G/SG/N/8/IND/32  
G/SG/N/10/IND/23  
G/SG/N/11/IND/18  
21 November  2019 
(19-7965) Page: 1/5 
Committee on Safeguards  Original:  English  
 
  
NOTIFICATION UNDER A RTICLE 12.1(B) OF TH E AGREEMENT ON  
SAFEGUARDS ON FINDIN G A SERIOUS INJURY O R THREAT  
THEREOF CAUSED BY IN CREASED IMPORTS  
NOTIFICATION OF A PR OPOSAL TO IMPOSE A M EASURE  
NOTIFICATION PURSUAN T TO ARTICLE 9, FOOT NOTE 2  
OF THE AGREEMENT ON SAFEGUA RDS 
(Single Mode Optical Fibre)  
INDIA 
The following communication, dated 19 November , 2019, is being circulated at the request of the 
delegation of India .  
 
_______________  
 
 
This document is the notification of Preliminary finding of s erious injury or threat thereof caused by 
increased imports Single Mode Optical Fibre . This is in continuation to Document G/SG/N/6/IND/46 . 
1  INFORMATION ON WHETH ER THERE IS AN ABSOL UTE INCREASE IN IMPO RTS 
The product "Single Mode Optical Fibre" (hereinafter  also referred to as the "product under 
consideration" or "PUC") is being imported into India from various countries including China PR, 
Japan, and Korea RP . The major quantity of the PUC is being imported from China PR . The Domestic 
Industry ("DI") has su bmitted that there has been a sudden and significant increase in imports in 
2018-19, which has continued to be at increased levels in 2019 -20 as well . As seen from the below 
table, the Imports (non -DI) has increased from 1,903 KFKM in 2016 -17 to 7066 KFKM in 2018 -19, 
and have continued to be at increased levels in the most recent period (6,534 KFKM) . There has 
been significant increase of 27l  % in 2018 - 19 from the base year 2016 -17.  
In KFKM  2016 -17 2017 -18 2018 -19 Jan'19  - June'19  Jan'19  - June'19 
(annl.)  
Imports (non -DI) 1,903  2,469  7,066  3,267  6,534  
Trend  100 130 371 371 343 
Further, there has been a significant surge in each quarter of 2018 -19 and Quarter 1 of 2019 -20, 
compared to previous year(s), as indicated below . The DI has submitted that in Quarter 2 of 2018 -19 
there was an unprecedented rise in imports, which completely disrupted the domestic market . The 
imports thereafter have decreased, nevertheless, they have continued to be alarmingly at high 
levels.  
Imports (Non -DI) K FKM Quarter 1  Quarter 2  Quarter 3  Quarter 4  
2017 -18 769 545 540 615 
2018 -19 1244 2797 1436 1589 
2019 -20 1678    G/SG/N/8/IND/32 • G/SG/N/10/IND/23 • G/SG/N/11/IND/18  
- 2 - 
  2  SERIOUS  INJURY OR THREAT TH EREOF CAUSED BY INCR EASED IMPORTS  
a. Serious injury  
During the period of investigation there is an overall deterioration in the functioning of the Domestic 
Industry (DI) . The parameter -wise finding of the serious injury suffered by the DI on account of 
enhanced imports of the product under consideration is summarized as under:  
a) The volume of imports of the PUC h ave increased significantly and are continuing to be at 
increased level both in absolute and relative terms;  
b) The DI's market share has declined, whereas the market share of imports has increased;  
c) The increased imports of the PUC have substituted for the ma rket share of DI;  
d) The capacity utilization has decreased significantly despite increase in demand;  
e) The Domestic sales of the DI has declined significantly during the most recent period, and their 
market has been completely taken over by the imports;  
f) The DI  has now shut -down a part of their manufacturing facility and now running at very low 
capacity utilization  
g) The DI have been forced to lay -off their work force in Quarter 2, 2019 -20; 
h) The productivity per employee of the DI has shown a declining trend;  
i) The D I which were earning profit in 2017 -18 are now experiencing significant losses;  
j) The inventories of the PUC have significantly increased within the DI ; and 
k) There is significant price underselling and price suppression by the imported PUC.  
b. Threat of Serio us injury  
The trend in import volumes strongly suggests that imports of PUC are likely to increase in future 
due to excess capacity in China, export orientation of producers in China and opportunities lost by 
Chinese producers/exporters in other significan t international markets which would force such 
producers/exporters to target India . The trend of the deteriorating parameters demonstrated in 
paragraphs below is indicative of the threat of serious injury continuing in future.  
3  EVIDENCE OF SERIOUS INJURY  
a. Changes in level of Sales:  
The Domestic industry's sales to independent customers have declined significantly as compared 
to the previous years.  
(KFKM)  2016 -17 2017 -18 2018 -19 Jan'19 to 
June'19  Jan'19 to 
June'19 (Annl.)  
Combined DI Domestic Sales 
(Non - captive/Non related)  *** *** *** *** *** 
Trend  100 65 48 31 31 
Imports (Non DI)  1,903  2,469  7,066  3,267  6,534  
Trend  100 130 371 343 343 
It follows from the above table that in 2016 -17 the imports was  1903 KFKM and DI sales was *** 
KFKM . The situation has reversed in 2018 -19 with imports increasing to 7066 KFKM and DI sales 
being reduced to *** KFKM . The share of market lost by DI has been substituted by the increased 
imports.  G/SG/N/8/IND/32 • G/SG/N/10/IND/23 • G/SG/N/11/IND/18  
- 3 - 
  b. Market  Share of imports and domestic producers in domestic demand:  
From the below table, it can be seen that there is a significant decline in the Domestic industry's 
market share in 2018 -19 and the most recent period, which has been captured by imports . For the  
analysis of share in market for independent consumers, the consumption of PUC by the domestic 
industry (either by captive/related party sale or imports) has been excluded from the Total Indian 
consumption as reported in CRU (which has been considered for preliminary determination of Indian 
market size).  
 
2016 -17 2017 -18 2018 -19 Jan'19 - June'19  Jan'19 - June'19 
(Annl.)  
Imports (Non DI) share 
in demand for 
independent customers  
(excluding DI's 
Captive/Related party sales 
and DI imports)  11% 16% 55% 37% 37% 
Trend of DI's Share in 
demand for independent 
customers (excl. DI's 
Captive consumption and 
related party sales)  100 77 67 31 31 
 
c. Changes in level of Pr oduction:  
The production of the domestic industry in the most recent period has substantially declined in 
comparison to 2017 -18 & 2018 -19 though the demand has increased.  
Production (KFKM)  2016 -17 2017 -18 2018 -19 Jan'19 - June  19 Jan' 19 - June  19 
(Annl.)  
STL (Trend)  100 115 123 117 117 
BFL (Trend)  100 111 109 62 62 
Total DI Production 
(Trend)  100 114 120 103 103 
 
d. Capacity  Utilisation:  
The capacity utilisation of the Domestic industry is given below.  
The capacity utilisation of the Domestic industry has declined significantly in the most recent period, 
by 27 index points, from 2016 -17. 
e. Employment  
The DI has submitted that there has not been any substantial change in employment levels during 
the POI.  
Locations  2016 -17 2017 -18 2018 -19 Jan-June'19  
STL, Waluj (Trend)  100 110 110 107 
STL, Shendra  (Trend)  100 201 167 153 
BFL (Trend)  100 112 112 110 
Total DI Employees (Trend)  100 125 120 115 
However, in view of the reducing market share and capacity utilization, the DI has claimed that they 
have shut -down a part of their manufacturing capacity in Quarter 2' 2019 -20 (July  2019 to 
September  2019), and had to lay -off some of their work -force.  Capacity Utilization  2016 -17 2017 -18 2018 -19 Jan'19 - June'19  
DI Installed Capacity (KFKM)  100 112 135 143 
DI Production (KFKM)  100 114 120 103 
DI Capacity Utilization  100 103 89 73 G/SG/N/8/IND/32 • G/SG/N/10/IND/23 • G/SG/N/11/IND/18  
- 4 - 
  f. Productivity  
Productivity has marginally declined in the most recent period due to decrease in production.  
Productivity  
 2016 -17 2017 -18 2018 -19 Jan- June'19 
(annl.)  
DI Production  *** *** *** *** 
Trend  100 114 120 103 
Employees  *** *** *** *** 
Trend  100 125 120 115 
Productivity  *** *** *** *** 
Trend  100 90 99 89 
g. Profit/loss  
The profitability of the domestic industry has declined in 2018 -19 as compared to previous year, 
2017-18 and they are running in losses in the most recent period . Due to imports coming at such 
lower prices, the domestic industry is not able to earn reasonable return/profit . The profit/loss trend, 
as claimed by the DI, during the POI is as below:  
fig. in Trend  
 2016 -17 2017 -18 2018 -19 Jan- June' 19  
DI Wt . Avg. Unit Selling Price 
(Non -captive/Non -related)  100 117 121 82 
DI Wt . Avg. Cost of Sale  100 103 112 118 
DI Profit/ Loss  100 173 158 (65) 
The above table depicts that during the most recent period, the DI forced to sell at prices 
substantially below their cost of sales, thereby suffering huge losses in the most recent period . The 
quarterly analysis of profitability as submitted by the DI for the last 4 quarters is as below:  
Profit/Loss  Q2' FY 18 -19 Q3' FY 18 -19 Q4' FY 18 -19 Q1' FY 19 -20 
STL (Trend)  100 99 11 (60) 
BFL (Trend)  100 (36) (144)  (200)  
 
h. Price Underselling, undercutting and Price suppression  
Price Underselling, undercutting and Price suppression is shown in the table below:  
Fig.- In Rs/ FKM  
Per Unit  Jan- June  2019  
DI- Weighted Avg . Unit Selling Price (SP)  *** 
Weighted Avg . Fair Selling Price (FSP)  *** 
Landed Value (Rs/KFKM) (LV)  411 
Price Undercutting (SP -LV) (***)  
Price Underselling (FSP -LV) *** 
Price Suppression  *** 
In the most recent period, the landed price of the subject goods is significantly below the level of 
Fair Selling Price of the domestic industry . This shows that the imports are suppressing the prices of 
the domestic industry, making it unviable for them to continue in the domestic market.  G/SG/N/8/IND/32 • G/SG/N/10/IND/23 • G/SG/N/11/IND/18  
- 5 - 
  i. Inventory  
The table below depicts the inventory levels which have witnessed a significant increase during the 
POI. 
fig- In Trend  
Financial Year/Quarter  Inventory (STL)  Inventory (BFL)  Total DI  
2016 -17 100 100 100 
2017 -18 79 67 73 
2018 -19 567 171 356 
Jan'19 to June'19  588 193 377 
 
j. Unforeseen Developments  
From the data available on record, it has been preliminarily found that the sudden and sharp increase 
in imports of the PUC during 2018 -19 and the most recent period is an outcome of a combination of 
various global events, which were unforeseen or unexpected . It is seen that there was a sudden 
diversion of imports to India from Quarter I and 2 of 2018 -19. This coincides with the period when 
Chinese market had started facing over -supply issues, inter alia because of sudden increase in its 
Fibre manufacturing capacity, delay in tender of China Mobile, which is the biggest consumer of 
Optical Fibre in China as well as globally . Further, with the slump in Chinese market which consumes  
around 50 % of global Optical Fibre production, foreign producers in other countries were also left 
with excess production.  
4  PRODUCT INVOLVED  
The product concerned is "Single -mode Optical Fibre" ("SMOF") . SMOF refers to the Optical Fibre 
which facilitates t ransmission of a single spatial mode of light as a carrier and is used for signal 
transmissions within certain bands . It is used for manufacture of Optical Fibre Cables, including 
Uni-tube and Multi tube stranded cables, tight buffer cables, Armoured and U n-armoured cables, 
ADSS & Fig -8 cables, Ribbon cables, Wet core and Dry core cables and etc. S ingle-mode Optical 
Fibre is mainly applied to high -data rate, long distance and access network transportation, therefore, 
is mainly used in long -haul, metro area network, CATV, optical access network (for example FTTH) 
and even over short distance networks as applicable . Major consumption is driven by 3G/4G/5G 
rollout by Telco's, Connectivity of Gram Panchayat, Defence (NFS Project) and Data center.  
5  PRECISE DESCRIP TION OF THE PROPOSED  MEASURE  
DG Safeguards, the competent authority, has recommended to impose provisional safeguard duty 
at the rate of 25 % ad valorem for 200 days on imports of "Single Mode Optical Fibre" from all 
countries with the exception of the deve loping countries other than China PR.  
6  FURTHER INFORMATION  
The Preliminary Findings were published in gazette of India on 6  November  2019. Details of the 
Preliminary Findings can be accessed from the DGTR website at http://dgtr.gov.in/countervailing -
duty-investigation . 
7  PROPOSED DATE OF IMP OSITION OF SAFEGUARD  MEASURE  
The safeguard measure will be applicable from the date of issue of notification in this regard by the 
Department of Revenue, Ministry of Finance, Government of India.  
 
 
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