G/SG/Q2/IND /26 
 
30 November  2016 
(16-6584) Page: 1/3 
Committee on Safeguards  Original: English  
 
 NOTIFICATION UNDER A RTICLE 12.1(A) OF TH E AGREEMENT  
ON SAFEGUARDS ON  INITIATION OF AN INV ESTIGATION  
AND THE REASON FOR IT  
NOTIFICATION PURSUAN T TO ARTICLE 12.1(C)  
OF THE AGREEMENT ON SAFEGUARDS  
REPLI ES TO QUESTIONS1 POSED BY UKRAINE REG ARDING  
THE NOTIFICAT IONS OF INDIA2  
(Hot-rolled flat sheets and plates (exclud ing hot rolled flat products in  coil form)  
and 
Hot-Rolled flat products of non -alloy and other  alloy Steel 
in coils of a width of 600 mm or more ) 
The following communication, dated 30 November  2016,  is being circulated at the request of the 
Delegation of India. 
_______________  
Question 1  
In both cases India used  the annualized forecasted data. The approach of showing the 
increase in imports of product under consideration on annualized forecast for 20 15-2016 
contradicts the principles and provisions of the Agreement on Safeguards. According to 
Article 2.1, the Member imposing safeguard measures must have determined that the 
product under consideration is being imported in such increased quantities as t o cause 
or threaten to cause serious injury to the domestic industry. This provision does not 
stipulate any kind of forecast for the imports development.  
Under the WTO rules, the imposition of safeguard measures can be justified "as a result 
of unforeseen developments " and due to the increase in imports, which must be recent 
enough, sudden enough, sharp enough, and significant enough, both quantitatively and 
qualitatively. Moreover, such increase in imports must cause or threaten to cause 
"serious injury " to the domestic industry producing like or directly competitive products.  
It should be noted, that the provisions of the Agreement on Safeguards and Article XIX 
of the GATT 1994 do not allow the use of forecast for the evaluation of the increase in 
imports.  
Would Republic of India please explain how the application of safeguard measures on 
imports of HRS in coils and the initiation of investigation on HRS based on the 
annualized forecasted data comply with Article 2.1 of the Agreement on Safeguards?  
                                                
1 G/SG/Q2/IND/23.   
2 G/SG/N/6/IND/42  (and G/SG/N/6/I ND/42/Corr.1 ) and G/SG/N/8/IND/28/Suppl.1 -
G/SG/N/10/IND/19/Suppl.1 -G/SG/N/11/IND/14/Suppl.3 . G/SG/Q2/IND/26  
 
- 2 - 
 
  Would Re public of India please clarify the methodology used by the Department of 
Revenue for annualizing the forecasted data?  
Reply  
India had notified earlier to WTO (G/SG/N/6/IND/42  and G/SG/N/6/IND/42/Corr.1) and 
G/SG/N/8/IND/28/Suppl.1 –G/SG/N/10/IND/19/Suppl.1 -G/SG/N/11/IND/14/Suppl.3) the brief of 
the final findings of investigating authority i.e, DG (Safeguards), and stated there that the 
details of the final findings is available in the public domain which can be accessed at 
at<dgsafeguards@nic.in> . The question raised by Ukraine has been addressed in paragraphs 34 
to 44 of the final findings dated 15/03/2016 and paragraphs 18 to 28 of the final find ing dated 
02/08/2016, where the investigating authority has clearly brought out that in both the cases, 
imports increased in absolute as well as relative terms. The analysis is comprehensive and 
demonstrates  that increase in imports were sudden, sharp, sig nificant and recent.  
 
On the issue related to serious injury, paragraphs 45 to 59 of the final findings dated 
15/03/2016 and paragraphs 29 to 47 of the final finding dated 02/08/2016 may be referred 
where analysis of economic indicators, in both the cases , demonstrate existence of serious 
injury.  
 
"Unforeseen developments " requirement under Article XIX of GATT 1994, has been clearly 
established under paragraphs 71 to 82 of the final findings dated 15/03/2016 and paragraphs 58 
to 72 of the final finding dat ed 02/08/2016. It has also been explained therein as to how such 
circumstances led to increase in imports. India considers that these paragraphs clearly explain the 
requirement and the evidence thereof.  
 
Though there is no specific methodology prescribed e ither in Article XIX of GATT 1994 or under 
the Agreement on Safeguards, India would like to inform that methodology used for annualizing 
the actual data in both the cases, as indicated below : 
 
Annualised Data  = Total actual Data up to the month  X 12  
     Number of Months  
 
Question 2  
The existence of serious injury to Indian industry was not proved in the investigation on 
HRS in coils as well as in the Application on initiation of investigation on HRS. In 
particular, certain indicators concerning the Indian  industry showed positive trends 
during 2013 -2016 or remained stable over the injury period, including: domestic sales, 
capacity utilization, employment and productivity, production of domestic industry.  
Pursuant to Article 4 of the Agreement on Safeguards , "serious injury " relates to a 
significant overall impairment in the position of a domestic industry. In addition, the 
term "serious injury " requires a very high standard to be met.  
In light of the positive development of the aforementioned indicators, wo uld Republic of 
India please explain how the determination that domestic industry is suffering serious 
injury in case on HRS in coils complies with Articles 2.1, 4.1 (a) and 4.2 (a), (b) of the 
Agreement on Safeguards?  
Would India also clarify how the deci sion to initiate safeguard investigation on HRS 
based on the Application which actually proves positive development of Indian industry 
complies with the provisions of Articles 2.1, 4.1 (a) and 4.2 (a), (b) of the Agreement on 
Safeguards?  
Reply  
With regard to the overall impairment in the position of the industry, India would like to mention 
that as per Article 4.1(a) of the Agreement on Safeguards, the investigating authority need not 
have to show that each of the factors stated therein have to be establish ed as declining to justify 
the findings of serious injury.   G/SG/Q2/IND/26  
 
- 3 - 
 
  In case of HRS in Coil, please refer to paragraphs 45 to 59 of th e final findings dated 
15 March  2016 of DG  (Safeguards) where it is demonstrated that the overall position of the 
domestic industr y impaired due to sudden, sharp, significant and recent increase in imports.  
 
India considers that the investigation has been initiated after careful examination of the 
application filed by the domestic Industry and preliminary examination suggests that th e product 
is being imported into India in increased quantities causing or threatening to cause serious 
injury to the domestic industry. Hence, the action of DG  (Safeguards) is well within Article 2.1 of 
Agreement on Safeguards. Further, since the prelimina ry investigation has indicated that the 
domestic industry has suffered serious injury, on account of economic parameters such as 
market share, and profitability, which have sharply declined from the base year till 2015 -16 
(Annualised) whereas market share of imports have increased during the same period and this 
has caused significant overall impairment to the domestic industry, India considers that the 
provisions of Article 4.1 (a) 8(E) 4.2(a) have been followed by the investigating authority.  
 
Question 3  
The Republic of India did not provide in the notification on application the final 
safeguard measures  on HRS in coils the information regarding procedures for prior 
consultation with Members having a substantial interest as exporters of the product 
under c onsideration . 
Thus, Ukraine considers that India did not provide Members  having a substantial 
interest as exporters of the product under consideration with the adequate opportunity 
of being consulted in advance . 
Article 8.1 of the Agreement on Safeguards i mposes an obligation on Members to 
"endeavour to maintain " equivalent concessions with affected exporting Members. The 
Members concerned may agree on any adequate means of trade compensation for the 
adverse effects of the measures. If  there is no agreement  on this, the affected exporters 
can unilaterally consider to suspend equivalent concession, given the fact that safeguard 
measures has not been based on absolute increase in imports, but in a forecast 
development, hence not meeting the criteria spelled ou t in Article 8.3 of the Agreement 
on Safeguards . 
Would Republic of India please explain how the absence of the information regarding 
procedures for prior consultation with Members having a substantial interest as 
exporters of the product under consideratio n in the investigation on HRS in coils 
complies with the requirements for notifications under the Agreement of Safeguards 
approved by the Committee on Safeguards during the meeting on 19 October 20093? 
Reply  
India is committed to its obligation under the W TO Agreement. The final finding of DG  
(Safeguards) has been issued after careful examination and taking into consideration of the 
views expressed by the exporting nations including Ukraine.  
 
 
__________  
                                                
3 G/SG/1/Rev.1 -G/SG/N/6/Rev.1 -G/SG/89 of 5 November 2009 .