WORLD TRADE  
ORGANIZATION   
G/SG/N/16/IND/8/Suppl.2 
10 August 2012 
 (12-4406) 
Committee on Safeguards Original:   English 
 
 
 
NOTIFICATION OF APPLICATION OF TRANSITIONAL PRODUCT-SPECIFIC 
SAFEGUARD MEASURE PURSUANT TO SECTION 16 OF PART I  
OF THE PROTOCOL ON THE ACCESSION OF  
THE PEOPLE'S REPUBLIC OF CHINA 
 
INDIA 
 
(Carbon Black) 
 
Supplement 
 
 
 The following communication, dated 9 August 2012, is being circulated at the request of the 
Delegation of India.  
_______________ 
  
1. Market disruption and threat thereof 
 
 The imports of the product under considerati on i.e. Carbon Black (for rubber applications) 
falling under customs sub-heading no. 28030010, have in creased not only in absolute terms but also in 
relation to production and consumption with a si gnificant and sharp increase in the most recent 
period.  Increased imports have led to increase in market share of imports and reduction in market 
share of the domestic industry.  Decline in mark et share of the domestic industry has adversely 
impacted the production and capacity utilization of  the domestic industry.  The production of 
domestic industry has declined in absolute terms in the recent period (2011-12) in view of the 
increased import from China PR.  It is seen that impor ts of Carbon Black from China PR remained at 
a low level (between 3-4%) during 2008-09 a nd 2010-11 in relation to production of domestic 
industry and increased so rapidly thereafter in 201 1-12 that the imports in relation to production 
constituted 13% of Indian production.  
2. Information on whether there is an absolute increase in imports  
The imports of the product under consideration from China PR have in creased in absolute 
terms throughout the injury period.  There is a sudden, sharp and significant increase in imports in the 
recent period.  Imports from China PR increased from 12,971 MT in 2008-09 to 77,804 MT in 2011-
12 (Annualised basis), which is an increase of 600% over the period.  There is a sudden surge in 
imports in 2011-12 (A) over 2010-11 from China PR by 465% though increase in total import 
from all countries taken together is on ly 173% during corresponding period.   G/SG/N/16/IND/8/Suppl.2 
Page 2 
 
 
   
Financial 
Year Quarter Import from China (MT) Total Import 
(MT) % of Imports from 
China 
Annual Quarterly  
2008-09   12,971  39,187 33 
2009-10   17,722  63,244 28 
2010-11   16,724  61,185 27 
2011-12 Q1  5,789 14,828 39 
  Q2  25,686 32,465 79 
  Q3  26,878 31,972 84 
2011-12(A)* 77,804  105,686 74 
* (A) – Annualised. 
 
3. Evidence of market disruption and threat of market disruption  
 
 The increased imports of Carbon Black from Ch ina PR have caused and are threatening to 
cause market disruption to the domestic producers of Carbon Black  as reflected by the following 
factors: 
 
(a) Market Share   
  The surge in Chinese imports of Carbon Black has clearly adversely impacted the market 
share of the domestic industry.  This decline in th e market share of the dom estic industry is despite 
significant addition to the production capacities by the domestic industry and significant increase in inventories with the domestic industry.  The table below contains the data showing the decline in 
market share of domestic industries: 
 
Financial 
Year Quarter Total 
Import 
(MT) Import 
from 
China 
(MT) Sales of 
domestic 
industry 
(MT) Sales of 
other 
Indian 
Producers Total 
Demand 
(MT) % of Market Share 
    
    
      Domestic 
industry China 
Import Other 
Countries 
2008-09   39,187 12,971 322,809 98,052 460,048 70 3 6 
2009-10   63,244 17,722 400,295 119,391 582,930 69 3 8 
2010-11   61,185 16,724 443,430 109,537 614,152 72 3 7 
2011-12 Q1 14,828 5,789 119,327 26,073 160,228 74 4 6 
  Q2 32,465 25,686 99,206 33,000 164,671 60 16 4 
  Q3 31,972 26,878 100,608 32,741 165,321 61 16 3 
2011-12 (A) 105,686 77,804 425,521 122,419 653,627 65 11 4 
 
(b)  Production 
 
It is seen that the domestic production increased up to Q1 of 2011-12, but declined in the next 
two quarters.  The domestic production has fallen steadily from 163,458 MT in Q1 (2011-12), to 148,188 MT in Q2 (2011-12) and further to 137,035 MT in Q3 (2011-12) i.e. by 16%.  The table below shows the trend:  G/SG/N/16/IND/8/Suppl.2 
 Page 3 
 
 
   
Financial Year Quarter Production (MT) Per quarter (MT) 
2008-09   416,244 104,061 
2009-10   492,863 123,216 
2010-11   585,899 146,475 
2011-12 Q1 163,458 163,458 
  Q2 148,188 148,188 
  Q3 137,035 137,035 
2011-12 (A) 598,241 149,560 
 
 
(c)  Capacity Utilization 
 
It is noted that the domestic industry added capacity up to Q1 of 2011-12 and despite these 
additions in capacities; the domestic industry was ab le to achieve 90% capacity utilization in Q1 of 
2011-12.  However, capacity utilization fell sharply th ereafter in Q2 and further in Q3 to 82% and 
76% respectively.  The capacity utilization of domes tic industry in the most recent period is at the 
lowest level.  The expansion in capacity in 201 1-12 was 9% over 2010-11 but the capacity utilization 
declined by 5% during the same period due to increase in  market share of imports.  It is noted that the 
capacity addition took place in Q1, 2011-12 and the domestic industry was able to achieve 90% 
capacity utilization in this period on the enhanced  capacity.  However, capac ity utilization declined 
thereafter in Q2 and Q3 with surge in Chinese imports .  It is thus noted that the decline in capacity 
utilization coincided with the surge in imports.  
 
Financial Year Quarter Production (MT) Installed Capacity Capacity 
Utilisation (%) 
2008-09   416,244 500,000 83 
2009-10   492,863 552,500 89 
2010-11   585,899 667,000 88 
2011-12 Q1 163,458 181,002 90 
  Q2 148,188 181,002 82 
  Q3 137,035 181,002 76 
2011-12(A)   598,241 724,008 83 
 
(d)  Inventory 
 
 The levels of inventories have increased significantly throughout the injury period.  The table 
below depicts the inventory leve ls which have witnessed a massive surge from 3,912 MT in 2008-09 
to 12,872 MT in Q3 of 2011-12, almost three times in 2011-12 from the 2008-09 level, reflecting the 
adverse effects of the surge in imports.    G/SG/N/16/IND/8/Suppl.2 
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 (e) Employment and Productivity   
 
There is an increase in the level of employme nt with the domestic industry.  The productivity 
of the domestic industry has shown the same trend as that of production.  Productivity increased till 
Q1, 2011-12.  Productivity however declined in Q2 and thereafter Q3, 2011-12.   
Financial Year Quarter Employment 
(Nos) Production Productivity 
(MT per 
day) Productivity 
(MT per 
employee) 
2008-09  1,057 416,244 1,140 394 
2009-10  1,133 492,863 1,350 435 
2010-11  1,280 585,899 1,605 458 
2011-12  Q1 1,290 163,458 1,816 127 
  Q2 1,257 148,188 1,647 118 
  Q3 1,302 137,035 1,523 105 
 
(f)  Profit / loss 
The profit before tax, reported by the domestic  industry is considered in respect of product 
under consideration relating to its dom estic operations only.  It is not ed that the domestic industry has 
also export activities in relation to the product unde r consideration.  Profit earned by the  domestic 
industry in the exports operations have been segre gated and has not been considered for the purpose 
of analysing impact of increased imports on the profits earned by the  domestic industry.  The  profit 
earned by the domestic industry  has thus been considered in relation to carbon black for rubber 
applications relating to domestic market only.  It is seen that profitability of the domestic industry has steeply declined in the most recent period.  The profitability improved in 2009-10 but thereafter 
started declining significantly.  The domestic industr y suffered losses in the most recent period quarter 
(Q3).  It would be evident from the table below: Financial Year Quarter Production (MT) Sales of DI (MT) Inventory(MT) 
2008-09   416,244 322,809 3,912 
2009-10   492,863 400,295 7,594 
2010-11   585,899 443,430 8,678 
2011-12 Q1 163,458 119,327 7,902 
  Q2 148,188 99,206 11,600 
  Q3 137,035 100,608 12,872 
2011-12 (A) 598,241 425,521  12,872  G/SG/N/16/IND/8/Suppl.2 
 Page 5 
 
 
   
Financial Year Quarter Cost of Sales 
Index Selling Price 
Index Profitability 
Index 
  Rs/MT Rs/MT Rs/MT 
2008-09  100 92 (8) 
2009-10  77 85 8 
2010-11  97 102 4 
2011-12 Q1 92 96 3 
 Q2 104 105 2 
 Q3 104 103 (0.3) 
 
4.  Precise description of the product involved 
 
The product involved is 'Carbon Black (for rubbe r applications)', classified under Customs 
subheading No. 28030010 under the Customs Tariff Act, 1975. 
 
5. Precise description of the proposed measure 
 
 DG Safeguards, the competent authority, has recommended to impose a specific safeguard duty at the rate of 30% ad valorem  minus Anti-dumping duty payable, if any, on Carbon Black (first 
year), 25% ad valorem  minus anti-dumping duty payable, if any, (second year)  and 20% ad valorem  
minus anti-dumping duty payable, if any, (third year)  on imports of 'Carbon Black for rubber 
applications', from People's Republic of China.  
 
6. Further information 
  The Final Findings were published in Gazette of India on 31 July 2012. 
 7. Proposed date of imposition of specific safeguard measure 
 
 The specific Safeguard measure will be applicable from the date of issue of notification in this 
regard by the Department of Revenue, Minist ry of Finance, and Government of India. 
 8. Offer for consultations 
 
 India invites Government of People's Republic of China for consultations, if any, in this 
regard as per the provisions of Protocol of China.  
 
 
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