G/SG/Q2/IND/19  
 
30 March 2015  
(15-1763)  Page: 1/3  
Committee on Safeguards  Original: English  
 
 NOTIFICATION UNDER ARTICLE 12.1(A) OF THE AGREEMENT ON  
SAFEGUARDS ON INITIATION OF AN INVESTIGATION AND  
THE REASONS FOR IT 
REPLIES TO QUESTIONS POSED BY THE RUSSIAN FEDERATION1  
REGARDING THE NOTIFICATION OF INDIA2 
(Seamless pipes, tubes and hollow profiles of iron or non – alloy steel  
(other than cast iron and stainless steel)) 
The following communication, dated 27 March 2015, is being circulated at the request of the 
Delegation of India.  
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Question 1  
 Please explain whether the "increased import s" of the product under investigation were 
"sudden enough, sharp enough, significant en ough and recent enough" in light of the 
existing WTO precedents.  Reply 
 As mentioned in paragraph 27(a) & (b) of the final findings dated 11.3.2014 of DG (Safeguards), the import of the product has increased from 307,581 MT (2009-10) to 425,194 MT (2011-12) and 
thereafter decreased to 373,848 MT (2012-13). Th e import of the product though decreased in 
2013-14 but it was still more than the base year of the Period of Investigation (POI). Further, share of import relative to production has increased from 73% in 2009-10 to 87% in 2012-13. 
Thus, import of the product has increased in absolute terms as well as in relation to production, 
which has been held as significant, sharp and sudden.  Question 2  
Please explain whether there ar e sufficient grounds for qualification of the situation in 
the Indian domestic industry as a "significant overall impairment". 
Reply 
 
Significant overall impairment relates to serious injury to the domestic industry which has been discussed under paragraph 29(a) to (h) and paragraph 30 (c) of the final findings dated 
11.03.2014. The final findings of DG (Safeguards) are available at http://dgsafeguards.gov.in/ .  
 
Question 3  
Given the sharp growth of production facilit ies of the domestic industry in the year 
2010-2011, why didn't India assess during the investigation other relevant factors of 
                                               
1 G/SG/Q2/IND/16. 
2 G/SG/N/6/IND/32. G/SG/Q2/IND/19 
 
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  "serious injury" having a bearing on the stat e of the domestic industry, such as returns 
on investment or ability to raise capital?  
Reply 
 
Reasonable return on capital employed has been  considered and the recommendation for the duty 
by DG (Safeguards) i.e. the Investigating Authority, is based on the said calculation as would be evident from paragraph 38 of the Final Findings.  
 
Question 4  
The increase of employment in the industry  normally leads to the increase of wages 
which, in turn, may affect the situation in  the industry (specifically, its profits and 
losses). The domestic industry showed an in crease of employment over the period of 
investigation. Why the investigating author ity did not take into consideration for 
"serious injury" assessment the factor of wages? 
Reply 
 
Increase in employment is one of the factors and not the only factor which is required to 
determine injury to the domestic industry. Factors mentioned in paragraph 29(a) to (h) of the final 
findings clearly establish that increased imports had caused injury to the domestic industry. Moreover, factor of wages was not highlighted in any of the submissions placed before the Investigating Authority by any of the interested parties. 
 
Question 5  
Among other injury factors the investigating authority has examined the exports by the 
domestic industry. It was noted that the fall of exports in the year 2012-2013 by 
38,156 MT appeared to be one of  the factors contributing to the rise in inventories in the 
year 2012-2013 by 3,888 MT. The decrease of exports of the product under 
consideration cleared from the rise in inventories in the year 2012-2013 equals to 
34,268 MT. In this respect could India clarif y whether it was appropriate to consider 
exports as a factor of "serious injury"? Please, also clarify how the said decline of 
exports was considered by India when asse ssing the existence of "serious injury" 
caused by "increased imports"? How the fa ctor of decreased exports was taken into 
consideration when other factors relating to  production (namely, production, capacity 
utilization, profits and losses, empl oyment and others) were assessed? 
Reply 
 
There has been a significant increase in imports both in absolute and relative terms as stated 
earlier. Though decline in exports in 2012-13 had le d to an increase in inventory, the significant 
factor is the increase in imports. Nevertheless, exports have been considered as "other factor" 
while arriving at serious injury.  
Question 6  
It seems that the "unforeseen circumstances"  evaluated by the investigating authority 
related to a broad range of products. What  is the product coverage of the chapter 
devoted to "unforeseen circumstances"? How did India make sure that the "unforeseen 
circumstances" had resulted in increase of imports specifically of the products under 
consideration and not of other products? 
Reply 
 
Unforeseen circumstances have been analysed by the investigating authority for product under consideration (PUC) and not for different grades/types/specifications etc. of items falling under 
PUC. In this regard, paragraph 35 of the Final Fi ndings discusses the "unforeseen circumstance" in 
detail.  G/SG/Q2/IND/19 
 
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  Question 7  
In light of the above mentioned growth of pr oduction facilities, in crease of employment, 
decrease of exports and unforeseen circumst ances could India please elaborate on the 
issue of non-attribution to "serious injury" of factors other than "increased imports"?  
Reply 
 
There is an increased import in absolute terms as well as in relation to production. Even though 
imports have declined in 2012-13 as compared to 2011-12 in absolute term, it has increased in 
relation to demand throughout the period of investigation which shows that increased imports has captured the market share at the cost of the domestic industry, which is also co-terminus to the declining profitability of the domestic industry throughout the period of investigation. This shows 
that it is surge in imports which has caused serious injury. 
 Question 8 
 
W h e n  d o e s  I n d i a  i n t e n d  t o  n o t i f y  t h e  f a c t  o f  f i n d i n g  o f  s e r i o u s  i n j u r y  c a u s e d  b y  increased imports under Article 12.1(b) of the Agreement on Safeguards? 
 
Reply 
 India has already made the notification under Arti cle 12.1(b) of the Agreement on Safeguards as 
of 25 April 2014 vide document No. G/SG/N/8/IND/25-G/SG/N/10/IND/16-G/SG/N/11/IND/11. 
  
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