G/SG/Q2/IND/25  
 
1 Novemb er 2016 
(16-5981) Page: 1/3 
Committee on Safeguards  Original: English  
 
 NOTIFICATION UNDER A RTICLE 12.1(B) OF THE A GREEMENT ON  
SAFEGUARDS  ON F INDING A SERIOUS INJ URY OR THREAT  
THEREOF  CAUSED BY INCREASED IMPORTS  
 
NOTIFICATION OF A PR OPOSAL TO IMPOSE A M EASURE  
 
NOTIFICATION PURSUAN T TO ARTICLE 9, FOOT NOTE 2  
OF THE AGREEMENT ON  SAFEGUARDS  
REPLIES TO QUESTIONS POSED BY THE UNITED STATES1 REGARDING  
THE NOTIFICATION  OF INDIA2  
The following communication, dated 26 October  2016, is being circulated at the request of the 
Delegation of India. 
 
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Question 1  
 
In February  of this year, India imposed a minimum import price on steel products, which 
was extended in August for an additional two months.  Please clarify how the minimum 
import price imposed by India was taken into consideration for purposes of establishing 
serious  injury to India 's domestic industry.  
 
Reply  
 
Issues related to Minimum import prices (MIP) has been stated in paragraphs  H and I of DG 
(Safeguards) 's final findings, which is available at dgsafeguards.gov.in. In brief, India imposed 
Minimum Import Price ( MIP) on certain steel products on 5 February 2016 for immediate relief to 
the domestic industry from sudden increase in imports at predatory prices (which was impacting 
significantly to the domestic industry). Safeguard measure is a WTO instrument to safeg uard from 
sudden surge in imports causing serious injury the domestic industry. Since MIP was in place at 
the time of final findings and the fact that when a good cause shown by the domestic industry 
based on facts and figures for imposition of safeguard d uty was within the WTO provisions, 
safeguard duty was not applicable on imports of goods having MIP condition imposed on them as 
MIP would have provided immediate remedy to the injurious effects of such imports on domestic 
industry. All the relevant factor s analysed by DG (Safeguards) and indicated in the final findings 
clearly establishes the injury to the domestic industry. Moreover before imposition of MIP, the 
domestic industry had already suffered injury.   
 
Question 2  
 
With regard to the market share table on page 2, please clarify what is meant by "sales 
of other Indian producers. " Were these other producers treated as part of the domestic 
industry for purposes of India 's analysis of serious injury?  If not, please explain why.  
 
                                                
1 G/SG/Q2/IND/24 (dated 31 August 2016) and G/SG/Q2/IND/24/Corr.1  (dated 14 September 2016).  
2 G/SG/N/8/ IND/30-G/SG/N/10/IND/21 -G/SG/N/11/IND/16 (dated 15 August 2016). G/SG/Q2/IND/25  
 
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  Reply  
 
The "sales of ot her Indian producers " means the sales of the producers who have not filed the 
application/petition before the investigating authority. In terms of sub -section 6B of section 8B of 
the Customs Tariff Act, 1975 and Article 4(1)(c)  of WTO Agreement on Safeguar ds, the applicants 
(domestic Industry) constituted a major share of the total production of the said article in India, 
hence, other producers having minority share were not part of the domestic industry for the 
purpose  of analyses of serious injury.  
 
Quest ion 3  
 
The Indian domestic industry seems to have decreased production at the same time that 
it was increasing its number of employees, which would inherently seem to lead to a 
decrease in productivity per employee unrelated to imports.  Please clarify how the 
decrease in productivity per employee is related to imports of subject merchandise and 
not a direct result of increased hiring while reducing production.  
 
Reply  
 
In this regard, paragraphs 29 to 34 of the final findings of DG (Safeguards) dated 2 Augus t 2016 
available in DG  (Safeguards) website at dgsafegards.gov.in, brief of which is also available in the 
WTO document n o. G/SG/N/8/IND/30 -G/SG/N/10/IND/21 -G/SG/N/11/IND/16 dated 
15 August  2016 which may be referred to.  It would be evident from the same that employment & 
productivity is not the only factor but there are a number of other relevant factors which justify  
the cause of serious injury due to increased imports.  
 
Question 4  
 
India notes that its domestic industry 's adjustment plan includes "expan sion of 
production capacities which will enable {it} to adjust to the international competition. " 
Please clarify, in light of the decline in India 's domestic industry 's capacity utilization 
identified in India 's notification, how an expansion of production  capacities will enable 
India 's domestic industry to adjust to international competition.  
 
Reply  
 
In this regard,  paragraphs 54 to 57 of the final findings ( dated 2 August  2016) of DG  (Safeguards) 
which is available at dgsafeguards.gov.in and also indicate d in the  WTO document 
no. G/SG/N/8/IND/30 -G/SG/N/10/IND/21 -G/SG/N/11/IND/16 dated 15 August 2016 wherein the 
adjustment plan, elaborated by the domestic industry , has been mentioned in detail . The domestic 
industry had also stated before the investigating authority that the expansion plan was already 
underway with substantial investments and the benefits from these included increase in volume of 
production, improvement in productivity, improvement in yields, conservation of energy and 
improvement in product  quality which definitely would help the domestic industry to adjust to 
international competition over a period of time.  
 
Question 5  
 
Article 9.1 of the WTO Agreement on Safeguards ( "Agreement ") provides for special 
treatment for a developing country if it s market share is less than 3 per  cent and 
developing countries in the aggregate account for less than 9 per  cent.  Footnote 2 to 
Article 9.1 provides that "[a] Member shall immediately notify an action taken under 
paragraph 1 of Article 9 to the Committee on Safeguards. " Most Members comply with 
the footnote 2 obligation by providing a list of the developing countries excluded from a 
measure in the notification itself, and developing countries generally see this as a vital 
transparency step, as notification s are often the best method to know whether a 
measure will be applied to them.  
 
India 's notification attempts to provide this transparency by directing developing 
countries to the relevant customs notification from 5 February 2016, without any further G/SG/Q2/IND/25  
 
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  details about how to access the notification.3 Please explain how Members, including 
developing country Members, can use the information in India 's notification to identify 
which developing countries are excluded from India 's safeguard measures.  
 
Reply  
 
India has published the list of developing countries for the purpose of SG investigations, vide its 
notification No.19/2006 -Customs (NT) dated 5 February 2016 which is available in the public 
domain at http://www.cbec.gov.in/htdocs -cbec/customs/cs -act/notifications/notfns -2016/cs -
nt2016/csnt19 -2016. While notifying the final findings or the Customs Notifications imposing the 
safeguard measure, names o f specific developing countries against whom the safeguard measures 
are being taken, are indicated therein.  Nevertheless for further clarity and address the concern of 
the US, India would either provide a link to the said notification or attach the notifi cation itself in 
its future notification to the WTO.   
 
Question 6  
 
As indicated in footnote 2, there is an Internet webpage that posts the relevant customs 
notification so as to determine which developing countries are excluded from the 
measure.  The Unite d States notes, however, that the notification is identified as "to be 
published ". Please confirm that the notification has actually been published.  
 
Reply  
 
Once the notification is issued by the competent authority, the notification is endorsed with the 
words "to be published " as all such notifications are also required to be published immediately 
thereafter in the Government Gazette.  
 
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3 For the benefit of developing country Members, the referenced  notification can be found at: 
http://www.cbec.gov.in/htdocs -cbec/customs/cs -act/notifications/notfns -2016/cs -nt2016/csnt19 -2016 
(accessed 16 August 2016).