G/SG/N/8/IND/26/Suppl.1
G/SG/N/10/IND/17/Suppl.1
G/SG/N/11/IND/12/Suppl.1
22 October 2014
(14-6048)  Page: 1/6
Committee on Safeguards  Original: English
 
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE  
AGREEMENT ON SAFEGUARDS ON PRELIMINARY 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 
(Saturated Fatty Alcohols) 
Supplement* 
The following communication, dated 20 October 2014, is being circulated at the request of the 
Delegation of India. 
 
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1  INFORMATION ON WHETHER THERE IS AN ABSOLUTE INCREASE IN IMPORTS 
The Product under Consideration (PUC) is 'Saturated Fatty Alcohols with carbon chain length of C8, 
C10, C12, C14, C16 and C18 including single blends and unblended (Not including branched 
isomers) which includes blends a combination of carbon chain lengths C12-C14, C12-C16, 
C12-C18, C-16-18 and C14-C16 (commonly categori zed as C12-C14) excluding pure C8'and is 
classified under Customs sub-heading No.38237010, 38237020, 38237040, 38237090 and 
29051700 of the Customs Tariff Act 1975.  
a. Increased imports in absolute terms: 
Fatty Alcohol is imported into India from a number of countries, and primarily from Indonesia, 
Thailand and Malaysia. The imports have shown an increasing trend in absolute terms, causing injury and serious threat of injury to the Dome stic Industry. The quantum of imports of Fatty 
Alcohol, during 2010-11 to 2013-14 and in 2014-15 (annualised based on data of 
Quarter 1' 2014-15) are as under:  
 2010-11 2011-12 2012-13 2013-14 Q1'14-15 2014-15* 
Imports (MT) 19,843 34,142 51,055 57,616 19,989 79,957 
Trend  100 172 257 290 101 403 
* Based on April- June' 2014 
 
It is apparent from the data in the table above th at there is a surge in import in absolute terms. 
The imports have increased from 19843 MT 2010-11 to 57616 MT in 2013-14, which shows an increase of 190%. There is a sudden surge in 2011 -12 over 2010-11, by about 72%. The imports 
                                               
* In continuation to document G/SG/N/6/IND/34 dated 20 February 2014. G/SG/N/8/IND/26/Suppl.1 • G/SG/N/10/IND/17/Suppl.1 • G/SG/N/11/IND/12/Suppl.1 
 
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  have continued to increase during the period of investigation. Analysis of data for 2014-15, shows 
a further increase of 303%, as compared to 2010-11. 
 
b. Share of imports relative to production: 
It is noticed that the imports of PUC in India during the POI have also increased in relation to the 
production of the Domestic Industry (DI), which is evident from the table given below: 
* Based on April-June' 2014 data  ** VVF Production less exports 
 2  SERIOUS INJURY OR THREAT THEREOF CAUSED BY INCREASED IMPORTS 
Accordingly, in analysing serious injury or threat of serious injury all factors, which are mentioned 
in the rules as well as other factors which are relevant for determination of serious injury or threat of serious injury, have been considered. No single factor has been considered as dispositive. All 
relevant factors within the context of the relevant business cycle and conditions which are relevant 
to the affected industry have been considered. All submissions made by the interested parties, domestic industry, supporting domestic producers and opposing interested parties, have been 
considered. The determination of serious injury or th reat of serious injury is based on evaluation of 
the overall position of the domestic industry, in light of all the relevant factors having a bearing on the situation of that industry as discussed below:  
a. Market Share: 
Market share of domestic producers has fallen significantly as compared to imports. Applicants had 
a market share of 38% in 2010-11 which fell to  27% during 2011-12. The market share of the 
applicants further declined to 18% in 2012-13 and 2013-14. An analysis of annualized data 
for 2014-15 (based on Quarter 1' 2014-15) shows a further decline in market share to 10%. On the other hand, the market share of imports in creased from 44% in 2010-11 to 71% in 2013-14, 
and 80% in 2014-15 (Annualized), which is evident from the table below: 
Financial 
Year Total 
Imports Sales of DI Sales of Other Total 
Demand Market Share 
          DI Imports 
2010-11 19,843 17,080 8,209 45,132 38% 44% 
2011-12 34,142 15,285 6,651 56,078 27% 61% 
2012-13 51,055 12,891 7,542 71,488 18% 71% 
2013-14 57,616 14,777 8,704 81,097 18% 71% 
Q1' 2014-15 19,989 2,594 2,485 25,068 10% 80% 
2014-15 79,957 10,376 9,940 100,273 10% 80% 
Based on April-June' 2014 data 
  2010-11 2011-12 2012-13 2013-14 Q1'14-15 2014-15* 
Imports (MT) 19,843 34,142 51,055 57,616 19,989 79,957 
VVF Production 68,605 49,585 67,837 93,297 15,187 60,746 
Total Indian 
Production 118,374 96,307 112,582 143,232 28,319 113,278 
Imports as a % of 
DI production 29% 69% 75% 62% 132% 132% 
Imports as a % to 
Indian Production  17% 35% 45% 40% 71% 71% 
Trend 100 238 259 214  455 
VVF Domestic 
Production** 33,319 28,974 22,560 23,303 3,266 13,065 
Imports as a % to 
Domestic Production  60% 118% 226% 247% 612% 612% G/SG/N/8/IND/26/Suppl.1 • G/SG/N/10/IND/17/Suppl.1 • G/SG/N/11/IND/12/Suppl.1 
 
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  b. Production:  
The production of the Domestic Industry has increased over the period, mainly on account of the 
exports. This becomes evident from the trend of do mestic production (i.e. Production less exports) 
shows a declining trend in the table indicated below : 
 
* Based on April-June' 2014 data 
 
The domestic production has declined from 33,319 in base year to 23,303 in 2013-14, and 13,065 in 2014-15 
 
c. Change in level of domestic sales:  
The domestic sales of DI have consistently declined in 2010-11 to 2012-13, both in absolute terms 
and relative to consumption. In 2013-14, there has been a marginal improvement in sales as 
compared to 2012-13, sales remained significantly lower as compared to 2010-11. The decline in 
sales, has to be viewed in the context of the sh arp decline in market share of domestic industry, 
from 38% to 10%, while the share of imports has gone up from 44% to 80%. 
 
  2010-11 2011-12 2012-13 2013-14 Q1' 2014-15 2014-15* 
Domestic 
sales of DI 17,080 15,285 12,891 14,777 2,594 10,376 
Trend 100 89 75 87  61 
* Based on April-June' 2014 
 
d. Capacity Utilization: 
The installed capacity of the domestic industry  has remained 1,20,000 MT during the period. The 
overall capacity utilization has improved due to sales in export markets. If export sales are 
removed from consideration, the capacity utilisation reflects a decline from 28% in base years to 19% in 2013-14, and 11% in 2014-15 is again on a declining trend in 2014-15. 
 
 
e. Profits and losses: 
The profitability of the Domestic Industry has fa llen sharply since 2010-11. The domestic industry 
is unable to make profitable sales, in the Indian market. Particulars 2010-11 2011-12 2012-13 2013-14 Q1' 2014-15 2014-15 
(annualized)* 
Production (DI) MT 68,605 49,585 67,837 93,297 15,187 60,746 
Trend 100 72 99 136  89 
Production less 
exports 33,319 28,974 22,560 23,303 3,266 13,065 
Trend 100 87 68 70  39 
 2010-11 2011-12 2012-13 2013-14 Q1' 2014-
15 2014-15 
(ann.) 
Capacity Utilization% (Production) 57% 41% 57% 78% 51% 51% 
Trend 100 72 100 137 89 89 
Capacity Utilization % 
(Production less e 
Exports) 28% 24% 19% 19% 11% 11% 
Trend  100 86 68 68 39 39 G/SG/N/8/IND/26/Suppl.1 • G/SG/N/10/IND/17/Suppl.1 • G/SG/N/11/IND/12/Suppl.1 
 
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Years 2010-11 2011-12 2012-13 2013-14 
Profit/loss 100 -266 -2,796 -2,232 
 
It has been contended by the domestic industry  in order to retain customers, the Domestic 
Industry was forced to lower its prices and make loss making sales. It is evident from the above 
table that the domestic industry is suffering severe financial losses on account of imports.  
 
f. Employment: 
It is seen from the table below that the leve l of employment has not undergone a significant 
change. In any case, employment levels are often inflexible in the short run, as evident from the table below: 
 
  2010-11 2011-12 2012-13 2013-14 2014-15* 
Employment 100 109 119 124 122 
* Based on April-June' 2014 data 
 
g. Productivity:  
The productivity levels have moved in line with capacity utilization. 
 
2010-11 2011-12 2012-13 213-14 2014-15* 
Productivity per day  100 72 99 136 89 
* Based on April-June' 2014 data 
 
h. Inventory: 
Given the nature of the product, domestic industry is not in a position to maintain significant 
inventories. The inventories reflected, are mainly on account of storage of the product during 
export. The level of inventories may therefore, not appropriately reflect the condition of the 
domestic industry.  
i. Unforeseen Developments: 
The Domestic Industry has given a number of reasons for surge in imports, which in their 
understanding constitute the unforeseen circumstances in this case, such as the unforeseen 
increase in global capacities- far in excess of global demand, the setting up of huge capacity 
leading to global over-supply of subject goods, global demand-supply gap caused by the setting up o f  p r o d u c t i o n  f a c i l i t i e s  i n  S o u t h  E a s t  A s i a ,  i m p o s i t i o n  o f  a n t i - d u m p i n g  d u t y  ( A D D )  b y  E U  w h i c h  shifted the focus to the Indian market and the expo rt tax on the principal raw material. Therefore, 
the rise in the imports of fatty alcohol on account  of imposition of ADD by EU aided by the huge 
demand-supply gap for this product due to excessive capacities is an unforeseen development, resulting in increase in imports causing serious inju ry and threat of serious injury to the domestic 
industry." 
 3   ADJUSTMENT PLAN 
The DI has provided a viable adjustment plan which focuses on cost reduction, capacity 
enhancement to cater the growing demand of PUC.  4  PRODUCT INVOLVED 
The product under consideration is "Saturated Fatty Alcohols with carbon chain length of C8, C10, 
C12, C14, C16, and C18 including single, blends and unblended ( Not including branched isomers) 
which includes blends a combination of carbon  chain lengths, C12-C14, C12-C16, C12C18, 
C-16-18 and C14-C16 (commonly categorized as C12-C14)"  excluding pure C8 hereinafter  G/SG/N/8/IND/26/Suppl.1 • G/SG/N/10/IND/17/Suppl.1 • G/SG/N/11/IND/12/Suppl.1 
 
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  referred to as 'PUC' (Product under consideration) . The 'PUC' is being imported under 
sub-heading 38237010, 38237020, 38237040, 38237090 and 29051700 of the Customs Tariff Act 1975. The classification is however indicative only and in no way binding on the scope of the 
present investigations. The 'PUC' are mainly used for the manufacture of surfactants, personal care 
products, home care products, pharmaceutical and agriculture related end application, processing 
of articles of leather, textile, fur, pulp, paper, petroleum products, fine chemicals, rubber products, plastic and fabricated metal products, include mini ng, offshore operations, construction work and 
as solvent and for degreasing purposes. The product is not sold at retail level and is for industrial 
users.  5  PRECISE DESCRIPTION OF THE PROPOSED MEASURE 
DG Safeguards, the competent authority, has recommended to impose safeguard duty at the 
following rate for two years and six months on imports of "PUC" into India  
 
Period Rate of Safeguard Duty 
First year 20% ad valorem  
Second year 18% ad valorem  
Subsequent Six months 12% ad valorem  
 
6  FURTHER INFORMATION 
The Final Findings were published in gazette of India on 9 October 2014. 
 7  PROPOSED DATE OF IMPOSITION OF 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/26/Suppl.1 • G/SG/N/10/IND/17/Suppl.1 • G/SG/N/11/IND/12/Suppl.1 
 
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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 20% ad valorem  for the first year, 18% ad valorem  for the second 
year and 12% for subsequent six months year wh en imported into India has been recommended 
by DG(Safeguards), the competent authority.  
2  SPECIFY THE PRODUCT SUBJECT TO THE MEASURE 
The Product under Consideration (PUC) is 'Saturated Fatty Alcohols with carbon chain length of C8, 
C10, C12, C14, C16 and C18 including single blends and unblended (Not including branched 
isomers) which includes blends a combination of carbon chain lengths C12-C14, C12-C16, 
C12-C18, C-16-18 and C14-C16 (commonly categori zed as C12-C14) excluding pure C8'and is 
classified under Customs sub-heading No. 38237010, 38237020, 38237040, 38237090 and 29051700 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 countries except Malaysia, Thailand and Indonesia do not 
exceed 3% individually and 9% collectively, the import of product under consideration originating from developing countries, except Malaysia, Thaila nd and Indonesia will not attract safeguard duty 
in terms of proviso to Section 8B of the Customs Tariff Act, 1975. 
 
__________