase in 
imports of PUC during Q1 2019 -20. Despite the fact that there is a demand supply gap, the 
petitioners have claimed that large imports of subject goods are entering into Indian market 
which are at level higher than required to bridge the gap between demand and supply of 
subject goods. T he rate of increase in imports of subject goods is considered significant 
considering their quantum during Q1 of 2019 -20 as compared to previous quarters. The 
petitioners have claimed that imposition of anti -dumping duty by China coupled with G/SG/N/6/IND/45  
 
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  oversupply of  Phenol globally and US China trade war were unforeseen circumstances 
leading to increase in imports into India.  
 
6. Serious Injury and threat of serious injury to the domestic industry : The applicants 
have claimed that the increased imports of product und er consideration have caused and are 
also threatening to cause serious injury to the domestic industry. One of the major 
applicants ie M/s Deepak Phenolics which started its production in November, 2018, has 
claimed significant decline in sales and capacit y utilization for the product during Q1 of 
2019-20 and they have claimed further decline in sales and capacity utilization post POI. The 
petitioners have also claimed that market share of domestic industry has declined whereas 
that of imports of subject go ods have increased during Q1 of 2019 -20. They have also 
claimed that their profits have declined during Q1 as a result of price pressures caused by 
increased imports. The petitioners have further claimed that there is a significant increase in 
inventories of subject goods produced by domestic industry. The applicants have claimed 
that since the imposition of anti -dumping duties on Phenol by China PR on major exporting 
nations, the exports from these exporting nations are getting diverted into India resultin g in 
increase in imports into India. Further the applicants have claimed that there is an 
oversupply of Phenol globally and the prices of product have declined significantly. It has 
been claimed that applicant companies were forced by their customers to re duce their prices 
resulting in price suppression and depression.  
 
7. The applicants have requested for immediate imposition of safeguard duty in view of 
significant increase in imports of subject goods causing serious injury and threat of serious 
injury to  the domestic industry.  
 
8. After examining the application filed by applicants, the Director General, prima facie, finds 
that increase in imports of subject goods appear to be result of unforeseen developments 
such as global oversupply and trade measures imposed by China PR against major Phenol 
producing countries, and volume and prices of these imports have caused and/or 
threatening to cause significant injury to domestic industry.  
 
Initiation  
 
9. After determining that there is sufficient evidence to jus tify initiation of safeguard 
investigation, the Director General initiates an investigation pursuant to rule 5 of the 
Safeguard rules, 1997 in order to determine whether as a result of unforeseen 
developments, the imports of the product under consideration  constitute increased imports, 
and whether the increased imports have caused and/ or are threatening to cause serious 
injury to the domestic industry of like and/or directly competing products.  
 
10. All interested parties may make their views known within a period of 30 days from the date 
of this notice  to: 
 
Director General  
Directorate General of Trade Remedies (DGTR),  
Jeevan Tara Building, 4th Floor  
5, Parliament Street,  
New Delhi -110001  
 
11. All known interested parties are also being addressed  separately.  
 
12. Any other party to the investigation who wishes to be considered as an interested party may 
submit its request so as to reach the Director General on aforementioned address within 
30 days from the date of this  notice.  
 
13. If no informatio n is received within the prescribed time limit or the information received is 
incomplete, the Director General may record its findings on the basis of the facts available 
on record. The information must be submitted in hard copies as well as soft  copies.  
 
14. Submission of Information on Confidential Basis – The parties making any submission 
(including Appendices/Annexure attached thereto), before the Director General including 
questionnaire response, are required to file the same in two separate sets, in c ase G/SG/N/6/IND/45  
 
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  "confidentiality" is claimed on any part thereof. The "confidential " or "non-confidential " 
submissions must be clearly marked as "confidential " or "non-confidential " at the top of each 
page. Any submission made without such marking shall be treated as non-confidential by 
the Director General and the Director General shall be at liberty to allow the other interested 
parties to inspect such submissions. Soft copies of both the versions will also be required to 
be submitted, along with the hard copies, in two (2) sets of each.  The confidential version 
shall contain all information which are by nature confidential and/or other information which 
the supplier of such information claims as confidential. The information which is claimed to 
be confiden tial by nature or the information on which confidentiality is claimed because of 
other reasons, the supplier of the information is required to provide a good cause statement 
along with the supplied information as to why such information cannot be disclosed . The 
non-confidential version is required to be a replica of the confidential version with the 
confidential information preferably indexed or blanked out (in case indexation is not feasible) 
and summarized depending upon the information on which confident iality is claimed. The 
non-confidential summary must be in sufficient detail to permit a reasonable understanding 
of the substance of the information furnished on confidential basis. However, in exceptional 
circumstances, party submitting the confidential information may indicate that such 
information is not susceptible to summary, and a statement of reasons why summarization 
is not possible, must be provided to the satisfaction of the Director General. The Director 
General may accept or reject the request for confidentiality on examination of the nature of 
the information submitted. If the Director General is satisfied that the request for 
confidentiality is not warranted or if the supplier of the information is either unwilling to 
make the information publ ic or to authorize its disclosure in generalized or summary form, it 
may disregard such information. Any submission made without a meaningful non -
confidential version thereof or without a good cause statement on the confidentiality claim 
shall not be taken  on record by the Director General. The Director General on being satisfied 
and accepting the need for confidentiality of the information provided, shall not disclose it to 
any party without specific authorization of the party providing such information.  
 
15. Any interested party may inspect the public file containing non -confidential version of the 
evidence submitted by other interested  parties.  
 
16. In case where an interested party refuses access to, or otherwise does not provide 
necessary information wi thin a reasonable period, or significantly impedes the investigation, 
the Director General may record its findings on the basis of the facts available to it and 
make such recommendations to the Central Government as deemed  fit. 
 
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