WORLD TRADE  
ORGANIZATION   
G/SG/N/16/IND/9/Suppl.1 
19 October 2012 
 (12-5691) 
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 
 
(Electrical Insulators) 
 
Supplement 
 
 
 The following communication, dated 17 October 2012, is being circulated at the request of 
the Delegation of India.   
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 1. Increase in imports 
 
 Imports of the product under consideration i.e., the Electrical Insulators made of Glass or 
Porcelain/Ceramics falling under Customs Clas sification Codes 854610 and 854620, from the 
People's Republic of China (henceforth referred to as China PR) have increased rapidly and throughout the period, 
in absolute terms. Imports from China PR increased by 201% in 2011-12 
in comparison to 2008-09.  Further, there has been a sudden and sharp surge in imports in 2010-11 
as well as in 2011-12  from China PR. Increase in imports w ould be evident from the table below: 
 
Financial Year Unit 2008-09 2009-10 2010-11 2011-12 
Import from China MT 11,891 16,282 26,376 35,782 
Imports from other countries MT 364 517 405 573 
Total imports into India MT  12,255 16,799 26,781 36,355 
Trends in imports into India  
China Index 100 137 222 301 
Other countries Index 100 142 111 157 
 
2. Market disruption and threat of market disruption 
  Imports of the product under consideration ha ve increased significantly in absolute terms 
and in relation to production and consumption in Indi a.  As a result of sign ificant surge in imports 
from China PR, the Domestic Industry has suffere d market disruption in terms of decline in 
market share of the Domestic I ndustry, decline in sales volumes, pr oduction & capacity  utilisation;  
increase in inventories, deterioratio n in productivity, significant dec line in profitability and return 
on investments.  Imports are undercutting the prices  of the Domestic Industry.  Consequently, the 
Domestic Industry has suffered decline in profits and re turn on investment.  It is  evident that material 
injury to the Domestic Industry has been caused  by the increased imports of the product under 
consideration, from China PR.   G/SG/N/16/IND/9/Suppl.1 
Page 2 
 
 
  The increased imports of these insulators from China PR have caused and are threatening to 
cause market disruption to the domestic producers of  insulators as reflected by the following factors: 
 
(a) Market Share - The surge in imports of Electrical In sulators from China PR has adversely 
impacted the market share of the Domestic Industry.  The market share of the Domestic Industry has 
declined significantly from 58.35% in 2008-09 to  51.37% in 2011-12 whereas the market share of 
imports from China PR has increased from 11.82% in 2008-09 to 26.96% in 2011-12.  The imports 
from China PR have caused reduction in the market  share of the Domestic Industry as well as other 
Indian producers.  The market share of imports from other countries is negligible. 
 
(b) Production  - The domestic production has been determined on the basis of production 
reported by the Domestic Industry in its excise re cords.  Production of the Domestic Industry has 
increased till 2010-11 but thereafter declined during 2 011-12.  This decline in production is despite 
the additions in capacities.  It has also been not ed that demand for Electrical Insulators has shown 
consistent increase over the period.  Thus, decline in production of the Domestic Industry is despite 
continued increase in demand for the product in the Country, as would be evident from the table 
below:  
Particulars Unit 2008-09 2009-10 2010-11 2011-12 
Production MT 73,723 77,769 88,776 79,801 
Total Demand  MT 100,569 113,267 132,135 132,715 
 
(c) Capacity Utilization -  The Domestic Industry has added capacity over the period.  The 
addition to capacity was in view of present and pot ential demand of the product in the market.  The 
Domestic Industry added capacity throughout the injury period and despite these additions in 
capacity, the Domestic Industry was able to impr ove its capacity utilization in 2010-11, after some 
decline in 2009-10.  However, capacity utilizati on fell sharply from 75.63% in 2010-11 to 66.34% 
in 2011-12.  The expansion in capacity in 2011- 12 was 1.4% over 2010-11 but the capacity utilization 
declined by about 9% during the same period due to  increase in imports and consequent decline in 
sales and production.  The capacity utilization of Domest ic Industry in the most recent period is at the 
lowest level.  
(d) Inventory -  The market share of the Domestic Industr y was declining and that of imports was 
increasing.  The Domestic Industry was unable to increase its sales volume (sales volumes in fact 
declined) and had to face the problems of accumulated inventories.  The closing stock of Domestic 
Industry increased from 6,038 MT in 2008-09 to 6, 319 MT in 2009-10, declined in 2010-11 to 
5,959 MT but thereafter increased in 2011-12 to 6,677 MT.  
 
(e) Employment and Productivity  - There was an increase in the level of employment with the 
Domestic Industry, with the increase in installe d capacities.  The productivity of the Domestic 
Industry has shown the same trend as that of producti on.  Insulator industry is highly labour intensive 
industry and such market disruption to the Domestic Industry would lead to loss of employment in the 
country.  It is further submitted that apart from th e permanent labour employed by the constituents of 
the Domestic Industry (for which information wa s provided in the petition), there is significant 
contract labours employed by the Domestic Industry.  There has been significant decline in employment through contract labour, during the period. 
 
(f) Profit/loss  - Profits of Domestic Industry declined throughout the injury period with 
significant losses in the most recen t period.  Due to availability of  the cheap imports from China PR, 
the Domestic Industry, in order to sustain in the market, was forced to maintain or even reduce its 
prices to individual customers, despite increase in co sts.  It resulted in significant financial losses to 
the Domestic Industry.  G/SG/N/16/IND/9/Suppl.1 
 Page 3 
 
 
  3. Precise description of the product involved 
 
 The product involved is Electrical Insulators, made of Glass or Porcelain/Ceramics, whether assembled or unassembled, falling under Customs Cl assification Code heading 854610 and 854620 of 
the Customs Tariff Act, 1975, imported from China PR into India.   
 
4. Precise description of the proposed measure  
 DG Safeguards, the competent authority, has recommended to impose specific Safeguard duty 
for two years at the rate of 35% ad valorem and 25% ad valorem in the 1st and 2nd year respectively 
on imports of Electrical Insulators, made of Glass  or Porcelain/ Ceramics, whether assembled or 
unassembled, falling under Customs Classification Code heading 854610 an d 854620, when imported 
from China PR. 
 
5. Further information 
 
 The Final Findings and the corrigendum/Addendu m to the final Findings were published in 
gazette of India on 27 September 2012 and 4 October 2012 respectively. 
 
6. Proposed date of imposition of specific 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. 
 
7. Offer of consultation 
  India invites Government of People's Republic of China for consultation, if any, in this 
regard, as per the provision of the Protocol of Accession.  
 
 
 
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