G/SG/Q2/IND/21  
 
2 February 2016  
(16-0710)  Page: 1/3  
Committee on Safeguards  Original: English  
 
NOTIFICATION UNDER ARTICLE 12.1(A) OF THE AGREEMENT 
ON SAFEGUARDS ON INITIATI ON OF AN INVESTIGATION 
AND THE REASON FOR IT 
 
NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON 
SAFEGUARDS BEFORE TAKING A PROVISIONAL SAFEGUARD 
MEASURE REFERRED TO IN ARTICLE 6 
REPLIES TO QUESTIONS1 RAISED BY UKRAINE 
ON THE SAFEGUARDS MEASURE 
(Hot-rolled flat products of non-alloy and other alloy 
steel in coils of a width of 600 mm or more) 
The following communication, dated 1 February 2016,  is being circulated at the request of the 
Delegation of India. 
 
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 Question 1  
 
According to the non-confidential version of the Application for initiation of the 
investigation, there was a 42% decrease in imports of the product under consideration 
in the period 2013-2014, as compared to 2011-2012. Imports increased only by 14% in 
2014-2015, as compared to 2011-2012. 
 Such a slight increase in imports in 2014-2015 could not be considered as sharp enough 
and significant enough to cause or threaten to cause serious injury. 
 Besides, the Ukrainian Government would like to emphasize that the Applicant's 
approach of showing the increase in impo rts based on an annualized forecast for 
2015-2016 contradicts the principles and prov isions of the Agreement on Safeguards. 
According to Article 2 of the Agreement on Sa feguards, it should be determined that the 
product concerned is being import ed in such increased quantities as to cause or threaten 
to cause serious injury to the domestic indu stry. This provision does not stipulate any 
kind of forecast for the imports development.  
Would India please explain how the initiation  of this investigation and application of 
provisional safeguard duties based on the forecasted data on imports complies with 
Article 2.1 of the Agreement on Safeguards?  
Reply 
The Period of Investigation (POI) for safeguard investigation has been taken from 2013-2014 to 
2015-2016 (April-June). It would be evident from the preliminary determination that during this 
period, imports of Product Under Consideration (PUC) have shown an increasing trend in absolute 
terms as well as in relative terms.  
                                               
1 G/SG/Q2/IND/20 dated 28 October 2015. G/SG/Q2/IND/21 
 
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  Moreover, the concerns regarding the POI and the parameters thereof would be addressed in the 
final findings.  
 Question 2  
 
According to the Application, the Indian in dustry indicators showed positive trends 
during 2011-2015: 
 
 total domestic sales increa sed by 32.5% in 2014-2015, as compared to the same 
period of 2011-2012; 
 domestic sales of the Applicant increased by 22.6% in 2014-2015, as compared to 
the same period of 2011-2012; 
 total production increased by 34.7% in 2014-2015, as compared to the same 
period of 2011-2012; 
 production of the Applicant increased by 26.2% in 2014-2015, as compared to the 
same period of 2011-2012; 
 market share of all Indian producers incr eased by 3 percent points, i.e. from 81% 
to 84%, in 2014-2015, as compared to the same period of 2011-2012; 
 capacity of Applicant increased by 25% in 2014-2015, as compared to the same 
period of 2011-2012. 
In light of the positive development of th e afore-mentioned indicators, a determination 
that the domestic industry is suffering serious injury within the meaning of the 
Agreement on Safeguards does not seem warranted? 
 
Reply 
The Period of Investigation (POI) has been taken as 2013- 2014, 2014- 2015 & 2015-2016 
(April-June) and not the period 2011 to 2015. Applicants (Domestic Industry) had a market share 
of 45% in 2013-2014 which fell to 37% during 2015-2016 (A). During the same period, the 
m a r k e t  s h a r e  o f  i m p o r t  i n c r e a s e d  f r o m  6 %  t o  1 2 % .  T h e  p r o d u c t i o n  a s  w e l l  a s  c a p a c i t y  o f  t h e  domestic industry remained at the same level during 2013-2014, 2014-2015 and 2015-2016 
(Annualized). Hence, the concern expressed by the member country is not correct. 
 Moreover, the investigation is still continuing and the final findings would take care of such 
concerns of the Member countries. 
Question 3 
 On 28 September 2015 India notified the WTO of its intention to impose a 
provisional safeguard duty  s t a r t i n g  f r o m  9  S e p t ember 2015 (Notification 
G/SG/N/7/IND/10-G/SG/N/11/IND/14).  
On the same date (28 September 2015), Indi a notified to the WTO the imposition of 
provisional safeguard measures starting  from 14 September 2015 (Notification 
G/SG/N/7/IND/10/Suppl.1-G/SG/N/11/IND/14/ Suppl.1). This is deemed to be a 
procedural violation of the Agreement on Sa feguards which requires that the WTO be 
notified before the introduction of duties.  Moreover, pursuant to Article 12.4 of th e Agreement on Safeguards: "A Member 
proposing to apply or extend a safeguard measure shall provide adequate opportunity 
for prior consultations with those Members having a substantial interest".  
On 28 September 2015, India notified to th e WTO its offer to conduct consultations on 
the proposed provisional safeguard measures and on the same date India notified the 
imposition of provisional safeguard meas ures starting from 14 September 2015. 
Apparently, no consultations were provided before the introduction of the measures. G/SG/Q2/IND/21 
 
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Therefore, India violated Article 12.4 of th e Agreement on Safeguards by introducing 
provisional safeguard measures on 14 Sept ember 2015, i.e. before notifying the WTO 
and before offering consultations. 
 
Would India please identify what specific step s will be taken in the future to ensure that 
such delays do not occur again? 
 
Reply 
India takes its notification obligations very seriously. There has been a few days of inadvertent delay in notifying the provisional findings to WTO under Article 12.4 of SG Agreement because of 
lack of clarity on certain technical matters related to notification obligations enshrined in 
Article 12.1 vis-à-vis 12.4 of the SG Agreement. So far as consultation under Article 12.4 is concerned, India had offered the member countries for consultation in its notification to WTO, as 
required under Article 12.4 of the SG Agreement. 
 
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