G/SG/N/16/IND/10/Suppl.2  
 
13 June 2013  
(13-3067)  Page: 1/5  
Committees 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 
(Hot-Rolled Flat Products of Stainless Steel) 
Supplement 
The following communication, dated 11 June 2013, is being circulated at the request of the 
Delegation of India.  
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(This notification is in continuation  to documents G/SG/N/16/IND/10 dated 
6 July 2012, G/SG/N/16/IND/10/Suppl.1 dated 5 October 2012 and G/SG/N/16/IND/10/Suppl.1/Corr.1 dated 11 December 2012) 
 
1. Product under consideration  Hot Rolled Flat products of Stainless Steel of 304 grade. 
 
2. Period of Investigation  
2009-10 to 2011-12. 
 3. Market disruption and threat thereof 
 
It has been argued by the Domestic Industry that there is significant shift in imports of the product 
under consideration (PUC). Import from countries other than China has decreased from 84.38% in 2009-10 to 34.90% in 2011-12, whereas imports fr om China increased from 15.62% to 65.10% 
during the same period. The threat of serious ma rket disruption is established by the following 
factors:- 
 
a) The price difference between the domestic and imported product is quite significant, thus 
making Chinese product significantly attractive vis-à-vis domestic industry product.  
b) The Chinese producers are holding significant unutilized capacities. As a result, they 
are 
continuously looking for additional markets to the extent possible. 
 c) The advantages of having lower cost of producti on owing to the availability of cheap nickel, 
abundant coke, low borrowing rate etc., is likely to lead the Chinese producers to intensify 
its 
export activities for the Indian marke t. 
 
d) The Indian market is large and price sensitive . The demand of the product is growing in the 
Indian market.  
 G/SG/N/16/IND/10/Suppl.2 
 
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  e) The domestic industry is faced  with significantly high level of inventories, which increased 
from 2120 MT in 2009-10 to 13663 MT in 2011-12.   f) The nature of production process is such that the producers tend to optimize the same. As a 
result, both the Chinese producers and domestic industry are trying to increase production. 
Increased imports are threatening market disruption under the circumstances.  
g) Chinese producers have significantly increased production of 300 series products (304 grade 
products forms significant proportion in 300 series production) both in absolute and relative terms. 
Chinese production of 300 series products increased significantly from 0.7 million MT in 2004 to 6.935 million MT in 2011.  
 
4. An absolute increase in imports  
The imports of the product under consideration have increased throughout the injury period in 
absolute terms. Imports from China increased from 5264 MT in 2009-10 to 35741 MT in 2011-12 which is an increase of 679%. It is important to note that while the imports increased sharply from 
2009-10 to 2010-11, the increase is also significant in the subsequent period i.e., during the 
Period of Investigation:    
Year Imports into India (grade 304 HR SS) Share in imports 
China Third countries Total China Third countries 
MT MT MT % % 
2009-10 5,264 28,439 33,703 15.62% 84.38% 
2010-11 26,702 19,662 46,364 57.59% 42.41% 
2011-12 35,741 19,164 54,905 65.10% 34.90% 
 
The imports of PUC in India have also increased ra pidly in relation to production of the domestic 
industry and in relation to Indian consumption as evident from the table below:   
SN Financial 
Year Imports 
from 
China 
(grade 
304) Domestic 
industry 
Production China imports in 
relation to 
production Indian 
consumption 
(grade 304) China imports 
in relation to consumption 
MT MT % MT % 
1 2009-10 5,264 100,265 5.25 87,281 6.03 
2 2010-11 26,702 98,448 27.12 88,781 30.07 
3 2011-12 35,741 129,900 27.51 102,002 35.03 
 
5. Evidence of market disruption and threat of market disruption 
 
The increased imports of Hot Rolled Flat products of Stainless Steel of 304 grade  from 
China PR have caused and are threatening to cause market disruption to the domestic producers of 
Hot Rolled Flat products of Stainless Steel of 304 grade , as reflected by the 
following factors: 
 
(a) Market Share 
 Market share has been 
determined  considering dispatches by the Indian industry and imports into 
India. It is seen that the market share of the domestic industry has declined from 51.33% 
in 2009-10 to 40.88% in 2011-12. This was the period when the imports entered the Indian 
market at a significant rate. The market share has remained constant at around 40% in the POI, 
as compared to the preceding financial year.   
The Domestic Industry has submitted that the declin e in the market share of the domestic industry 
was despite increase in demand and imposition of anti-dumping duty on imports from various sources. The domestic industry has contended that  it had expected increase in its market share 
with the imposition of anti-dumping duty for two reasons - (i) the domestic industry should have G/SG/N/16/IND/10/Suppl.2 
 
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  gained market share with fair market conditions being restored in the Indian market by imposing 
anti-dumping duty, (ii) the domestic industry si gnificantly augmented its capacity by undertaking 
green field expansion of the plant and wider product size (including PUC of width 1250 mm and above). This expansion of capacity & product size /type should have enabled the domestic industry 
to meet the increasing share of the demand of the product in the market.  
 
  2009-10  2010-11 2011-12  
Total Imports  (MT) 33,703 46,364 54,906 
Imports from China (MT) 5,264 26,702 35,742 
Imports from countries other than China (MT) 28439 19662 19164 
Sales by Domestic Industry  (MT) 44802 36772 41646 
Sales of other Domestic Producers 8777 5645 5450 
Total Demand  (MT) 87,282 88,781 102,002 
Market Share of Imports from China (%) 6.03 30.08 35.04 
Market Share of Imports from countries other 
than China (%) 32.58 22.15 18.79 
Market Share of Domestic Industry (%) 51.33 41.42 40.83 
Market Share of other Producers (%) 10.06 6.36 5.34 
 
(b) Production 
 
The production of the domestic industry has been determined on the basis of production reported 
by the domestic industry in its excise records. It is submitted by the Domestic Industry that due to 
the increasing demand for the product under consideration, the domestic industry increased its capacity. The domestic industry has set up a 0.6 million MT green field plant at Odisha for 
production of various hot and cold rolled steel products, including the product under consideration. 
The Domestic Industry  has further submitted that it has three broad market segments – (a) 
merchant domestic market; (b) captive consumption for various cold drawn steel products and (c) 
exports. It is claimed by the Domestic Industry  that capacities have been set up by them 
considering the domestic and global demand for the product under consideration, as evident from the table below:  
Year Available 
capacity for 
304 grade Total Production Total Demand 
MT MT MT 
2009-10 109,189 100,265 87,281 
2010-11 114,258 98,448 88,782 
2011-12 235,347 129,900 102,002 
 
The domestic industry contended that domestic sales declined despite increase in production due 
to surge in imports. The domestic industry further contended that the increase in production in 2011-12 as compared to 2010-11 is because of the enhancement of the production facility in 
July 2011. Given commencement of production at new production facilities and imposition of anti-
dumping duty, the petitioner contended that the do mestic industry had a legitimate expectation to 
significantly increase its production.  
 
(c) Capacity Utilization 
 The 
domestic industry  enhanced its capacities by setting up a fresh new green field plant at 
Odisha, which commenced commercial production in July 2011. The domestic industry  contended 
that the addition to capacity was in view of pr esent and potential demand of the product in the 
domestic and international market. However, capacity utilization of the domestic industry declined 
significantly in 2011-12 despite increase in the demand for the product under consideration. 
Capacity utilization fell from 91.82% in 2009-10 to 55.19% in 2011-12. The domestic industry contended that the production process demands that  the producers should continuously produce in G/SG/N/16/IND/10/Suppl.2 
 
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  order to keep the furnace running. The rate of production is regulated based on the ability of the 
company to store the product and the potential mark et situation. The domestic industry contended 
that low capacity utilization is a horrid situation for any producer of the product under consideration.  
 
Financial Year Production Available capacity 
for 304 grade Capacity Utilisation 
MT MT % 
2009-10 100,265 109,189 91.82 
2010-11 98,448 114,258 86.16 
2011-12 129,900 235,347 55.19 
 
(d) Inventory  
 
The level of inventories is considered as per excise records, maintained by the domestic industry. 
The levels of inventories have increased significantly throughout the injury period. The table below 
depicts the inventory levels which have witnessed a massive surge from 2120 MT in 2009-10 to 
13663 MT in 2011-12, almost six times in 2011-12 from the 2009-10 level, reflecting the plight of 
the domestic industry.  
Year Inventory 
MT 
2009-10 2,120 
2010-11 2,876 
2011-12 13663 
 
(e) Employment  and Productivity 
 
The Domestic Industry itself has admitted that overall productivity has deteriorated during the 
year 2011-12 despite the fact that the employment increased during 2011-12, due to setting up of new unit in Odisha, which started functioning from July 2011. 
 
Financial 
Year Production Employment Productivity 
MT No. MT/No. 
2009-10 100,265 511 196 
2010-11 98,448 526 187 
2011-12 129,900 802 162 
 
(f) Profit /loss 
 
The domestic industry has reported profit before  tax, duly certified by a practicing Chartered 
Accountant, which shows as follows:  
SN Particulars Units 2009-10 2010-11 2011-12 
1 Profit/loss Indexed 100 (222) (726) 
2 Profit in domestic sales Indexed 100 (182) (675) 
 The profit reported by the domestic industry ha s been considered in respect of product under 
consideration relating to its domestic operations only. It is claimed by the Domestic Industry that 
the landed price of the imports is significantly below the selling price of the domestic industry. As a 
result of significant price difference between th e domestic and Chinese product, the consumers 
resorted to significantly higher sourcing from China. It is claimed that the domestic industry has G/SG/N/16/IND/10/Suppl.2 
 
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  been prevented from increasing its prices in proportion to the increase in the cost of production. 
Thus, whereas the costs have increased due to increase in input costs, the domestic industry was unable to increase its selling price in proportion to the increase in costs. It is further claimed that whereas the selling price was above the cost of production earlier in 2009-10, it was below cost of 
production in 2010-11. The extent of the difference increased significantly in 2011-12. According 
to the Domestic Industry, the profit per unit of domestic sales declined significantly with the increase in imports to an extent that the domestic industry suffered significant financial losses 
in 2010-11 and 2011-12. 
 6. Precise description of the product involved:  
The product involved is  Hot Rolled Flat products of Stainless Steel of 304 grade classified 
under Customs sub-heading no 72191111, 72191112, 72191190, 72191200, 72191300, 72191400, 72192111, 72192112, 72192121, 72192122, 72192131, 72192132, 72192141, 
72192142, 72192190, 72192211, 72192212, 72192219, 72192291, 72192292, 72192299, 
72192310, 72192320, 72192390, 72192411, 72192412, 72192413, 72192419, 72192421, 721924, 72192423, 72192429, 72192490, 72201110, 72201121, 72201122, 72201129, 
72201190, 72201210, 72201221, 72201222, 72201229, 72201290 of the Customs Tariff 
Act, 1975.  7.  Precise description of the proposed measure 
 
DG (Safeguards), the competent authority, has co nfirmed the duty imposed provisionally and the 
final duty as per the detailed calculations for the period of 200 days starting from 4 January, 2013 
till 22 July, 2013 (both days inclusive) is recommended to be imposed at a level of 20% ad-
valorem on all imports of Hot Rolled Flat products of Stainless Steel of 304 grade from 
China. 
 
8. Further information  The Final Findings were published in gazette of India on 25 May 2013. 
 
9. Proposed date of imposition of specific safeguard measure 
 
The specific  safeguard measure shall be applicable from the date on which the notification for 
provisional Safeguard duty has been issued in this  regard by the department of revenue, Ministry 
of Finance, Government of India.  
 
 
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