WORLD TRADE  
ORGANIZATION  G/SG/N/16/IND/11 
2 May 2005 
 
 (05-1787) 
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 
 
INDIA 
 
(Industrial Sewing Machine Needles (ISMN
)) 
   The following communication, dated 4 September 2002, has been received from the 
Permanent Mission of India. 
 
_______________ 
 
  Attached herewith is a copy of the No tice of Initiation of safeguard proceedings 
(No. SSG/INV/1/2002 dated 13 August 2002) issued by  the Director General (Safeguards) against 
imports of Industrial Sewing Machine Needles (ISMN) into India.  
                                                     
 
1 This document was previously circulated as G/SG/N/6/IND/14 dated 10 September 2002. G/SG/N/16/IND/1 
Page 2  
 
  
OFFICE OF THE DIRECTOR GENERAL (SAFEGUARDS) 
5
th FLOOR, 'D' BLOCK, I.P. BHAWAN 
NEW DELHI 
 
NOTIFICATION 
 
F. No. SSG/INV/1/2002               Dated:  13 August 2002  
Notice of Initiation of a Safeguard Investigation
 
 
{Under Rule 6 of the Customs Tariff (Transitional Product Specific 
Safeguard Duty) Rules 2002} 
 
Subject: Initiation of safeguard Investigation concerning imports of Industrial Sewing 
Machine Needles (ISMN) into India originat ing from the People's Republic of China 
 
1. An application has been filed before me under Rule 5 of the Customs Tariff (Transitional 
Product Specific Safeguard Duty) Rules 2002, by M/s. Altek Lammertz Needles Ltd., Chennai 
(hereafter referred to as Altek) for imposition of safeguard duty on imports of ISMN into India from 
the People's Republic of China to protect the dome stic producers of ISMN against market disruption 
caused by the increased imports of ISMN into India. 
 2. Domestic industry
 
  The application has been filed by Altek on behalf of the domestic producers of ISMN for 
imposition of safeguard duty on impor ts of ISMN.  Though there are three other companies reportedly 
producing ISMN, Altek accounts for the major production and sale of ISMN. 
 3. Product involved
 
  The applicants have alleged market disr uption caused to the domestic producers by the 
increased imports of ISMN originating from China, P. R. into India.  ISMN is classified under sub-
heading No. 8452.30 of the First Schedule to the Customs Tariff Act 1975 and under 84523000 of the 
Indian Trade Classification (ITC).  The process of manufacturing ISMN involves more than a hundred steps before emerging as a finished needle.  Needle  making is a combination of precision engineering, 
chemical engineering and metallurgy.  The raw mate rial i.e. high-carbon steel wire is swaged and die-
pressed to obtain eye configuration.  It is th en grooved and fin (formed during die press stage) 
removed.  At this stage the needle is pointed.  The ne xt stage is to heat treat and chemically  debur it 
to give strength and make the eye smooth.  Thereafte r, the needle is given the desired point (ball, 
cutting point etc.).  The final operation is to chrome  plate it and polish the needle.  The needle is 100 
per cent visually inspected for quality before desp atch.  The ISMN are used in sewing machines for 
sewing a range of products including but not li mited to garments, shoes, leather garments, 
embroidery, tarpaulin, toys, seat covers for automobiles, etc. 
 4. Increased imports
 
  ISMN is imported into India mainly from th e People's Republic of China, Germany, Japan, 
Korea, Rep., Singapore and Chinese Taipei.  The im ports of ISMN in general from all countries put 
together increased from 116,470 kg. in 1997-98 to 18 1,981 kg. in 2001-02 (Annualized).  The imports 
of ISMN from the People's Republic of China have s hown an increase in absolute terms as well as 
compared to domestic production.  The imports a nd domestic production of ISMN during 1997-98 to 
2001-02 have been as under:  G/SG/N/16/IND/1 
 Page 3 
 
 
 (Figures:  Qty. in kg./value in Rs. lakhs) 
Imports 
China, P.R. Others Total  
 
Year  
Domestic 
production Qty. Value Qty. Value Qty. Value Imports from 
China, P.R. 
as % of 
domestic 
production 
1997-98 1,544 53,545 238.64 62,925 543.95 116,470 782.59 3,468% 
1998-99 3,683 85,818 436.09 58,912 746.65 144,730 1,182.74 2,330% 
1999-00 4,755 79,403 533.15 88,830 911.38 168,233 1,444.53 1,670% 
2000-01 4,353 29,270 190.06 65,602 884.95 94,872 1,075.01 672% 
2001-02 5,351 104,216 696.79 77,765 1, 346.81 181,981 2,043.60 1,948% 
 
5. Market disruption  
  The increased imports of ISMN have caused/th reatened to cause mark et disruption to the 
domestic producers of ISMN as indicated by the following factors: 
 
 (a) Prices of ISMN originating from China, P. R. have been steadily falling.  The c.i.f. 
price of ISMN which was Rs 446 per kg. in  1997-98 increased to Rs 671 per kg. in 
1999-2000 and declined to Rs 649 per kg.  in 2000-01 and thereafter improved 
marginally to Rs 669 per kg. whereas the prices of ISMN originating from other 
countries have shown an upward trend from Rs 1,210 per kg. in 1997-98 to Rs 2,425 
per kg. in 2001-02.  To keep up with the decline in prices of ISMN originating from 
China and to retain their market share,  the domestic producer had to reduce their 
prices of ISMN, as a consequence, their r ealization has declined considerably and 
resulted in loss to the domestic producer.  Th e realization which was Rs 7,140 per kg. 
in 1998-99 declined to Rs 5,096 per kg. in 1999-2000 and improved marginally to 
Rs 5,128 per kg. in 2000-01, thereafter, fell appreciably to Rs 3,817 per kg. in 2001-02. 
  (b) The capacity utilization of the domestic producer which was 57 per cent in 1998-99 
declined to 51 per cent in 1999-2000, increased to 58 per cent in 2000-01 and 
registered a decline of 13 per cent in 2001-02 which is at 45 per cent. 
  (c) While the market share of domestic producer of ISMN, considering the imports 
emanating from all countries, improved from 1.14 per cent in 1997-98 to about 3 per 
cent in 2000-01 in the total domestic consumption of ISMN, fell to 2.48 per cent in 
2001-02, but the injury suffered by the domestic producer by way of loss of market 
share was around 5 per cent considering the imports emanating from the People's Republic of China during the said period as is  indicated in the table below.  The 
domestic producers have been able to retain  even this reduced market share only at 
the cost of reduction of their sales price. 
 
Year Domestic sales Total domestic 
consumption (imports 
from the People's 
Republic of China and 
domestic sales) Share of domestic 
sales to domestic 
consumption 
(2/3 x 100%) Total domestic 
consumption 
(imports from all 
countries and 
domestic sales) Share of domestic 
sales to domestic 
consumption 
(5/6 x 100%) 
(1) (2) (3) (4) (5) (6) 
1997-98 1,348 54,893 2.45% 117,818 1.14% 
1998-99 1,621 87,439 1.85% 146,351 1.11% 
1999-00 3,549 82,952 4.28% 171,782 2.07% 
2000-01 2,836 32,106 8.83% 97,708 2.90% 
2001-02 4,631 108,847 4.25% 186,612 2.48% 
 G/SG/N/16/IND/1 
Page 4  
 
 6. The domestic producers have requested the im position of safeguard duty on imports of ISMN 
originating from China.  They have also requ ested for an immediate imposition of provisional 
safeguard duty.  7. The application has been examined and it appears that prima facie  increased imports of ISMN 
from the People's Republic of China have caused /threatened to cause market disruption to the 
domestic producers of ISMN and accord ingly it has been decided to in itiate an inves tigation through 
this notice.  8. All interested parties may make their views known by 23 September 2002  to: 
 
 The Director General (Specific Safeguards)  5
th Floor, Drum Shape Building 
 I.P. Bhawan, I.P. Estate  New Delhi-110002 
 India 
 9. All known interested parties are also being addressed separately.  10. Any other party to the investigation who wish es to be considered as an interested party may 
submit its representation so as to reach the Director General (Safeguards) within 21 days from the 
date of this notice. 
  
(R.K. GUPTA) 
Director General ( Specific Safeguards) 
 
 
__________