WORLD TRADE
ORGANIZATIONG/SG/N/6/IND/10
13 July 2000
(00-2870)
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
The following communication, dated 10 July 2000, has been received from the Permanent
Mission of India.
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OFFICE OF DIRECTOR GENERAL (SAFEGUARDS)
5th Floor, Drum Shape Building, I.P. Bhawan,
I.P. Estate, New Delhi
NOTICE OF INITIATION OF A SAFEGUARD INVESTIGATION
(Under Rule 6 of the Customs Tariff (Identification and Assessment
of Safeguard Duty) Rules 1997)
F.No. SG/INV/1/2000
New Delhi
6 July 2000
Subject: Initiation of Safeguard Investigation concerning imports of Gamma Ferric 
Oxide/Magnetic Iron Oxide (GFO/MIO) into India
1. An application has been filed before me under Rule 5 of the Customs Tariff (Identification
and Assessment of Safeguard Duty) Rules, 1997 by Herdillia Oxides and Electronics Ltd. (HOEL),Mumbai for imposition of safeguard duty on imports of GFO/MIO into India to protect the domestic
producers of GFO/MIO against serious injury caused by the increased imports of GFO/MIO into
India.
2. Domestic industry:  The application has been filed by HOEL on behalf of the domestic
producers of GFO/MIO for imposition of safeguard duty on imports of GFO/MIO.  HOEL is the only
producer of GFO/MIO accounting for the total domestic production.
3. Product involved:  The applicants have alleged serious injury caused to the domestic
producers by the increased imports of GFO/MIO into India.  GFO/MIO is classified under subheading
no. 2821.10 of the First Schedule to the Customs Tariff Act, 1975, and under 28211000 of the Indian
Trade Classification (ITC).  The applicants produce GFO/MIO by the 'Goethite Route' akin toG/SG/N/6/IND/10
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international standards of manufacturing.  GFO/MIO produced in various grades, particle sizes and
shapes, are the only magnetic media which is an active component responsible for reproduction of
audio/video/information medium in a magnetic tape.
4. Increased imports:  GFO/MIO is imported into India mainly from Japan, South Korea and the
United States.  The imports have shown an increasing trend in absolute terms as well as compared to
domestic production.  The imports and domestic  production of GFO/MIO during 1995-96 to 1999-
2000 have been as under:
Year Domestic production
(MT)Imports (MT) Imports as percentage
of domestic production
1995-96 743 348   46.84
1996-97 906 338   37.30
1997-98 961 329   34.24
1998-99 873 487   55.78
1999-2000 424 645 152.12
5. Injury:  The increased imports of GFO/MIO have caused/threatened to cause serious injury to
the domestic producers of GFO/MIO as indicated by the following factors:
(a) Production – The domestic production which increased from 743 MT in 1995-96 to
961 MT in 1997-98 has declined to 424 MT in 1999-2000;
(b) Capacity utilization – The capacity utilization of domestic producers which was
49 per cent in 1997-98 has declined to 21 per cent in 1999-2000;
(c) Share of domestic producers in domestic consumption – The market share of
domestic producers of GFO/MIO in the total domestic consumption of GFO/MIO
which was about 70 per cent in 1997-98 has declined to 45 per cent in 1999-2000 asindicated from the table below.  The domestic producers have been able to retain this
reduced market share only at the cost of reduction of their sales prices.  The net sales
realization per kg. of GFO/MIO has dropped from Re 120.16 in 1995-96 to Re 87.43
in 1999-2000 i.e. a drop of 27 per cent approximately.
Year
(1)Domestic sales
(including captive
consumption)
(2)Total domestic
consumption including
imports
(3)Share of production to
domestic consumption
(2/3 x 100%)
(4)
1997-98 776 1,105 70.22
1998-99 754 1,241 60.76
1999-2000 529 1,174 45.06
6. The domestic producers have requested the imposition of safeguard duty on imports of
GFO/MIO.  They have also requested an imme diate imposition of provisional safeguard duty.
7. The application has been examined and it appears that prima facie  increased imports of
GFO/MIO have caused/threatened to cause serious injury to the domestic producers of  GFO/MIO
and accordingly it has been decided to initiate an investigation through this notice.G/SG/N/6/IND/10
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8. All interested parties may make th eir views known by 18 August 2000 to:
The Director General (Safeguards)
5th Floor, Drum Shape Building
I.P. Bhawan, I.P. EstateNew Delhi-110002
India
9. All known interested parties are also being addressed separately.10. Any other party to the investigation who wishes to be considered as an interested party may
submit its representation so as to reach the Director General (Safeguards) within 21 days from thedate of this notice.
   (Signed)
(R.K. Gupta)
Director General (Safeguards)
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