G/SG/N/8/IND/24  
G/SG/N/10/IND/15  
G/SG/N/11/IND/10  
 
27 January 2014  
(14-0402)  Page: 1/5  
Committee on Safeguards  Original: English  
 
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT 
ON SAFEGUARDS ON FINDING A SERIOUS INJURY 
OR THREAT THEREOF CAUSED 
BY INCREASED IMPORTS 
 
NOTIFICATION OF A PROPOSAL TO IMPOSE A MEASURE 
 
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2 
OF THE AGREEMENT ON SAFEGUARDS 
INDIA 
(Sodium Nitrite) 
The following communication, dated 23 January 2014, is being circulated at the request of the 
Delegation of India. 
 
_______________ 
  
1  SERIOUS INJURY OR THREAT THEREOF CAUSED BY INCREASED IMPORTS 
The imports of the Product Under Consideration (PUC), i.e., Sodium Nitrite classified under 
Customs Tariff 2834.1010, have increased signific antly in absolute terms and in relation to 
production and consumption in India. Though the volume of imports of Sodium Nitrite decreased 
in 2010-11, it increased thereafter in 2011-12 and more significantly in 2012-13. As a result of significant surge in imports, the Domestic Industry has suffered serious injury. Performance of the 
Domestic Industry followed the trend in imports, with improvement in 2010-11 with respect to 
most parameters and subsequent deterioration in 2011-12 and 2012-13. Market share, production, domestic sales, capacity utilization, prod uctivity, profit/loss, cash profits and return on 
investment improved in 2010-11, but subsequently declined in 2011-12 and further in 2012-13. 
Inventories with the Domestic Industry increased throughout the injury period, with a significant 
increase in 2012-13. Imports were undercutting the domestic industry prices. Imports were preventing the price increase by the Domestic In dustry in proportion to increase in cost of 
production. Thus, evaluation of the overall position of the domestic industry in light of all the 
relevant factors having a bearing on the situation of the domestic industry, shows 'a significant overall impairment'. It is thus concluded that domestic industry has suffered serious injury as a 
result of increased imports of the PUC. 
 G/SG/N/8/IND/24 • G/SG/N/10/IND/15 • G/SG/N/11/IND/10 
 
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  2  INFORMATION ON WHETHER THERE IS AN ABSOLUTE INCREASE IN IMPORTS 
Sodium Nitrite has been imported into India in such increased quantities and under such conditions 
in absolute terms as well as compared to the domestic production and consumption as to cause or threaten to cause serious injury to the domestic industry. Import figures are indicated in the table 
below: 
 
Financial Year Total Imports (MT) % of import with 
respect to production % of import with 
respect to 
consumption 
2009-10 14290 43% 35% 
2010-11 12915 37% 31% 
2011-12 14909 43% 35% 
2012-13 22162 64% 45% 
 
The imports have increased from 14290 MT in 2009-10 to 22162 MT in 2012-13, which shows an 
increase of 55%. There is a sudden surge in 2012-13 over 2011-12, by about 48%. The import 
with respect to total production increased from 43% in 2009-10 to 64% in 2012-13, i.e., by 21%, and the import with respect to demand increased from 35% in 2009-10 to 45% in 2012- 13, i.e., 
by 10%, which is a significant increase. 
 3  FACTORS THAT HAVE LED TO THE INCREASED IMPORTS OF THE PRODUCT 
It has been observed that factors such as major exporting countries having significant surplus 
capacities, decline in demand in these countries, significant increase in capacity in China leading to diversion of export to India, imposition of anti-dumping duty by USA on China and Germany 
leading to loss of market opportunity for these countries and the resultant exports to Indian 
market have led to the increased imports of the product in India.  4  EVIDENCE OF SERIOUS INJURY AND THREAT THEREOF 
The increased imports of Sodium Nitrite into India have caused and are threatening to cause 
Serious Injury to the domestic producers of Sodium Nitrite as reflected by the following facts:  
a. Market share: 
Market share of domestic producers has fallen significantly as compared to  imports. Domestic 
industry (DI) had a market share of 55% in  2010-11 which fell to 51% during 2011-12. The 
market share of the domestic industry further de clined to 41% in 2012-13. On the other hand, the 
market share of import increased from 35% in  2010-11 to 45% in 2012-13, as would be evident 
from the table below:  
Financial Total Sales Sales of Total Demand % of Market Inventories 
Year Import of DI Other Including  Share (MT) 
 (MT) (MT) Indian Captive     
   Producers consumption     
   (MT) (MT)     
     DI  Import  
2009-10 14290 21526 3959 41056 52  35 170 
2010-11 12915 22673 4517 41164 55  31 186 
2011-12 14909 21368 4667 42245 51  35 200 
2012- 13 22162 20257 5047 49241 41 45 943 
 G/SG/N/8/IND/24 • G/SG/N/10/IND/15 • G/SG/N/11/IND/10 
 
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  b. Production 
Though the production of the Domestic  Industry increased in 2010-11 compared  to 2009-10, it 
declined from 30473 MT in 2010-11 to 30105 MT in 2011-12, and further to 29661 MT in 2012-13. Production figures are indicated in the table below: 
 
Financial Year Production (MT) 
2009-10 29236 
2010-11 30473 
2011-12 30105 
2012-13 29661 
 
c. Capacity utilization: 
Capacity utilization of the Domestic Industry has declined significantly  in the most recent period, 
from 94% in 2009-10 to 98% in 2010-11 and further to 72% in 2012-13. The total all India 
capacity to produce the PUC in the most recent pe riod is sufficient to cater the total demand in 
India, but its utilization is as low as 72%, as shown below:- 
  
Financial 
Year Installed Capacity of 
DI (MT) Capacity 
Utilized (%) All India installed 
Capacity (MT) 
2009-10 31000 94 39500 
2010-11 31000 98 39500 
2011-12 31000 97 39500 
2012-13 41124 72 49625 
 
d. Changes in the level of Sales: 
Though the sales of the Domestic Industry incr eased in 2010-11 as compared to the 2009-10, it 
declined from 22673 MT in 2010-11 to 20257 MT in 2012-13. This decline in sales is despite the 
fact that the demand increased from 41164 MT in 2010-11 to 49241 MT in 2012-13. This clearly shows that the Domestic Industry suffered loss in sales and the market share at the cost of surge 
in imports in the wake of rising demand for the PUC as indicated in the table below: 
 
Financial Year Sales of DI (MT) Total Demand including 
captive consumption (MT) 
2009-10 21526 41056 
2010-11 22673 41164 
2011-12 21368 42245 
2012- 13 20257 49241 
 
e. Inventories: 
With increase in imports and decline in domestic sales, the Domestic Industry was faced with 
accumulated inventories. Closing stock has increased from 170 MT in 2009-10 to 200 MT 
in 2011-12, significantly increased to 943 MT in 2012-13, as shown below: 
 
Period Closing Inventories (in 
MT) 
2009-10 170 
2010-11 186 
2011-12 200 
2012-13 943 G/SG/N/8/IND/24 • G/SG/N/10/IND/15 • G/SG/N/11/IND/10 
 
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f. Employment and Productivity: 
There is no significant change in the level of employment and in productivity  over the injury 
period. It has shown normal growth over the peri od. It has been observed that these parameters 
are dependent on a number of other parameters as we ll and not reflective of impact of imports on 
the domestic industry.  
g. Profit & Loss: 
Profit and returns on investments of the Domestic  Industry has steeply deteriorated to such an 
extent that the Domestic Industry is now suffering financial losses. This would be evident from the table below: 
 
Financial Year Profitability 
(Rs. /MT) (Indexed) Return on Investments (%) 
(Indexed) 
2009-10 100 100 
2010-11 133 149 
2011-12 -4 4 
2012-13 -144 -102 
 
5  PRECISE DESCRIPTION OF THE PRODUCT INVOLVED (PUC) 
The product involved is Sodium Nitrite classifiable under Customs Tariff Heading 28341010 of 
Chapter 28 falling under First Schedule to the Customs Tariff Act, 1975. 
 6  PRECISE DESCRIPTION OF THE PROPOSED MEASURE 
Director General (Safeguards), the competent au thority, has recommended to impose specific 
safeguard duty at the rate of 30% ad valorem  for the first year & 28% ad valorem  for the second 
year (for three months only) on imports of Sodium Nitrite into India.  
7  ADJUSTMENT PLAN 
The restructuring plan of the domestic industry is  based on cost reduction, optimum utilization of 
production capacities and further expansion of capacities. 
 
8  PUBLIC INTEREST 
The impact of the safeguard duty on different se gments of the users of the subject product would 
be minimal. Imposition of safeguard duty will not result in significant increase in the prices of 
eventual end products. 
 9  FURTHER INFORMATION 
The Final Findings has been published in gazette of India on 17 September 2013.  
 10  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. 
 G/SG/N/8/IND/24 • G/SG/N/10/IND/15 • G/SG/N/11/IND/10 
 
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NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2, 
OF THE AGREEMENT ON SAFEGUARDS 
1  SPECIFY THE MEASURE 
Safeguard duty at the rate of 30% ad valorem  for the first year and 28% ad valorem  for the 
second year (for three months only) when imported into India has been recommended by DG, Safeguards, the competent authority. 
 
2  SPECIFY THE PRODUCT SUBJECT TO THE MEASURE 
Sodium Nitrite (NaNO2) classified under Customs sub-heading No. 28341010 of the Customs Tariff 
Act, 1975. 
 
3  SPECIFY THE DEVELOPING COUNTRIES TO WHICH THE MEASUR E IS NOT APPLIED 
UNDER ARTICLE 9.1 OF THE AGREEMENT ON SAFEGUARDS, AND THE IMPORT SHARE OF 
THESE COUNTRIES INDIVIDUALLY AND COLLECTIVELY 
As the imports from developing nations except China do not exceed 3% individually and 9% 
collectively, the import of product under consideration originating from developing nations except 
China may not attract safeguard duty. 
 
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