INDIA – CERTAIN MEASURES ON IMPORTS OF IRON AND STEEL PRODUCTS
Document: REPORT OF THE PANEL
Date: 6 November 2018
Document codes: WT/DS518/R
Complainant: Japan
Respondent: India
Third parties: Australia, China, EU, Indonesia, Kazakhstan, South Korea, Oman, Qatar, Russia, Singapore, Taiwan, Ukraine, U.S., Vietnam
Dispute stage: Panel
Agreements cited: Art. 3.1, 4.2(c), 11.1(a)  SafeguardsArt. XIX:1  GATT 1994Art. 2.1, 4.2(a), 4.1(a), 4.1(b), 4.1(c), 4.2(b), 5.1, 7.1, 12.4, 12.1, 12.2, 12.3  SafeguardsArt. II:1(b), I:1  GATT 1994

INDIA – CERTAIN MEASURES ON IMPORTS
OF IRON AND STEEL PRODUCTS

REPORT OF THE PANEL

LIST OF ANNEXES
ANNEX A
WORKING PROCEDURES OF THE PANEL AND INTERIM REVIEW
Contents Page
Annex A-1 Working Procedures of the Panel 4
Annex A-2 Interim Review 9
ANNEX B
ARGUMENTS OF THE PARTIES
Contents Page
Annex B-1 First integrated executive summary of the arguments of Japan 21
Annex B-2 Second integrated executive summary of the arguments of Japan 31
Annex B-3 First integrated executive summary of the arguments of India 41
Annex B-4 Second integrated executive summary of the arguments of India 53
ANNEX C
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex C-1 Integrated executive summary of the arguments of Australia 65
Annex C-2 Integrated executive summary of the arguments of the European Union 68
Annex C-3 Integrated executive summary of the arguments of the Separate Customs
Territory of Taiwan, Penghu, Kinmen, and Matsu
70
Annex C-4 Integrated executive summary of the arguments of Ukraine 72
Annex C-5 Integrated executive summary of the arguments of the United States 73

CASES CITED IN THIS REPORT
Short title Full case title and citation
Argentina – Footwear (EC) Appellate Body Report, Argentina – Safeguard Measures on Imports of
Footwear, , adopted 12 January 2000, DSR 2000:I, p. 515
Argentina – Footwear (EC) Panel Report, Argentina – Safeguard Measures on Imports of Footwear,
, adopted 12 January 2000, as modified by Appellate Body
Report , DSR 2000:II, p. 575
Argentina – Poultry
Anti-Dumping Duties
Panel Report, Argentina – Definitive Anti-Dumping Duties on Poultry from
Brazil, , adopted 19 May 2003, DSR 2003:V, p. 1727
Argentina – Preserved
Peaches
Panel Report, Argentina – Definitive Safeguard Measure on Imports of
Preserved Peaches, , adopted 15 April 2003, DSR 2003:III,
p. 1037
Argentina – Textiles and
Apparel
Panel Report, Argentina – Measures Affecting Imports of Footwear,
Textiles, Apparel and Other Items, WT/DS56/R, adopted 22 April 1998, as
modified by Appellate Body Report WT/DS56/AB/R, DSR 1998:III, p. 1033
Australia – Salmon Panel Report, Australia – Measures Affecting Importation of Salmon,
WT/DS18/R and Corr.1, adopted 6 November 1998, as modified by
Appellate Body Report WT/DS18/AB/R, DSR 1998:VIII, p. 3407
Canada – Continued
Suspension
Panel Report, Canada – Continued Suspension of Obligations in the EC –
Hormones Dispute, WT/DS321/R and Add.1 to Add.7, adopted
14 November 2008, as modified by Appellate Body Report
WT/DS321/AB/R, DSR 2008:XV, p. 5757
Canada – Renewable Energy /
Canada – Feed-in Tariff
Program
Appellate Body Reports, Canada – Certain Measures Affecting the
Renewable Energy Generation Sector / Canada – Measures Relating to the
Feed-in Tariff Program, WT/DS412/AB/R / WT/DS426/AB/R, adopted
24 May 2013, DSR 2013:I, p. 7
Chile – Price Band System Panel Report, Chile – Price Band System and Safeguard Measures Relating
to Certain Agricultural Products, WT/DS207/R, adopted 23 October 2002,
as modified by Appellate Body Report WT/DS207AB/R, DSR 2002:VIII,
p. 3127
China – Auto Parts Appellate Body Reports, China – Measures Affecting Imports of Automobile
Parts, WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, adopted
12 January 2009, DSR 2009:I, p. 3
China – Autos (US) Panel Report, China – Anti-Dumping and Countervailing Duties on Certain
Automobiles from the United States, WT/DS440/R and Add.1, adopted
18 June 2014, DSR 2014:VII, p. 2655
China – Broiler Products Panel Report, China  Anti-Dumping and Countervailing Duty Measures on
Broiler Products from the United States, WT/DS427/R and Add.1, adopted
25 September 2013, DSR 2013:IV, p. 1041
China – Cellulose Pulp Panel Report, China – Anti-Dumping Measures on Imports of Cellulose Pulp
from Canada, WT/DS483/R and Add.1, adopted 22 May 2017
China – Electronic Payment
Services
Panel Report, China – Certain Measures Affecting Electronic Payment
Services, WT/DS413/R and Add.1, adopted 31 August 2012, DSR 2012:X,
p. 5305
China – Publications and
Audiovisual Products
Panel Report, China – Measures Affecting Trading Rights and Distribution
Services for Certain Publications and Audiovisual Entertainment Products,
WT/DS363/R and Corr.1, adopted 19 January 2010, as modified by
Appellate Body Report WT/DS363/AB/R, DSR 2010:II, p. 261
China – Raw Materials Appellate Body Reports, China – Measures Related to the Exportation of
Various Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R /
WT/DS398/AB/R, adopted 22 February 2012, DSR 2012:VII, p. 3295
China – X-Ray Equipment Panel Report, China – Definitive Anti-Dumping Duties on X-Ray Security
Inspection Equipment from the European Union, WT/DS425/R and Add.1,
adopted 24 April 2013, DSR 2013:III, p. 659
Dominican Republic – Import
and Sale of Cigarettes
Panel Report, Dominican Republic – Measures Affecting the Importation
and Internal Sale of Cigarettes, WT/DS302/R, adopted 19 May 2005, as
modified by Appellate Body Report WT/DS302/AB/R, DSR 2005:XV,
p. 7425

Short title Full case title and citation
Dominican Republic –
Safeguard Measures
Panel Report, Dominican Republic – Safeguard Measures on Imports of
Polypropylene Bags and Tubular Fabric, WT/DS415/R, WT/DS416/R,
WT/DS417/R, WT/DS418/R, and Add.1, adopted 22 February 2012,
DSR 2012:XIII, p. 6775
EC – Approval and Marketing
of Biotech Products
Panel Reports, European Communities – Measures Affecting the Approval
and Marketing of Biotech Products, WT/DS291/R, Add.1 to Add.9 and
Corr.1 / WT/DS292/R, Add.1 to Add.9 and Corr.1 / WT/DS293/R, Add.1 to
Add.9 and Corr.1, adopted 21 November 2006, DSR 2006:III, p. 847
EC – Bananas III Appellate Body Report, European Communities – Regime for the
Importation, Sale and Distribution of Bananas, WT/DS27/AB/R, adopted
25 September 1997, DSR 1997:II, p. 591
EC – Bananas III
(Article 21.5 – Ecuador II) /
EC – Bananas III
(Article 21.5 – US)
Appellate Body Reports, European Communities – Regime for the
Importation, Sale and Distribution of Bananas – Second Recourse to
Article 21.5 of the DSU by Ecuador, WT/DS27/AB/RW2/ECU, adopted
11 December 2008, and Corr.1 / European Communities – Regime for the
Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 of
the DSU by the United States, WT/DS27/AB/RW/USA and Corr.1, adopted
22 December 2008, DSR 2008:XVIII, p. 7165
EC – Chicken Cuts Appellate Body Report, European Communities – Customs Classification of
Frozen Boneless Chicken Cuts, WT/DS269/AB/R, WT/DS286/AB/R, adopted
27 September 2005, and Corr.1, DSR 2005:XIX, p. 9157
EC – Fasteners (China) Appellate Body Report, European Communities – Definitive Anti-Dumping
Measures on Certain Iron or Steel Fasteners from China, WT/DS397/AB/R,
adopted 28 July 2011, DSR 2011:VII, p. 3995
EC – Fasteners (China)
(Article 21.5 – China)
Appellate Body Report, European Communities – Definitive Anti-Dumping
Measures on Certain Iron or Steel Fasteners from China – Recourse to
Article 21.5 of the DSU by China, WT/DS397/AB/RW and Add.1, adopted
12 February 2016, DSR 2016:I, p. 7
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products
(Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998,
DSR 1998:I, p. 135
EC – IT Products Panel Reports, European Communities and its member States – Tariff
Treatment of Certain Information Technology Products, WT/DS375/R /
WT/DS376/R / WT/DS377/R, adopted 21 September 2010, DSR 2010:III,
p. 933
EC – Salmon (Norway) Panel Report, European Communities – Anti-Dumping Measure on Farmed
Salmon from Norway, WT/DS337/R, adopted 15 January 2008, and Corr.1,
DSR 2008:I, p. 3
EC – Seal Products Appellate Body Reports, European Communities – Measures Prohibiting the
Importation and Marketing of Seal Products, WT/DS400/AB/R /
WT/DS401/AB/R, adopted 18 June 2014, DSR 2014:I, p. 7
EU – Energy Package Panel Report, European Union and its member States – Certain Measures
Relating to the Energy Sector, WT/DS476/R and Add.1, circulated to
WTO Members 10 August 2018 [appealed by the European Union
21 September 2018]
EU – Fatty Alcohols
(Indonesia)
Appellate Body Report, European Union – Anti-Dumping Measures on
Imports of Certain Fatty Alcohols from Indonesia, WT/DS442/AB/R and
Add.1, adopted 29 September 2017
EU – PET (Pakistan) Appellate Body Report, European Union – Countervailing Measures on
Certain Polyethylene Terephthalate from Pakistan, WT/DS486/AB/R and
Add.1, adopted 28 May 2018
EU – PET (Pakistan) Panel Report, European Union – Countervailing Measures on Certain
Polyethylene Terephthalate from Pakistan, WT/DS486/R, Add.1 and Corr.1,
adopted 28 May 2018, as modified by Appellate Body Report

Guatemala – Cement I Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding
Portland Cement from Mexico, WT/DS60/AB/R, adopted
25 November 1998, DSR 1998:IX, p. 3767

Short title Full case title and citation
India – Additional Import
Duties
Panel Report, India – Additional and Extra-Additional Duties on Imports
from the United States, WT/DS360/R, adopted 17 November 2008, as
reversed by Appellate Body Report WT/DS360/AB/R, DSR 2008:XX,
p. 8317
India – Agricultural Products Panel Report, India – Measures Concerning the Importation of Certain
Agricultural Products, WT/DS430/R and Add.1, adopted 19 June 2015, as
modified by Appellate Body Report WT/DS430/AB/R, DSR 2015:V, p. 2663
India – Autos Panel Report, India – Measures Affecting the Automotive Sector,
WT/DS146/R, WT/DS175/R, and Corr.1, adopted 5 April 2002,
DSR 2002:V, p. 1827
India – Quantitative
Restrictions
Panel Report, India – Quantitative Restrictions on Imports of Agricultural,
Textile and Industrial Products, WT/DS90/R, adopted 22 September 1999,
upheld by Appellate Body Report WT/DS90/AB/R, DSR 1999:V, p. 1799
Indonesia – Autos Panel Report, Indonesia – Certain Measures Affecting the Automobile
Industry, WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R, Corr.1 and
Corr.2, adopted 23 July 1998, and Corr.3 and Corr.4, DSR 1998:VI,
p. 2201
Indonesia – Iron or Steel
Products
Appellate Body Report, Indonesia – Safeguard on Certain Iron or Steel
Products, WT/DS490/AB/R, WT/DS496/AB/R, and Add.1, adopted
27 August 2018
Indonesia – Iron or Steel
Products
Panel Report, Indonesia – Safeguard on Certain Iron or Steel Products,
WT/DS490/R, WT/DS496/R, and Add.1, adopted 27 August 2018, as
modified by Appellate Body Report WT/DS490/AB/R, WT/DS496/AB/R
Japan – Alcoholic Beverages II Appellate Body Report, Japan – Taxes on Alcoholic Beverages,
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted
1 November 1996, DSR 1996:I, p. 97
Japan – Alcoholic Beverages II Panel Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/R,
WT/DS10/R, WT/DS11/R, adopted 1 November 1996, as modified by
Appellate Body Report WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R,
DSR 1996:I, p. 125
Japan – Apples (Article 21.5 –
US)
Panel Report, Japan – Measures Affecting the Importation of Apples –
Recourse to Article 21.5 of the DSU by the United States, WT/DS245/RW,
adopted 20 July 2005, DSR 2005:XVI, p. 7911
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports
of Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000,
DSR 2000:I, p. 3
Korea – Dairy Panel Report, Korea – Definitive Safeguard Measure on Imports of Certain
Dairy Products, WT/DS98/R and Corr.1, adopted 12 January 2000, as
modified by Appellate Body Report WT/DS98/AB/R, DSR 2000:I, p. 49
Mexico – Corn Syrup
(Article 21.5 – US)
Appellate Body Report, Mexico – Anti-Dumping Investigation of High
Fructose Corn Syrup (HFCS) from the United States – Recourse to
Article 21.5 of the DSU by the United States, WT/DS132/AB/RW, adopted
21 November 2001, DSR 2001:XIII, p. 6675
Mexico – Taxes on Soft Drinks Appellate Body Report, Mexico – Tax Measures on Soft Drinks and Other
Beverages, WT/DS308/AB/R, adopted 24 March 2006, DSR 2006:I, p. 3
Russia – Commercial Vehicles Appellate Body Report, Russia – Anti-Dumping Duties on Light Commercial
Vehicles from Germany and Italy, WT/DS479/AB/R and Add.1, adopted
9 April 2018
Russia – Commercial Vehicles Panel Report, Russia – Anti-Dumping Duties on Light Commercial Vehicles
from Germany and Italy, WT/DS479/R and Add.1, adopted 9 April 2018, as
modified by Appellate Body Report WT/DS479/AB/R
Russia – Pigs (EU) Panel Report, Russian Federation – Measures on the Importation of Live
Pigs, Pork and Other Pig Products from the European Union, WT/DS475/R
and Add.1, adopted 21 March 2017, as modified by Appellate Body Report

Thailand – Cigarettes
(Philippines)
Panel Report, Thailand – Customs and Fiscal Measures on Cigarettes from
the Philippines, WT/DS371/R, adopted 15 July 2011, as modified by
Appellate Body Report WT/DS371/AB/R, DSR 2011:IV, p. 2299

Short title Full case title and citation
Thailand – H-Beams Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and
Sections of Iron or Non-Alloy Steel and H-Beams from Poland,
WT/DS122/R, adopted 5 April 2001, as modified by Appellate Body Report
WT/DS122/AB/R, DSR 2001:VII, p. 2741
Turkey – Textiles Appellate Body Report, Turkey – Restrictions on Imports of Textile and
Clothing Products, WT/DS34/AB/R, adopted 19 November 1999,
DSR 1999:VI, p. 2345
Ukraine – Passenger Cars Panel Report, Ukraine – Definitive Safeguard Measures on Certain
Passenger Cars, WT/DS468/R and Add.1, adopted 20 July 2015,
DSR 2015:VI, p. 3117
US – 1916 Act Appellate Body Report, United States – Anti-Dumping Act of 1916,
WT/DS136/AB/R, WT/DS162/AB/R, adopted 26 September 2000,
DSR 2000:X, p. 4793
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain
Corrosion-Resistant Carbon Steel Flat Products from Germany,
WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX,
p. 3779
US – Certain EC Products Appellate Body Report, United States – Import Measures on Certain
Products from the European Communities, WT/DS165/AB/R, adopted
10 January 2001, DSR 2001:I, p. 373
US – Continued Suspension Panel Report, United States – Continued Suspension of Obligations in the
EC – Hormones Dispute, WT/DS320/R and Add.1 to Add.7, adopted
14 November 2008, as modified by Appellate Body Report
WT/DS320/AB/R, DSR 2008:XI, p. 3891
US – Corrosion-Resistant Steel
Sunset Review
Appellate Body Report, United States – Sunset Review of Anti-Dumping
Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan,
WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, p. 3
US – Cotton Yarn Appellate Body Report, United States – Transitional Safeguard Measure on
Combed Cotton Yarn from Pakistan, WT/DS192/AB/R, adopted
5 November 2001, DSR 2001:XII, p. 6027
US – Countervailing Measures
(China)
Appellate Body Report, United States – Countervailing Duty Measures on
Certain Products from China, WT/DS437/AB/R, adopted 16 January 2015,
DSR 2015:1, p. 7
US – FSC (Article 21.5 – EC) Appellate Body Report, United States – Tax Treatment for "Foreign Sales
Corporations" – Recourse to Article 21.5 of the DSU by the European
Communities, WT/DS108/AB/RW, adopted 29 January 2002, DSR 2002:I,
p. 55
US – Gasoline Appellate Body Report, United States – Standards for Reformulated and
Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I,
p. 3
US – Gasoline Panel Report, United States – Standards for Reformulated and
Conventional Gasoline, WT/DS2/R, adopted 20 May 1996, as modified by
Appellate Body Report WT/DS2/AB/R, DSR 1996:I, p. 29
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain
Hot-Rolled Steel Products from Japan, WT/DS184/AB/R, adopted
23 August 2001, DSR 2001:X, p. 4697
US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia,
WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX,
p. 4051
US – Lamb Panel Report, United States – Safeguard Measures on Imports of Fresh,
Chilled or Frozen Lamb Meat from New Zealand and Australia,
WT/DS177/R, WT/DS178/R, adopted 16 May 2001, as modified by
Appellate Body Report WT/DS177/AB/R, WT/DS178/AB/R, DSR 2001:IX,
p. 4107
US – Large Civil Aircraft
(2nd complaint)
Appellate Body Report, United States – Measures Affecting Trade in Large
Civil Aircraft (Second Complaint), WT/DS353/AB/R, adopted
23 March 2012, DSR 2012:I, p. 7
US – Large Civil Aircraft
(2nd complaint)
Panel Report, United States – Measures Affecting Trade in Large Civil
Aircraft (Second Complaint), WT/DS353/R, adopted 23 March 2012, as
modified by Appellate Body Report WT/DS353/AB/R, DSR 2012:II, p. 649

Short title Full case title and citation
US – Line Pipe Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Circular Welded Carbon Quality Line Pipe from Korea,
WT/DS202/AB/R, adopted 8 March 2002, DSR 2002:IV, p. 1403
US – Line Pipe Panel Report, United States – Definitive Safeguard Measures on Imports of
Circular Welded Carbon Quality Line Pipe from Korea, WT/DS202/R,
adopted 8 March 2002, as modified by Appellate Body Report
WT/DS202/AB/, DSR 2002:IV, p. 1473
US – Offset Act
(Byrd Amendment)
Appellate Body Report, United States – Continued Dumping and Subsidy
Offset Act of 2000, WT/DS217/AB/R, WT/DS234/AB/R, adopted
27 January 2003, DSR 2003:I, p. 375
US – Poultry (China) Panel Report, United States – Certain Measures Affecting Imports of
Poultry from China, WT/DS392/R, adopted 25 October 2010, DSR 2010:V,
p. 1909
US – Softwood Lumber IV Appellate Body Report, United States – Final Countervailing Duty
Determination with Respect to Certain Softwood Lumber from Canada,
WT/DS257/AB/R, adopted 17 February 2004, DSR 2004:II, p. 571
US – Steel Safeguards Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Certain Steel Products, WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R, adopted 10 December 2003,
DSR 2003:VII, p. 3117
US – Steel Safeguards Panel Reports, United States – Definitive Safeguard Measures on Imports
of Certain Steel Products, WT/DS248/R and Corr.1 / WT/DS249/R and
Corr.1 / WT/DS251/R and Corr.1 / WT/DS252/R and Corr.1 / WT/DS253/R
and Corr.1 / WT/DS254/R and Corr.1 / WT/DS258/R and Corr.1 /
WT/DS259/R and Corr.1, adopted 10 December 2003, as modified by
Appellate Body Report WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R, DSR 2003:VIII, p. 3273
US – Tyres (China) Appellate Body Report, United States – Measures Affecting Imports of
Certain Passenger Vehicle and Light Truck Tyres from China,
WT/DS399/AB/R, adopted 5 October 2011, DSR 2011:IX, p. 4811
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton,
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, p. 3
US – Wheat Gluten Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Wheat Gluten from the European Communities,
WT/DS166/AB/R, adopted 19 January 2001, DSR 2001:II, p. 717
US – Wheat Gluten Panel Report, United States – Definitive Safeguard Measures on Imports of
Wheat Gluten from the European Communities, WT/DS166/R, adopted
19 January 2001, as modified by Appellate Body Report WT/DS166/AB/R,
DSR 2001:III, p. 779
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of
Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted
23 May 1997, and Corr.1, DSR 1997:I, p. 323

EXHIBITS REFERRED TO IN THIS REPORT
Exhibit Short Title (if any) Description
JPN-1/IND-1 Customs Tariff Act Customs Tariff Act, 1975 (51 of 1975), as amended
(18 August 1975)
JPN-2/IND-2 Safeguard Rules Ministry of Finance (Department of Revenue), Notification
No. 35/97-NT-Customs, Customs Tariff (Identification and
Assessment of Safeguard Duty) Rules, 1997, Gazette of India,
Extraordinary, Part II, Section 3(i) (29 July 1997)
JPN-3/IND-3 Notification
No. 19/2016-Customs
(5 February 2016)
Ministry of Finance (Department of Revenue), Notification
No. 19/2016-Customs (N.T.), superseding Notification
No. 103/98-Customs, 14 December 1998, Gazette of India,
Extraordinary, Part II, Section 3(i) (5 February 2016)
JPN-4/IND-4 Notice of Initiation Directorate General of Safeguards Customs and Central Excise,
Notice of Initiation of a Safeguard Investigation concerning
imports of hot-rolled flat products of non-alloy and other alloy
steel in coils of a width of 600 mm or more, Gazette of India,
Extraordinary, Part II, Section 3(i) (7 September 2015)
JPN-5/IND-5 Application Petition for the initiation of safeguard investigation and
imposition of safeguard duty on imports of hot-rolled flat
products of alloy or non-alloy steel in coils (27 July 2015)
JPN-6/IND-20 Revised Application Petition for the initiation of safeguard investigation and
imposition of safeguard duty on imports of hot-rolled flat
products of alloy or non-alloy steel in coils (24 August 2015)
JPN-7/IND-7 Preliminary Findings Ministry of Finance, Director General (Safeguards),
Notification, Safeguard investigation concerning imports of
hot-rolled flat products of non-alloy and other alloy Steel in
coils of a width of 600 mm or more into India, Preliminary
Findings, Gazette of India, Extraordinary, Part II, Section 3(i)
(9 September 2015)
JPN-8/IND-8 Notification imposing a
provisional safeguard
measure
Ministry of Finance (Department of Revenue), Notification
No. 2/2015-Customs (SG), Gazette of India, Extraordinary,
Part II, Section 3(i) (14 September 2015)
JPN-9/IND-9 Notification
under Article 12.1(a)
of the SA
(15 September 2015)
WTO, Committee on Safeguards, Notification under
Article 12.1(a) of the Agreement on Safeguards on initiation of
an investigation and the reason for it: India (hot-rolled flat
products of non-alloy and other alloy steel in coils of a width of
600 mm or more), G/SG/N/6/IND/41 (15 September 2015)
JPN-10/IND-10 Notification under
Article 12.4 of the SA
(28 September 2015)
WTO, Committee on Safeguards, Notification under
Article 12.4 of the Agreement on Safeguards before taking a
provisional safeguard measure referred to in Article 6,
Notification pursuant to Article 9, footnote 2 of the Agreement
on Safeguards: India (hot-rolled flat products of non-alloy and
other alloy steel in coils of a width of 600 mm or more),
G/SG/N/7/IND/10-G/SG/N/11/IND/14 and

(28 September 2015)
JPN-11/IND-11 Final Findings Ministry of Finance (Department of Revenue), Notification,
Safeguard investigation concerning imports of hot-rolled flat
products of non-alloy and other alloy Steel in coils of a width of
600 mm or more into India, Final Findings, Gazette of India,
Extraordinary, Part II, Section 3(i) (15 March 2016)
JPN-12/IND-12 Notification under
Article 12.1(b) of the
SA (21 March 2016)
WTO, Committee on Safeguards, 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 (hot-rolled flat products of non-alloy and
other alloy steel in coils of a width of 600 mm or more),

G/SG/N/11/IND/14/Suppl.2 (21 March 2016)

Exhibit Short Title (if any) Description
JPN-13/IND-13 Notification imposing a
definitive safeguard
measure
Excerpt from Ministry of Finance (Department of Revenue),
Notification No. 1/2016-Customs (SG), Gazette of India,
Extraordinary, Part II, Section 3(i) (29 March 2016)
JPN-14/IND-14 Notification under
Article 12.1(b) and
Article 12.1(c) of the
SA (4 April 2016)
WTO, Committee on Safeguards, Notification under
Article 12.1(b) of the Agreement on Safeguards on finding
a serious injury or threat thereof caused by increased
imports; Notification pursuant to Article 12.1(c) of
the Agreement on Safeguards; Notification pursuant to
Article 9, footnote 2 of the Agreement on Safeguards:
India Supplement (hot-rolled flat products of non-alloy
and other alloy Steel in coils of a width of 600 mm or
more), G/SG/N/8/IND/28/Suppl.1-G/SG/N/10/IND/19/Suppl.1
-G/SG/N/11/IND/14/Suppl.3 (4 April 2016)
JPN-17/IND-17 Notification
No. 12/2012-Customs
(17 March 2012)
Ministry of Finance (Department of Revenue), Notification
No. 12/2012-Customs, Gazette of India, Extraordinary, Part II,
Section 3(i) (17 March 2012)
JPN-18/IND-18 Notification
No. 12/2014-Customs
(11 July 2014)
Ministry of Finance (Department of Revenue) Notification
No. 12/2014-Customs, Gazette of India, Extraordinary, Part II,
Section 3(i) (11 July 2014)
JPN-19/IND-19 Notification
No. 10/2015-Customs
(1 March 2015)
Ministry of Finance (Department of Revenue), Notification
No. 10/2015-Customs, Gazette of India, Extraordinary, Part II,
Section 3(i) (1 March 2015)
JPN-20/IND-6 Notification
No. 39/2015-Customs
(16 June 2015)
Ministry of Finance (Department of Revenue), Notification
No. 39/2015-Customs, Gazette of India, Extraordinary, Part II,
Section 3(i) (16 June 2015)
JPN-21/IND-16 Notification
No. 45/2015-Customs
(12 August 2015)
Ministry of Finance (Department of Revenue), Notification
No. 45/2015-Customs, Gazette of India, Extraordinary, Part II,
Section 3(i) (12 August 2015)
JPN-26 Excerpt from The Customs Act, 1962, Section 28
JPN-28 Excerpt from Schedule of Concessions XII – India
(15 March 2000)
IND-21 Excerpt from India's Schedule of Concessions with respect to
customs heading 7208

ABBREVIATIONS USED IN THIS REPORT
Abbreviation Description
API American Petroleum Institute
CEPA Comprehensive Economic Partnership Agreement
DSB Dispute Settlement Body
DI domestic industry
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
FTA free trade agreement
GATT 1994 General Agreement on Tariffs and Trade 1994
Indian competent authority Director General (Safeguards) of India's Ministry of Finance
INR Indian Rupees
MFN most-favoured nation
MT metric tonne
POI period of investigation
Vienna Convention Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969,
1155 UNTS 331; 8 International Legal Materials 679
WTO World Trade Organization

1 INTRODUCTION
1.1 Complaint by Japan
1.1. On 20 December 2016, Japan requested consultations with India pursuant to Articles 1 and 4
of the Understanding on Rule s and Procedures Governing the Settlement of Disputes (DSU) ,
Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994 ), and Article 14 of
the Agreement on Safeguards with respect to certain measures imposed by India on imports of iron
and steel products into India.1
1.2. Consultations were held on 6 and 7 February 2017 but failed to resolve the dispute.2
1.2 Panel establishment and composition
1.3. On 9 March 2017 , Japan requested the establishment of a panel pursuant to Article 6 of
the DSU, Article XXII:1 of the GATT 1994 and Article 14 of the Agreement on Safeguards, with
standard terms of reference. 3 At its meeting on 3 April 2017, the Dispute Settlement Body (DSB)
established a panel pursuant to the request of Japan in document WT/DS518/5, in accordance with
Article 6 of the DSU.4
1.4. The Panel's terms of reference are the following:
To examine, in the light of the relevant provisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by Japan in docu ment
WT/DS518/5 and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements.5
1.5. On 12 June 2017, Japan requested the Director-General to determine the composition of the
panel, purs uant to Article 8.7 of the DSU . On 22 June 2017 , the Director -General accordingly
composed the Panel as follows:
Chairperson: Mr Alexander Hugh McPhail

Members: Ms Enie Neri de Ross
 Ms Ana Teresa Caetano

1.6. Australia, China, the European Union, Indonesia, Kazakhstan, Korea, Oman, Qatar, the
Russian Federation (Russia), Singapore, the Separate Customs Territory of Taiwan, Penghu, Kinmen
and Matsu ( Chinese Taipei ), Ukraine, the United States and Viet Nam reserved their rights to
participate in the Panel proceedings as third parties.
1.3 Panel proceedings
1.7. After consultation with the parties, the Panel adopted its Working Procedures 6 and timetable
on 10 October 2017.
1.8. The Panel held a first substantive meeting with the parties on 31 January and 1 February 2018.
A session with the third parties took place on 1 February 2018. The Panel held a second substantive
meeting with the parties on 1 and 2 May 2018. On 3 July 2018, the Panel issued the descriptive part
of its Report to the parties. The Panel issued its Interim Report to the parties on 23 August 2018.
The Panel issued its Final Report to the parties on 11 October 2018.

1 Request for consultations by Japan, WT/DS518/1-G/L/1172-G/SG/D49/1 (Japan's consultations
request).
2 Request for the establishment of a panel by Japan, WT/DS518/5 (Japan's panel request).
3 Japan's panel request.
4 DSB, Minutes of meeting held on 3 April 2017, WT/DSB/M/395, pp. 3-4.
5 Constitution note of the Panel, WT/DS518/6.
6 See the Panel's Working Procedures in Annex A-1.

1.9. In these panel proceedings, certain filings were made outside of the deadlines prescribed by
the Working Procedures adopted by the Panel.7 The Panel stresses the importance of all parties and
third parties adhering to the time limits for filing documents, in the interests of fairness and the
orderly conduct of panel proceedings.
2 MEASURE AT ISSUE AND OTHER FACTUAL ASPECTS
2.1. This dispute concerns a safeguard measure imposed by I ndia with regard to imports of
hot-rolled flat products of non -alloy and other alloy steel in coils of a width of 600 mm or more
(product concerned). This measure was imposed following a safeguard investigation initiated on
7 September 2015 by the Director General (Safeguards) of India 's Ministry of Finance
(Indian competent authority).8
2.2. On 9 September 2015, the Indian competent authority issued its Preliminary Finding s.9 On
14 September 2015, the Ministry of Finance, after considering the Preliminary Findings, imposed a
provisional safeguard duty of 20% for 200 days.10
2.3. On 15 September 2015, India notified the WTO Committee on Safeguards, pursuant to
Article 12.1(a) of the Agreement on Safeguards, of the initiation of the safeguard investigation. 11
On 28 September 2015, India notified the Committee on Safeguards, pursuant to Article 12.4 and
Article 9, footnote 2, of the application of the provisional safeguard measure.12
2.4. On 15 March 2016, the Indian competent authority issued its Final Findings. 13 On
29 March 2016, after considering the Final Findings, the Ministry of Finance imposed a definitive
safeguard duty at the following rate (minus anti -dumping duties, if any): 20% from
14 September 2015 to 13 September 2016; 18% from 14 September 2016 to 13 March 2017;
15% from 14 March 2017 to 13 September 2017; and 10% from 14 September 2017 to
13 March 2018.14
2.5. On 21 March 2016, India notified the Committee on Safeguards, pursuant to Article 12.1(b),
of the findings of serious injury or threat thereof caused by increased imports. 15 On 4 April 2016,
India notified the Committee on Safeguards, pursuant to Article 12.1(c), of its decision to impose a
safeguard measure.16
3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1. Japan requests that the Panel find that the measure at issue is inconsistent with
India's obligations under the Agreement on Safeguards and the GATT 1994 . Specifically, Japan
requests the Panel to find that17:
a. India acted inconsistently with Article XIX:1(a) of the GATT 1994 because it failed t o
demonstrate the existence of " unforeseen developments" and a "logical connection"
between the unforeseen developments and the increase in imports causing or threatening
to cause serious injury to the domestic industry;
b. India acted inconsistently with Article XIX:1(a) of the GATT 1994 becau se it failed to
demonstrate a "logical connection" between the effect of the obligations incurred under

7 The Panel notes that India's questions to third parties were received the next working day following
the deadline specified by the Panel in accordance with paragraph 17(c) of the Panel's Working Procedures.
8 Notice of Initiation, (Exhibits JPN-4/IND-4).
9 Preliminary Findings, (Exhibits JPN-7/IND-7).
10 Notification imposing a provisional safeguard measure, (Exhibits JPN-8/IND-8).
11 Notification under Article 12.1(a) of the SA (15 September 2015), (Exhibits JPN-9/IND-9).
12 Notification under Article 12.4 of the SA (28 September 2015), (Exhibits JPN-10/IND-10).
13 Final Findings, (Exhibits JPN-11/IND-11).
14 Notification imposing a definitive safeguard measure, (Exhibits JPN-13/IND-13).
15 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12).
16 Notification under Articles 12.1(b) and 12.1(c) of the SA (4 April 2016), (Exhibits JPN-14/IND-14).

the GATT 1994 and the increase in imports causing or threatening to cause serious injury
to the domestic industry;
c. India acted inconsistently with Articles 2.1, 3.1, 4.2(a), and 4.2(c) of the Agreement on
Safeguards and Article XIX:1(a) of the GATT 1994 because it failed to determine th e
increase in imports as required by those provisions;
d. India acted inconsistently with Article 4.1(c) of the Agreement on Safeguards because it
failed to determine the domes tic industry constituting a "major proportion" of the total
domestic production and , consequently, acted inconsistently with Articles 2.1, 4.1(a),
4.1(b), 4.2(a), and 4.2(b) of the Agreement on Safeguards and Article XIX:1(a) of the
GATT 1994 with respect to its determination of whether the alleged increased imports
have caused or are threatening to cause serious injury to the domestic industry;
e. India acted inconsistently with Articles 2.1, 4.1(a), 4.1(b), and 4.2(a) of the Agreement
on Safeguards and Article XIX:1(a) of the GATT 1994 because it failed to determine serious
injury and threat thereof as required by those provisions;
f. India acted inconsistently with Articles 2.1, 4.2(a) , and 4.2(b) of the Agreement on
Safeguards and Article XIX:1(a) of the GATT 1994 because it failed to establish the
existence of a causal link between the alle ged increased imports and the alleged serious
injury and threat thereof to the domestic industry as well as failed to determine that the
alleged serious injury and threat thereof caused by factors other than the increased
imports was not attributed to increased imports;
g. India acted inconsistently with Articles 5.1 and 7.1 of the Agreement on Safeguards and
Article XIX:1(a) of the GATT 1994 because it failed to impose the safeguard measures only
to the extent and for such time as necessary to prevent or remedy serious injury;
h. India acted inconsistently with Articles 3.1 and 4.2(c) of the Agreement on Safeguards
because it failed to provide in the Preliminary Findings and the Final Findings, i.e. the
published report of the competent authority, its findings and reasoned conclusions reached
on all pertinent issues of fact and law and a detailed analysis of the case under
investigation as well as a demonstration of the relevance of the factors examined;
i. India acted inconsistently with Article 11.1(a) of the Agreement on Safeguards because it
imposed the safeguard measures in violation of Articles 2.1, 3.1, 4.1(a), 4.1(b), 4.1(c),
4.2(a), 4.2(b), 4.2(c), 5.1, and 7.1 of the Agreement on Safeguards as well as Article XIX
of the GATT 1994;
j. India acted inconsistently with Article 12.4 of the Agreement on Safeguards because it
failed to notify the Committee on Safeguards before taking the provisional safeguard
measure;
k. India acted inconsistently with Article 12.1 of the Agreement on Safeguards becau se it
failed to immediately notify the Committee on Safeguards upon initiating the investigation
relating to serious injury or threat thereof; making a finding of serious injury or threat
thereof caused by increased imports; and taking a decision to apply the safeguard
measure;
l. India acted inconsistently with Article 12.2 of the Agreement on Safeguards because, in
making the notifications pursuant to Articles 12.1(b) and 12.1(c), it failed to provide th e
Committee on Safeguards with "all pertinent information";
m. India acted inconsistently with Article 12.3 of the Agreement on Safeguards and
Article XIX:2 of the GATT 1994 because it failed to provide Japan with an adequate
opportunity for prior consultations in respect of the proposed action;
n. India acted incon sistently with Article II:1(b) of the GATT 1994 because, through the
measures at issue, India imposes " other duties or charges" in violation of the
second sentence of Article II:1(b) of the GATT 1994; and

o. India acted inconsistently with Article I:1 of the GATT 1994 because the measures at issue
are not applied to the products originating in certain countries and this constitutes an
advantage that has not been accorded immediately and unconditionally to like products
originating in other WTO Members, including Japan.
3.2. Japan further requests, pursuant to Article 19.1 of the DSU, that the Panel recommend that
India bring its measures into conformity with its WTO obligations by revoking its measures.18
3.3. India requests that the Panel reject Japan's claims in this dispute in their entirety.19
4 ARGUMENTS OF THE PARTIES
4.1. The arguments of the parties are reflected in their executive summaries, provided to the Panel
in accordance with paragraph 19 of the Working Procedures adopted by the Panel (see Annexes B-1,
B-2, B-3, and B-4).
5 ARGUMENTS OF THE THIRD PARTIES
5.1. The arguments of Australia, the European Union, Chinese Taipei, Ukraine, and the
United States are reflected in their executive summaries, provided in accordance with paragraph 20
of the Working Procedures adopted by the Panel (see Annexes C-1, C-2, C-3, C-4, and C-5). China,
Indonesia, Kazakhstan, Korea, Oman, Qatar, Russia, Singapore, and Viet Nam did not submit written
or oral arguments to the Panel.
6 INTERIM REVIEW
6.1. On 23 August 2018, we issued our Interim Report to the parties. On 11 September 2018, Japan
and India each submitted written requests for the Panel to review precise aspects of the
Interim Report. Neither party requested for an interim review meeting. On 25 September 2018, both
parties submitted comments on the other party's requests for review.
6.2. The parties' requests made at the interim review stage as well as the Panel 's discussion and
disposition of those requests are set out in Annex A-2.
7 FINDINGS
7.1 Introduction
7.1. This dispute concerns a measure ap plied by India on imports of certain steel products. Japan
claims that the measure is inconsistent with various provisions of the Agreement on Safeguards and
the GATT 1994. Before addressing Japan 's claims in this dispute, we first set out the relevant
principles guiding our review, including the relevant principles regarding standard of review, treaty
interpretation, and burden of proof in WTO dispute settlement proceedings. We then address
India's request that since the measure has expired, Japan 's complaint is not "fruitful" in terms of
Article 3.7 of the DSU. After that, we consider whether Article XIX of the GATT 1994 and the
Agreement on Safeguards are applicable to the present dispute.
7.2 General principles regarding standard of review, treaty interpretation, and burden of
proof
7.2.1 Standard of review
7.2. Panels are bound by the standard of review set forth in Article 11 of the DSU, which provides
that:
The function of panels is to assist the DSB in discharging its responsibilities under this
Understanding and th e covered agreements. Accordingly, a panel should make an
objective assessment of the matter before it, including an objective assessment of the

18 Japan's first written submission, paras. 537-538; second written submission, para. 288.

facts of the case and the applicability of and conformity with the relevant covered
agreements, and make such o ther findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in the covered agreements.
Panels should consult regularly with the parties to the dispute and give them adequate
opportunity to develop a mutually satisfactory solution.
7.3. The Agreement on Safeguards is silent as to the standard of review to be applied by panels in
reviewing the WTO-consistency of safeguard measures and the associated investigations. Previous
panel and Appellate Body reports have established that the general standard of review contained in
Article 11 of the DSU is applicable to disputes involving claims of violation of the Agreement on
Safeguards and Article XIX of the GATT 1994.20 In US – Cotton Yarn, the Appellate Body examined
the scope of this general rule provided in Article 11 regarding the standard of review applicable to
disputes under the Agreement on Safeguards and summarized its views as follows:
[P]anels must examine whether the competent aut hority has evaluated all relevant
factors; they must assess whether the competent authority has examined all the
pertinent facts and assessed whether an adequate explanation has been provided as to
how those facts support the determination; and they must a lso consider whether the
competent authority's explanation addresses fully the nature and complexities of the
data and responds to other plausible interpretations of the data. However, panels must
not conduct a de novo review of the evidence nor substitute their judgement for that of
the competent authority.21
7.4. Thus, a panel 's examination of a competent authority 's determination in a safeguard
proceeding must involve neither a de novo review nor "total deference" to the competent
authority's determination.22 Rather, a panel is required to assess whether the competent authority
has examined all relevant facts and provided a reasoned and adequate explanation as to how the
facts support its determination.23 A panel can make this assessment:
[O]nly if the panel critically examines that explanation, in depth, and in the light of the
facts before the panel. Panels must, therefore, review whether the competent
authorities' explanation fully addresses the nature, and, especially, the complexities, of
the data, and responds to other plausible interpretations of that data. A panel must find,
in particular, that an explanation is not reasoned, or is not adequate, if some alternative
explanation of the facts is plausible, and if the competent authorities' explanation does
not seem adequate in the light of that alternative explanation.24
7.5. Although this standard of review was articulated by the Appellate Body in the context of a claim
under Article 4.2(a) of the Agreement on Safeguards, the Appellate Body in US – Steel Safeguards
clarified that the same standard should be applied to other obligations under the Agreement on
Safeguards as well as to the obligations in Article XIX of the GATT 1994.25
7.6. A panel 's assessment of whether the competent authorities have complied with their
obligations under the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 should be
based on the relevant report published by the authorities. 26 Article 3.1, last sentence, r equires

20 See, e.g. Appellate Body Reports, Argentina – Footwear (EC), para. 120; and US – Lamb,
paras. 100-102; and Panel Report, Dominican Republic – Safeguard Measures, para. 7.4.
21 Appellate Body Report, US – Cotton Yarn, para. 74 (referring at paras. 71-73 to Appellate Body
22 Appellate Body Reports, US – Lamb, para. 101; US – Tyres (China), para. 123; US – Cotton Yarn,
23 Appellate Body Reports, US – Lamb, para. 103; US – Line Pipe, para. 217; and US – Steel
Safeguards, paras. 296-297.
24 Appellate Body Report, US – Lamb, para. 106. (emphasis original)
25 Appellate Body Report, US – Steel Safeguards, para. 276 (stating that "[O]ur finding in those cases
[such as US – Lamb] did not purport to address solely the standard of review that is appropriate for claims
arising under Article 4.2 of the Agreement on Safeguards. We see no reason not to apply the same standard
generally to the obligations under the Agreement on Safeguards as well as to the obligations in Article XIX of
the GATT 1994").
26 Panel Report, Ukraine – Passenger Cars, para. 7.26. (referring to Appellate Body Reports, US – Steel
Safeguards, para. 299; and US – Lamb, para. 105; and Panel Report, Dominican Republic – Safeguard
Measures, para. 7.9).

competent authorities to publish a report setting forth their findings and reasoned conclusions
reached on all pertinent issues of fact and law. Similarly, Article 4.2(c) requires competent
authorities to publish promptly, in accordance with the provisions of Article 3, a detailed analysis of
the case under investigation as well as a demonstration of the rel evance of the factors examined.
The panel in US – Steel Safeguards noted that:
It is precisely by "setting forth findings and reasoned conclusions on all pertinent issues
of fact and law", under Article 3.1, and by providing "a detailed analysis of the case
under investigation as well as a demonstration of the relevance of the factors
examined", under Article 4.2(c), that competent authorities pro vide panels with the
basis to "make an objective assessment of the matter before it" in accordance with
Article 11. … [A] panel may not conduct a de novo review of the evidence or substitute
its judgement for that of the competent authorities. Therefore, t he "reasoned
conclusions" and "detailed analysis" as well as "a demonstration of the relevance of the
factors examined" that are contained in the report of a competent authority, are the
only bases on which a panel may assess whether a competent authority has complied
with its obligations under the Agreement on Safeguards and Article XIX:1(a) of the
GATT 1994.27
7.7. Panels should not be "left to 'deduce for themselves ' from the report of that competent
authority the 'rationale for the determinations from the facts and data contained in the report of the
competent authority'". 28 The explanations contained in a competent authority 's published report
must be "explicit", "clear and unambiguous", and must not "merely imply or suggest an
explanation".29
7.8. Where there is no reasoned and adequate explanation apparent in the published report to
support a competent authority 's determinations "the panel has no option but to find that the
competent authority has not performed the analysis correctly". 30 This implies that reasoning,
analysis, and demonstrations provided after publication of the report – i.e. ex post explanations –
are irrelevant and cannot be relied upon to remedy any deficiencies of the competent
authorities' determinations.31
7.2.2 Treaty interpretation
7.9. Article 3.2 of the DSU provides that the WTO dispute settlement system serves to clarify the
existing provisions of the covered agreements "in accordance with customary rules of interpretation
of public international law". The principles codified in Articles 31 and 32 of the Vienna Convention
on the Law of Treaties are generally accepted as such customary rules.32
7.2.3 Burden of proof
7.10. The general principles applicable to the allocation of the burden of proof in WTO dispute
settlement require that a party claiming a violation of a provision of a WTO Agreement must assert
and prove its claim.33 Therefore, as the complaining party, Japan bears the burden of demonstrating
that the challenged measures are inconsistent with the Agree ment on Safeguards and the
GATT 1994. A complaining party will satisfy its burden when it establishes a prima facie case, namely
a case which, without effective refutation by the defending party, requires a panel, as a matter of
law, to rule in favour of the complaining party.34 Generally, each party asserting a fact shall provide
proof thereof.35

27 Appellate Body Report, US – Steel Safeguards, para. 299. (fn omitted)
28 Appellate Body Report, US – Steel Safeguards, para. 288.
29 Appellate Body Reports, US – Steel Safeguards, paras. 296-297; US – Line Pipe, para. 217.
30 Appellate Body Report, US – Steel Safeguards, para. 303.
31 Panel Report, Indonesia – Iron or Steel Products, para. 7.7.
32 Appellate Body Reports, US – Gasoline, DSR 1996:1, p. 16; Japan – Alcoholic Beverages II,
DSR 1996:1, p. 104, section D.
33 Appellate Body Report, US – Wool Shirts and Blouses, DSR 1197:1, p. 337.
34 Appellate Body Report, EC – Hormones, para. 104.
35 Appellate Body Report, US – Wool Shirts and Blouses, DSR 1197:1, p. 335.

7.3 Whether the Panel should make findings despite the expiry of the measure at issue
7.3.1 Introduction
7.11. The DSB established this Panel at its meeting on 3 April 2017 at the request of Japan. On
22 June 2017, the Director-General composed the Panel, pursuant to Article 8.7 of the DSU.36
7.12. The safeguard measure at issue in this dispute was imposed by the Indian Ministry of Finance
on 29 March 2016.37 According to the terms of the measure as published in the Gazette of India, the
duties resulting from the measure would be in force, at different rates and subject to a schedule of
progressive liberalization, until 13 March 2018.38 During the proceedings India declared that it had
no intention to extend the measure beyond the date of its expiration.39
7.13. Notwithstanding the expiration of the measure, in accordance with the relevant legislation if
a duty resulting from the safeguard measure w as not levied or was not paid for any reason other
than collusion, wilful misstatement , or suppression of facts, such duty may still be claimed within
two years from the date on which the customs officer made an order for the clearance of goods. In
case the duty was not levied or was not paid by reason of collusion, wilful misstatement , or
suppression of facts, such duty may be claimed within a period of five years.40
7.14. Considering that the measure at issue would only be in force until 13 March 2018, India has
requested the Panel to determine whether the panel procedure initiated by Japan complies with the
requirement in Article 3.7 of the DSU that "[b]efore bringing a case, a Member shall exercise its
judgement as to whether action under [the DSU] procedures would be fruitful". 41 India has added
that it does not have any intention to extend the measure beyond the date of its expiration.42 India
has also indicated that, in accordance with Article 7.5 of the Agreement on Safeguards, there is no
possibility for the safeguard measure to be easily reimposed by India on the same products
concerned.43 India notes that, in accordance with Article 3.7 of the DSU, in the absence of a mutually
agreed solution and if a measure is found to be inconsistent with provisions of the covered
agreements, the first objective of the dispute settlement mechanism is usually to secure the
withdrawal of the measure at issue. In India 's view, considering that the measure expired on
13 March 2018, "no useful purpose would be served if Japan pursues with its claims".44
7.15. Japan has asked the Panel to reject India 's request and to make findings and
recommendations with respect to the measure at issue, even if the measure has expired .45 Japan
has referred to the previous statements by the Appellate Body indicating that (i) a Member enjoys
broad discretion in deciding whether to bring a case against another Member under the DSU; (ii) the
language of Article 3.7 of the DSU suggests that Members are expected to be "largely
self-regulating" in deciding whether any action under the DSU procedures would be "fruitful"; and
(iii) Article 3.7 neither requir es nor authorizes a panel to look behind a Member 's decision and to
question its exercise of judgement.46 Japan has added that it has initiated these panel proceedings

36 See paras. 1.3-1.5 above.
37 Notification imposing a definitive safeguard measure, (Exhibits JPN-13/IND-13), pp. 6-7.
38 Notification imposing a definitive safeguard measure, (Exhibits JPN-13/IND-13), p. 6. See also
Japan's first written submission, paras. 42 and 416; and India's first written submission, para. 44.
39 India's second written submission, para. 2.
40 Excerpt from The Customs Act, 1962, Section 28, (Exhibit JPN-26). See also Japan's opening
statement at the second meeting of the Panel, para. 19 and fn 28; closing statement at the second meeting of
the Panel, para. 3; comments on India's response to Panel question No. 76; and India's response to Panel
question No. 76.
41 India's opening statement at the first meeting of the Panel, para. 45; second written submission,
para. 2.
42 India's second written submission, para. 2.
43 India's second written submission, paras. 5-6.
44 India's second written submission, para. 3. See also closing statement at the second meeting of the
Panel, paras. 1-2; and response to Panel question No. 71.
45 Japan's response to Panel question No. 13, para. 15; opening statement at the second meeting of the
Panel, para. 10.
46 Japan's response to Panel question No. 13, para. 8 (referring to Appellate Body Reports, EC –
Bananas III, para. 135; and Mexico – Corn Syrup (Article 21.5 – US), para. 74). See also opening statement at
the second meeting of the Panel, paras. 8-9.

in good faith.47 It has noted that the measure at issue was in force at the time of the establishment
of the Panel 48 and that Japan, as the complaining party, has continued to request that the Panel
make findings.49 Japan has further submitted that the dispute between the parties has not been
resolved, given that India continues to argue that the measure at issue is fully consistent with the
relevant provisions under the GATT 1994 and the Agreement on Safeguards. 50 Japan has also
highlighted the difference between the expiration of a measure (when the measure has lapsed) and
the revocation of a mea sure (recall or annulment of the measure). In Japan 's view, only the
revocation of the measure at issue, in which not only the measure itself but also any resulting effects
are removed from the legal system, would solve this dispute. 51 Regarding India 's argument on
Article 7.5 of the Agreement on Safeguards, Japan has noted that Article 7.5 does not prevent India
from imposing the measure after the time limit provided therein expires. 52 Finally, Japan has
emphasized the temporary nature of safeguard measures and argued that if panels refrained from
issuing findings and recommendations with respect to expired measures, it would mean that
Members may adopt WTO-inconsistent safeguard measures without a possibility for other Members
to effectively challenge those measures.53
7.3.2 Evaluation by the Panel
7.16. The terms of reference of this Panel are based on the description of the matter that was
referred to the DSB by Japan in its panel request of 9 March 2017. That panel request included the
specific measure at issue identified by Japan and the legal basis of Japan 's complaint (the claims).
When the DSB established this Panel on 3 April 2017, it outlined the Panel's jurisdiction to adjudicate
the matter that has been brought before us.54
7.17. Once a panel's jurisdiction is established, the panel is required to address the "matter" before
it in accordance with Article 11 of the DSU, which sets out the function of panels. We have already
noted the text of Article 11 of the DSU, which describes the function of panels as assisting the DSB
in discharging its responsibilities under the DSU and the covered agreements. To this end, "a panel
should make an objective assessment of the matter before it, including an objective assessment of
the facts of the case and the applicability of and conformity with the relevant covered agreements."
In addition, a panel should "make such other findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in the covered agreements". Accordingly,
panels carry out their adjudicative mandate, as set out in Article 11 of the DSU, so as to assist the
DSB in discharging its responsibilities under the DSU and the covered agreements.
7.18. WTO panels have certain powers that are inherent in their adjudicative function under
Article 11 of the DSU. For instance, panels have the authority to determine whether they have
jurisdiction in a given case and to determine the scope and limits of that jurisdiction, as defined by
their terms of reference. 55 Panels also have "a margin of discretion to deal, always in accordance
with due process, with specific situations that may arise in a particular case and that are not explicitly

47 Japan's response to Panel question No. 13, para. 9.
48 Japan's response to Panel question No. 13, para. 14; opening statement at the second meeting of the
Panel, paras. 11-12.
49 Japan's opening statement at the second meeting of the Panel, para. 12.
50 Japan notes that previous panels considered relevant the fact that the defending party argued its
measures to be consistent with its WTO obligations, when deciding whether they should make findings with
regard to expired measures. (Japan's opening statement at the second meeting of the Panel, para. 13
(referring to Panel Reports, EC – IT Products, para. 7.166; India – Additional Import Duties, paras. 7.69-7.70;
China – Publications and Audiovisual Products, para. 7.453; and US – Poultry (China), para. 7.55)).
51 Japan's response to Panel question No. 74, paras. 6-9.
52 Japan's opening statement at the second meeting of the Panel, para. 16. Japan added that India
failed to indicate the provision of the domestic legislation that prevents it from re-imposing safeguard
measures.
53 Japan's opening statement at the second meeting of the Panel, para. 16.
54 Appellate Body Reports, EU – PET (Pakistan), para. 5.13; US – Countervailing Measures (China),
55 Appellate Body Reports, EU – PET (Pakistan), para. 5.16; Mexico – Taxes on Soft Drinks, para. 45 and
fn 90 (referring to Appellate Body Reports, US – 1916 Act, fn 30; and Mexico – Corn Syrup (Article 21.5 – US),
paras. 36 and 53).

regulated".56 However, as noted by the Appellate Body in Mexico – Taxes on Soft Drinks , once
jurisdiction has been validly established, a WTO panel may not entirely decline to exercise that
jurisdiction in a case that is properly before it.57
7.19. In the present case, neither of the parties has questioned that the Panel has jurisdiction to
rule on the matter before it. We note in this respect that the measure at issue was in force at the
time of the establishment of the Panel58 and expired only during the Panel proceedings. As noted by
the panel on EU – PET (Pakistan), while some past panels have declined t o make findings with
respect to a measure that had expired before panel establishment, no panel has declined to hear
the entirety of a dispute due to the expiry of the challenged measure after panel establishment.59
Moreover, no issue has arisen that would indicate a legal impediment precluding the Panel from
ruling on the merits of the matter before us.60
7.20. Article 3.7 of the DSU, the provision cited by India, contemplates a "largely self-regulating"
mechanism by which each Member is to exercise its own judgement as to whether action under the
WTO dispute settlement procedures would be fruitful before bringing a matter through this system.61
In relevant part, Article 3.7 provides:
Before bringing a case, a Member shall e xercise its judgement as to whether action
under these procedures would be fruitful. The aim of the dispute settlement mechanism
is to secure a positive solution to a dispute. A solution mutually acceptable to the parties
to a dispute and consistent with t he covered agreements is clearly to be preferred. In
the absence of a mutually agreed solution, the first objective of the dispute settlement
mechanism is usually to secure the withdrawal of the measures concerned if these are
found to be inconsistent with the provisions of any of the covered agreements.
7.21. We must accordingly presume that when Japan submitted its panel request, it did so in good
faith, having duly exercised its judgement as to whether recourse to this panel process would be
"fruitful". As noted by the Appellate Body, "Article 3.7 neither requires nor authorizes a panel to look
behind that Member's decision and to question its exercise of judgement".62 The fact that a Member
may initiate a WTO dispute whenever it considers that any benefits accruing to it are being impaired
by measures taken by another Member, pursuant to Article 3.3 of the DSU, "implies that that
Member is entitled to a ruling by a WTO panel".63
7.22. The Appellate Body has noted that the mere fact that a measure has expired is not dispositive
of the question of whether a panel can add ress claims with respect to that measure.64 Although

56 Appellate Body Report, EU – PET (Pakistan), para. 5.16; Mexico – Taxes on Soft Drinks, para. 45 and
fn 91 (quoting Appellate Body Report, EC – Hormones, fn 138, referring in turn to Appellate Body Report, US –
FSC (Article 21.5 – EC), paras. 247-248).
57 Appellate Body Report, Mexico – Taxes on Soft Drinks, paras. 46 and 52-53.
58 The Appellate Body in EC – Chicken Cuts stated:
The term "specific measures at issue" in Article 6.2 suggests that, as a general rule, the measures
included in a panel's terms of reference must be measures that are in existence at the time of the
establishment of the panel.
(Appellate Body Report, EC – Chicken Cuts, para. 156).
59 Panel Report, EU – PET (Pakistan), para. 7.13 and fn 35 (referring to Panel Reports,
Dominican Republic – Import and Sale of Cigarettes, para. 7.343; Indonesia – Autos, para. 14.9; China –
Electronic Payment Services, para. 7.227; EC – Approval and Marketing of Biotech Products, paras. 7.1307
and 7.1308; US – Gasoline, para. 6.19; and Argentina – Textiles and Apparel, paras. 6.4 and 6.12-6.13).
60 In Mexico – Taxes on Soft Drinks, the Appellate Body noted that a decision by a panel to decline to
exercise validly established jurisdiction would seem to "diminish" the right of the complaining Member to "seek
the redress of a violation of obligations" within the meaning of Article 23 of the DSU. The Appellate Body,
however, cautioned that it was "[m]indful of the precise scope of Mexico's appeal", and that it expressed "no
view as to whether there may be other circumstances in which legal impediments could exist that would
preclude a panel from ruling on the merits of the claims that are before it." (Appellate Body Report, Mexico –
Taxes on Soft Drinks, paras. 53-54).
61 Appellate Body Report, EU – Fatty Alcohols (Indonesia), para. 5.179 (referring to Appellate Body
62 Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US), para. 74.
63 Appellate Body Report, Mexico – Taxes on Soft Drinks, para. 52. (emphasis omitted)
64 Appellate Body Reports, EU – PET (Pakistan), para. 5.25; EU – Fatty Alcohols (Indonesia),
para. 5.179 (referring to Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II) / EC –

Article 12.7 of the DSU provides that when the parties to a dispute arrive at a mutually satisfactory
solution a panel should refrain from ruling on the merits of the claims before it, the repeal or expiry
of a measure does not necessarily constitute, without more, a "satisfactory settlement of the matter"
within the meaning of Article 3.4, or a "positive solution to the dispute" within the meaning of
Article 3.7.65
7.23. We note India's argument that, due to its expiration, it would not be possible to "withdraw"
the challenged measure within the meaning of Article 3.7 of the DSU, if it is found to be inconsistent
with provisions of the covered agreements. We also note that even after the measure at issue expired
on 13 March 2018, there are potential lingering effects of the measure with respect to imports that
occurred before that date. Indeed, as noted above, if a duty resulting from the safeguard measure
was not levied or was not paid for any reason , such duty may still be claimed within a period of
two years (or even for a period of five years if the duty was not levied or was not paid by reason of
collusion, wilful misstatement, or suppression of facts).66
7.24. We have already noted that the measure at issue was in force at the time when this Panel
was established and expired only during the Panel proceedings. Moreover, as noted above, Japan
has continued to request the Panel to make findings with respect to the measure at issue despite its
expiry. The Appellate Body has noted that, pursuant to Articles 3.3 and 3.7 of the DSU, a complaining
Member's continued request for findings following the expiry of a measure at issue is a
relevant consideration for a panel in deciding whether to proceed to make findings in a dispute.67
Despite the expiry of the measure, there continues to exist a dispute between the parties on the
"applicability of and conformity with the relevant covered agreements" 68 as regards the Indian
competent authority's findings underpinning the measure at issue. Therefore, the "matter" within
the jurisdiction of the Panel has not been fully resolved by the expiry of the measure. Finally, as
indicated, despite the termination of the measure at issue there are potential lingering effects of the
measure with respect to imports that occurred before that date.
7.25. For the reasons indicated, in the circumstances of the present case, the expiry of the measure
at issue after the Panel was established 69 does not excuse us from exercising our function under
Article 11 of the DSU to make findings with respect to the matter raised by Japan.
7.26. Finally, we note that Japan has also asked the Panel to make recommendations with respect
to the measure at issue, even if the measure has expired.
7.27. Article 19 of the DSU is entitled " Panel and Appellate Body Recommendations ". In relevant
part it provides in paragraph 1 that "[w] here a panel … concludes that a measure is inconsistent
with a covered agreement, it shall recommend tha t the Member concerned bring the measure into
conformity with that agreement".70 Despite what Article 19.1 provides, panels generally refrain from
making recommendations on measures found to be inconsistent with provisions of the covered
agreements when these measure are no longer in existence.71 Having said that, to the extent that
an expired measure may continue to have an effect on the operation of a covered agreement, it
would be appropriate for a panel to provide recommendations with regard to the measures at issue.72
7.28. We have already noted that, despite the expiry of the measure at issue, there are potential
lingering effects of the measure with respect to imports that occurred before that date. Accordingly,

65 Appellate Body Reports, EU – PET (Pakistan), para. 5.27; EU – Fatty Alcohols (Indonesia),
66 Excerpt from the Customs Act, 1962, Section 28, (Exhibit JPN-26). Japan has noted that a resolution
of the current dispute would require, not just the termination of the measure at issue itself, but also of any
legal effects that may survive after the measure has expired. (Japan's response to Panel question No. 74,
paras. 6-9).
67 Appellate Body Report, EU – PET (Pakistan), para. 5.42.
68 Article 11 of the DSU.
69 Appellate Body Report, EU – Fatty Alcohols (Indonesia), para. 5.179.
70 Fn omitted.
71 See, for example, Appellate Body Reports, US – Certain EC Products, paras. 81-82; and China – Raw
Materials, para. 264. See also Panel Reports, US – Large Civil Aircraft (2nd complaint), paras. 8.6-8.7; and EC –
Approval and Marketing of Biotech Products, para. 7.1316.
72 See, for example, Appellate Body Report, US – Upland Cotton, paras. 271-273; and Panel Reports,
Thailand – Cigarettes (Philippines), paras. 6.25 and 8.8; and India – Autos, paras. 8.47, 8.51, 8.60, and 8.65.

in the circumstances of the present case, it is appropriate for the Panel to provide recommendations
with regard to the measure at issue to the extent that there may continue to be effects with respect
to imports occurred when the measure was in force.
7.4 Whether Article XIX of the GATT 1994 and the Agreem ent on Safeguards are
applicable to the present dispute
7.4.1 Introduction
7.29. We recall that Article 11 of the DSU sets out panels' standard of review, and provides that "a
panel should make an objective assessment of the matter before it", which includes, among others,
an assessment of the "applicability" of the relevant covered agreements.73
7.30. In this dispute, most of the claims have been raised by Japan under Article XIX of the
GATT 1994 and under different provisions of the Agreement on Safeguards . The parties have not
questioned the applicability of Article XIX of the GATT 1994 or the Agreement on Safeguards to the
dispute. Indeed, both parties agree that the challenged measure is a safeguard within the meaning
of Article XIX:1(a) of the GATT 1994 and the Agreement on Safeguards.74 However, given the facts
before us and the arguments made by the parties and third parties in this proceeding75, we consider
it appropriate to examine whether the measure at issue falls within the scope of the Agreement on
Safeguards and Article XIX of the GATT 1994 , before addressing the merits of Japan 's claims.
Indeed, as noted by the Appellate Body:
[A] panel is not only entitled, but indeed required, under Article 11 of the DSU to carry
out an independent and objective assessment of the applicability of the provisions of
the covered agreements invoked by a complainant as the basis for its claims, regardless
of whether such applicability has been disputed by the parties to the dispute.76
7.31. According to Article 1 of the Agreement on Safeguards, this agreement contains rules "for the
application of safeguard measures which shall be understood to mean those measures provided for
in Article XIX of GATT 1994".
7.32. Article XIX of GATT 1994 is entitled "Emergency Action on Imports of Particular Products" and
provides in paragraph 1(a) as follows:
If, as a result of unforeseen developments and of the effect of the obligations incurred
by a [Member] under this Agreement, including tariff concessions, any product is being
imported into the territory of that [Member] in such increased quantities and under such
conditions as to cause or threaten serious injury to domestic producers in that territory
of like or directly competitive products, the [Member] shall be free, in respect of such
product, and to the extent and for such time as may be necessary to prevent or remedy
such injury, to suspend the obligation in whole or in part or to withdraw or modify the
concession.77
7.33. In other words, Article XIX:1(a) of the GATT 1994 and the Agreement on Safeguards refer to
emergency measures adopted by a Member, which suspend obligations under the GATT 1994
(including tariff concessions ), when unforeseen developments and the effect of such

73 In this respect the Appellate Body has noted that: "the 'fundamental structure and logic' of a covered
agreement may require panels to determine whether a measure falls within the scope of a particular provision
or covered agreement before proceeding to assess the consistency of the measure with the substantive
obligations imposed under that provision or covered agreement". (Appellate Body Reports, China – Auto Parts,
para. 139 (emphasis original)).
74 Japan's second written submission, paras. 278-279; response to Panel question No.11;
India's response to Panel question No.11; and opening statement at the second meeting of the Panel,
paras. 5-6. See also paras. 7.44, 7.54, and 7.64 below.
75 Australia's third-party submission, paras. 5-15; third-party response to Panel question No. 3,
paras. 3.1-3.4; European Union's third-party submission, paras. 7-26; third-party statement, paras. 3-19; and
third-party response to Panel question No. 5, paras. 19-20. See also Chinese Taipei's third-party statement,
paras. 5-13; and third-party response to Panel question No. 5, para. 11.
76 Appellate Body Report, Indonesia – Iron or Steel Products, para. 5.33.
77 Emphasis added.

GATT obligations have resulted in an increase in imports that causes or threatens to cause serious
injury to the relevant domestic producers. Article XIX:1(a) and the Agreement on Safeguards allow
WTO Members to impose a measure that would otherwise be inconsistent with its GATT obligations,
provided that the conditions for the application of such a measure are met.78 Such measures are to
be applied temporarily, and subject to a schedule of progressive liberalization, so as to prevent or
remedy serious injury caused by increased imports to the domestic producers of like or directly
competitive products. Article 11 of the Agreement on Safeguards refers to the measures applied
under Article XIX of the GATT 1994 as "emergency actions on imports of particular products ", the
same expression contained in the title of Article XIX. In this regard, the Appellate Body has stated
that "safeguard measures were intended by the drafters of the GATT to be matters out of the
ordinary, to be matters of urgency, to be, in short, 'emergency actions'".79
7.34. The Appellate Body has further clarified that:
[I]n order to constitute one of the "measures provided for in Article XIX", a measure
must present certain constituent features, absent which it could not be considered a
safeguard measure. Fir st, that measure must suspend, in whole or in part, a
GATT obligation or withdraw or modify a GATT concession. Second, the suspension,
withdrawal, or modification in question must be designed to prevent or remedy serious
injury to the Member's domestic industry caused or threatened by increased imports of
the subject product. In order to determine whether a measure presents such features,
a panel is called upon to assess the design, structure, and expected operation of the
measure as a whole.80
7.4.2 Whether the measure at issue constitutes an ordinary customs duty
7.35. As part of our assessment of the design, structure, and operation of the measure at issue, we
start by considering the argument raised by some third parties that the measure adopted by India
constitutes an ordinary customs duty. Indeed, in response to a question posed by the Panel, the
European Union has argued that "the safeguard duties imposed in this case are 'ordinary customs
duties' within the meaning of Article II:1 of the GATT 1994 ".81 The European Union concludes that
the measure at issue "did not suspend, withdraw, or modify India 's obligations under Article II of
the GATT 1994". 82 Similarly, Australia has argued that the measure at issue did not withdraw or
modify India's tariff concession of 40% recorded in its Schedule of Concessions.83
7.36. Article II:1(b) of the GATT 1994 provides as follows:
The products described in Part I of the Schedule relating to any [Member], which are
the products of te rritories of other [Members], shall, on their importation into the
territory to which the Schedule relates, and subject to the terms, conditions or
qualifications set forth in that Schedule, be exempt from ordinary customs duties in
excess of those set forth and provided therein. Such products shall also be exempt from
all other duties or charges of any kind imposed on or in connection with the importation
in excess of those imposed on the date of this Agreement or those directly and
mandatorily required to be imposed thereafter by le gislation in force in the importing
territory on that date.
7.37. India has bound in its Schedule of Concessions its ordinary customs duties (tariffs) for the
products at issue in this dispute, i.e. hot-rolled flat products of non -alloy and other alloy steel in
coils of a width of 600 mm or more (product concerned), classified under tariff heading 7208 and
tariff item 7225.30.90, at a level of 40% ad valorem .84 During the period of application of the

78 Panel Reports, US – Steel Safeguards, para. 10.9.
79 Appellate Body Report, Korea – Dairy, para. 86.
80 Appellate Body Report, Indonesia – Iron or Steel Products, para. 5.60.
81 European Union's third-party response to Panel question No. 2, para. 11.
82 European Union's third-party submission, para. 22.
83 Australia's response to Panel question No. 3.
84 Schedule of Concessions XII – India, annexed to the Marrakesh Protocol, available at:
https://www.wto.org/english/tratop_e/schedules_e/goods_schedules_table_e.htm (accessed 15 July 2018);
Excerpt from India's Schedule of Concessions with respect to customs heading 7208, (Exhibit IND-21); and
Excerpt from Schedule of Concessions XII – India (15 March 2000), (Exhibit JPN-28).

measure at issue, the applied tariffs for the products concerned were 10 or 12.5% ad valorem.85, 86
In turn, the maximum amount of the duty imposed, pursuant to the safeguard at issue in the present
dispute, was 20% ad valorem.87 As a result, during the time when the measure at issue was in force,
the duties imposed on the importation of the products concerned, including the duties resulting from
the measure and the regular tariff , did not exceed 32.5% ad valorem . In other words, even
considering both the measure at issue and the applicable tariff, the total import duties on the product
concerned did not exceed India's 40% bound rate of ordinary customs duties.
7.38. The fact that the measure at issue did not result in total duties on the importation of the
product concerned that exceeded the rate bound by India in its Schedule of Concessions, however,
does not necessarily imply that the duties resulting from the measure had the nature of an ordinary
customs duty.
7.39. As the panel in Dominican Republic – Safeguard Measures noted, while a Member may impose
various duties at the border, ordinary customs duties are those that possess the essential attributes
or qualities of customs duties.88 The panel indicated that "the expression 'ordinary customs duties' in
Article II:1(b) of the GATT 1994 refers to duties collected at the border which constitute 'customs
duties' in the strict sense of the term (stricto sensu) and … does not cover possible extraordinary or
exceptional duties collected in customs".89 The panel in that case considered the design and structure
of the measures concerned.
7.40. We are aware that the manner in which a Member 's domestic law characterizes its own
measures is not dispositive of the characterization of such measures under WTO law.90 At the same
time, the operation of measures under domestic law may be a useful starting point when ascertaining
a measure 's design, structure, and operation . As explained by India, customs duties on the
importation of products are approved through legislation.91 India has indicated that:
The relevant domestic legislation governing "ordinary customs du ties" is the
Customs Act, 1962.
The procedure for amending the relevant domestic legislation governing "ordinary
customs duties" i.e. the Customs Act, 1962 is through an Act of Parliament. While the
power to levy of " ordinary customs du ties" flows from section 12 of the Customs
Act, 1962, the "rate of duty" is set out under the Customs Tariff Act, 1975.92
7.41. In contrast, India 's domestic legislation on safeguards is contained in Section 8B of the
Customs Tariff Act, 1975 , and in the Customs Tariff (Identification and Assessment of Safeguard
Duty) Rules, 1997.93 The measure at issue was imposed by India 's Ministry of Finance pursuant to
this legislation that authorizes the Central Government "after conducting such enquiry as it deems

85 India's response to Panel question No. 79; first written submission, para. 49; and Japan's first written
submission, para. 48 (referring to Notification No. 10/2015-Customs (1 March 2015), (Exhibit JPN-19);
Notification No. 39/2015-Customs (16 June 2015), (Exhibit JPN-20); and Notification No. 45/2015-Customs
(12 August 2015), (Exhibit JPN-21)).
86 During the POI, the applied tariff for the product concerned was primarily 7.5%. (Final Findings,
(Exhibits JPN-11/IND-11), para. 81, p. 205). See also India's first written submission, para. 49; and
Japan's first written submission, para. 48 (referring to Notification No. 12/2012-Customs (17 March 2012),
(Exhibit JPN-17); and Notification No. 12/2014-Customs (11 July 2014), (Exhibit JPN-18)).
87 The safeguard duty at issue was imposed on imports of the product concerned at the following rate:
(i) 20% from 14 September 2015 to 13 September 2016, (ii) 18% from 14 September 2016 to 13 March 2017,
(iii) 15% from 14 March 2017 to 13 September 2017, and (iv) 10% from 14 September 2017 to 13
March 2018. (Final Findings, (Exhibits JPN-11/IND-11), p. 209).
88 Panel Report, Dominican Republic – Safeguard Measures, para. 7.82.
89 Panel Report, Dominican Republic – Safeguard Measures, para. 7.85.
90 Appellate Body Reports, China – Auto Parts, para. 178. See also Appellate Body Report, Indonesia –
Iron or Steel Products, para. 5.60 (referring to Appellate Body Reports, US – Large Civil Aircraft
(2nd complaint), paras. 586 and 593; US – Offset Act (Byrd Amendment), para. 259; US – Softwood
Lumber IV, para. 56; US – Corrosion-Resistant Steel Sunset Review, fn 87; Canada – Renewable Energy /
Canada – Feed-in Tariff Program, para. 5.127).
91 India's response to Panel question No. 12. See Customs Tariff Act, (Exhibits JPN-1/IND-1), Section 2,
p. 2. See also ibid. Sections 6-7, pp. 8-9.
92 India's response to Panel question No. 81.
93 Customs Tariff Act, (Exhibits JPN-1/IND-1); Safeguard Rules, (Exhibits JPN-2/IND-2).

fit, [when it] is satisfied that any article is imported into India in such increased quantities and under
such conditions so as to cause or threatening to cause serious injury to domestic industry … by
notification in the Official Gazette [to] impose a safeguard duty on that article".94
7.42. The measure at issue resulted in duties levied in customs on the importation of the products
concerned into the territory of India. These duties operated similarly to an ordinary customs duty.
However, by its design and structure, the measure at issue and the duties that resulted from its
application were different from an ordinary customs duty. As noted above, the legal basis in Indian
domestic legislation under which the measure at issue was applied is different from that w hich
regulates the imposition of tariffs on imports. Moreover, as described in the decision adopted o n
29 March 2016 by the Ministry of Finance, the definitive safeguard measure was imposed for a period
of thirty months (two and a half years, from 14 September 2015 to 13 March 2018). During this
period, the duties resulting from the measure were subject to progressive reductions, according to
a schedule contained in the same Ministry of Finance decision. As noted in the same decision by the
Ministry of Fina nce, the measure was imposed on the basis of a conclusion from the national
competent authority that "[t]he increased imports of [the product under consideration] into India,
[had] caused serious injury and [were] threatening to cause serious injuries to the domestic
producers of [the product under consideration] and [that] it [would] be in the public inter est to
impose safeguard duty on imports of [the product under consideration] into India … in terms of
Rule 12 of the Customs Tariff (I dentification And Assessment of Safeguard Duty) Rules '97, for a
period of two Years and Six months".95 In other words, the measure at issue was an "extraordinary"
or "exceptional" instrument and not an "ordinary" one.
7.43. The duties resulting from the measure at issu e did not replace the normal tariffs applied to
imports. Indeed, the applicable legislation in India provides that "[t]he duty chargeable under this
section [i.e. Section 8B on safeguard measures] shall be in addition to any other duty imposed under
this Act or under any other law for the time being in force".96 In other words, the measure at issue
did not constitute the ordinary tariff that is normally applicable to the importation of the product
concerned into the territory of India under the Customs Act, 1962. Instead, the measure at issue
constituted an emergency action under specific legislation, that resulted in temporary duties ("other
duties or charges") applied on the importation of goods originating from certain countries, and that
was adopted by the Indian competent authority to protect domestic production from the alleged
injury caused by increased imports of the subject product. In conclusion, the measure at issue does
not possess the essential attributes or qu alities of ordinary customs duties. By their design ,
structure, and operation, the duties resulting from this measure do not constitute "ordinary customs
duties" for the purposes of Article II:1(b) of the GATT 1994.
7.4.3 Whether the measure at issue resulted in the suspension of a GATT obligation
7.44. We now turn to the argument raised by some third parties that the measure at issue did not
suspend India's obligations under the GATT 1994.97 In contrast, the complainant and the respondent
are of the view that the duties resulting from the measure at issue resulted in a suspension of some
obligations under the GATT 1994. Indeed, both parties assert that the measure at issue suspended
India's obligation under Article II:1(b), second sentence, of the GATT 1994 with regard to "all other
duties or charges of any kind" .98 Both parties also argue that the measure suspended
India's most-favoured nation (MFN) obligation under Article I:1 of the GATT 1994.99 India

94 Customs Tariff Act, (Exhibits JPN-1/IND-1), Section 8B, pp. 10-11. See also Safeguard Rules,
(Exhibits JPN-2/IND-2), p. 9.
95 Final Findings, (Exhibits JPN-11/IND-11), section R, p. 208. See also Notification imposing a definitive
safeguard measure, (Exhibits JPN-13/IND-13), p. 5.
96 Customs Tariff Act, (Exhibits JPN-1/IND-1), Section 8B(3), pp. 10-11.
97 Australia's third-party submission, para. 15; third-party response to Panel question No. 3,
paras. 3.1-3.4; European Union's third-party submission, paras. 22-23 and 25; and third-party statement,
paras. 8-17.
98 Japan's response to Panel question No. 11, para. 4; second written submission, paras. 279-283;
India's first written submission, para. 344; opening statement at the first meeting of the Panel, para. 44;
responses to Panel question No. 11(a) and No. 91; and opening statement at the second meeting of the Panel,
paras. 5-6.
99 Japan's responses to Panel question No. 11, para. 5, and No. 80, paras. 19-23; second written
submission, paras. 279 and 284-285; India's responses to Panel question Nos. 11(a), 80, 83, and 91; and
opening statement at the second meeting of the Panel, paras. 5-6.

additionally asserts that the measure also suspend ed India's obligations under paragraphs 4, 8,
and 12 of Article XXIV of the GATT 1994. 100 Japan disagrees that the measure resulted in a
suspension of obligations under Article XXIV of the GATT 1994.101
7.45. We recall in this regard the Appellate Body's indication that one of the constituent features of
a safeguard is that the measure suspends, in whole or in part, a GATT obligation (or withdraws or
modifies a GATT concession).102 Moreover, for a measure to be a safeguard, the suspension of the
relevant GATT obligation or the wi thdrawal or modification of a tariff concession must be done to
pursue a specific objective, namely preventing or remedying serious injury to the Member's domestic
industry.103 We will accordingly consider the specific GATT obligations that India allegedly suspended
by applying the measure at issue.
7.4.3.1 Article II:1(b) of the GATT 1994
7.46. We have noted above the text of Article II:1(b) of the GATT 1994. The first sentence of this
provision prohibits levying of ordinary customs duties in excess of the bindings set fo rth in the
schedule of concessions of the importing Member. The second sentence of Article II:1(b) prohibits
the levying of "other duties or charges of any kind" imposed on or in connection with importation in
excess of those imposed on the date of entry i nto force of the GATT 1994 or those directly and
mandatorily required to be imposed thereafter by legislation in force in the importing Member on
that date. The Understanding on the Interpretation of Article II:1(b) of the General Agreement on
Tariffs and Trade 1994 provides that the importing Member had to record in its schedule of
concessions any other duties or charges applied on the date of entry into force of the GATT 1994 or
which had to be applied directly and mandatorily under legislation in force on that date.
7.47. Article II:2 contains a list of measures which are carved out from the obligation in
Article II:1(b) and may be imposed on the importation of any product, which include s (i) charges
equivalent to internal taxes levied on like domestic products or in respect of articles from which the
imported product has been manufactured; (ii) anti-dumping or countervailing duties; and (iii) fees
or other charges commensurate with the cost of services rendered. Safeguard measures or the
duties resulting from such safeguard measures are not carved out by Article II:2 from the obligations
in Article II:1(b).
7.48. As stated by the panel on Dominican Republic – Safeguard Measures:
The use of the expression " all other duties or charges of any kind imposed on or in
connection with the importation" in Article II:1(b), second sentence, suggests that the
prohibition covers any duty or charge of any kind on or in connection with the
importation that is not an ordinary customs duty. [146] In other words, the category of
other du ties or charges under Article II:1(b), second sentence, is a residual one
covering all duties or charges on or in connection with the importation that are not
ordinary customs duties and which are not expressly provided for in Article II:2 of the
GATT 1994.104
146 Save for certain exceptions, such as duties or charges applied or mandatorily required to be
applied on the date of the agreement. See in this connection the provisions of the Understanding
on the Interpretation of Article II:1(b) of the General Agreement on Tariffs and Trade 1994.
7.49. We have already concluded that the duties resulting from the measure at issue do not
constitute "ordinary customs duties" in the sense of Article II:1(b) of the GATT 1994. We also note
that those duties do not correspond to any of the measures listed in Article II:2 of the GATT 1994.
To the extent that those duties were imposed on imports of the product concerned into the territory

100 India's first written submission; para. 117; responses to Panel question Nos. 11(a), 20, 86, and 91;
and opening statement at the second meeting of the Panel, paras. 5-6 and 8.
101 Japan's second written submission, para. 286; comments on India's responses to Panel question
102 Appellate Body Report, Indonesia – Iron or Steel Products, para. 5.60.
103 Appellate Body Report, Indonesia – Iron or Steel Products, para. 5.56.
104 Panel Report, Dominican Republic – Safeguard Measures, para. 7.79. (emphasis original; some
fns omitted)

of India, they constituted " other duties or charges … imposed on or in connection with …
importation". We also note that the measures at issue are not recorded in India 's Schedule of
Concessions as other duties or charges that were applied on the date of entry into force of the
GATT 1994 or which had to be applied directly and mandatorily under legislation in force on that
date.105 Consequently, the imposition of the duties resulting from the measure at issue to imports
of the product concerned into the territory of India constituted a suspension of India 's obligations
under Article II:1(b), second sentence, of the GATT 1994.
7.50. The remaining question is whether the duties imposed by India, which resulted in a suspension
of Article II:1(b) of the GATT 1994 , were adopted to prevent or remedy serious injury to
India's domestic production. Again, the sta rting point is the manner in which India itself has
characterized the measure at issue.
7.51. As noted above, the measure at issue was imposed by India's Ministry of Finance pursuant to
legislation that authorizes the Central Government to impose safeguard dutie s when it is satisfied
that products are imported into India in such increased quantities and under such conditio ns so as
to cause or threaten to cause serious injury to domestic ind ustry.106 Moreover, as described in the
Ministry of Finance 's decision o f 29 March 2016 adopting the definitive safeguard measure, th is
measure was imposed on the basis of a conclusion from the national competent authority that t he
increased imports of the product concerned into India had caused serious injury and were
threatening to cause serious injury to the domestic producers of the product concerned.107
7.52. The design, structure, and operation of the measure at issue confirm this aspect. The measure
resulted in the imposition by the Indian Government of temporary duties on the im portation of the
subject products of up to 20% ad valorem, additional to the applicable tariffs.108 The level and form
of the duties corresponded to the recommendation made by the Indian competent authority, which
was based in turn on its estimation of "the minimum required to protect the interests of the domestic
industry", by considering the average cost of sales by the domestic producer of the product
concerned, after allowing a reasonable return.109 The Indian competent authority also noted that the
domestic industry had submitted "detailed adjustment plans… which [focused] on cost reduction,
optimum utilization and expansion of production capacities which will enable them to adjust to the
international competition".110 The design, structure, and operation of the measure at issue suggest
to us that the central aspect of that measure is the imposition of specific duties through which India
sought to remedy an alleged serious injury to its domestic industry and to prevent a threat of further
serious injury.
7.53. Accordingly, we find that the suspension of Article II:1(b) of the GATT 1994 by India was
designed to prevent or remedy serious injury to India's domestic production.
7.4.3.2 Article I:1 of the GATT 1994
7.54. Japan and India consider that the challenged measure also suspended India's MFN obligation
under Article I:1 of the GATT 1994, because India excluded certain developing countries from the
application of the duties resulting from the measure at issue, and thus granted an advantage that
was not accorded immediately a nd unconditionally to the like pr oducts originating in other
WTO Members.111
7.55. Article I of the GATT 1994 is entitled General Most -Favoured-Nation Treatment. In its
paragraph 1 it provides as follows:

105 Excerpt from India's schedule of concessions with respect to customs heading 7208,
(Exhibit IND-21); India's opening statement at the first meeting of the Panel, para. 44. See also
Japan's first written submission, para. 520; second written submission, para. 270; opening statement at the
first meeting of the Panel, para. 113; and response to Panel question No. 11, para. 4.
106 See para. 7.41 above.
107 See para. 7.42 above.
108 Notification imposing a definitive safeguard measure, (Exhibits JPN-13/IND-13), p. 5.
109 Final Findings, (Exhibits JPN-11/IND-11), section R, p. 209.
110 Final Findings, (Exhibits JPN-11/IND-11), section J, pp. 203-204.
111 Japan's responses to Panel question No. 11, para. 5, and No. 80, paras. 19-23; second written
submission, paras. 279 and 284-285; India's responses to question Nos. 11(a), 80, 83 and 91; and opening
statement at the second meeting of the Panel, paras. 5-6.

With respect to customs duties and charges of any kind impo sed on or in connection
with importation or exportation or imposed on the international transfer of payments
for imports or exports, and with respect to the method of levying such duties and
charges, and with respect to all rules and formalities in connection with importation and
exportation, and with respect to all matters referred to in paragraphs 2 and 4 of
Article III,* any advantage, favour, privilege or immunity granted by any [Member] to
any product originating in or destined for any other country sh all be accorded
immediately and unconditionally to the like product originating in or destined for the
territories of all other [Members].
7.56. Section 8B of the Customs Tariff Act, 1975, provides that:
[No s afeguard] duty shall be imposed on an article originating from a de veloping
country so long as the share of imports of that article from that country does not exceed
three per cent or where the article is originating from more than one developing
countries … so long as the aggregate of the imports fro m al l such countries taken
together does not exceed nine per cent of the total imports of that article into India.112
7.57. The same provision notes that, for the purpose of that section, "'developing country ' means
a country notified by the Central Government in the Official Gazette". 113 The list of developing
countries for the purposes of safeguard investigations (which includes 132 countries) was provided
in Notification No. 19/2016 published by the Ministry of Finance on 5 February 2016.114
7.58. In the Final Findings, the Indian competent authority noted that it had examined the share of
imports from developing countries during the period of investigation (POI). It stated that developing
countries had less than 3% individually and 9% collectively o f total imports into India, apart from
China and Ukraine whose shares were 24% and 4% of total imports respectively. The Indian
competent authority concluded that all developing countries listed in Notification No. 19/2016,
except for China and Ukraine, should be excluded from the application of the measure at issue. 115
The Ministry of Finance notification of 29 March 2016, imposing the definitive safeguard measure,
provided that:
Nothing contained in this notification shall apply to imports of subject g oods from
countries notified as developing countries under clause (a) of sub-section (6) of section
8B of the Customs Tariff Act, other than [the] People's Republic of China and Ukraine.116
7.59. India has argued that its exclusion of developing countries from the application of the measure
at issue was done pursuant to Article 9.1 of the Agreement on Safeguards.117 The provision cited by
India, entitled Developing Country Members, provides as follows:
Safeguard measures shall not be applied against a product origina ting in a developing
country Member as long as its share of imports of the product concerned in the
importing Member does not exceed 3 per cent, provided that developing country
Members with less than 3 per cent import share collectively account for not more than
9 per cent of total imports of the product concerned.
7.60. Japan argues that the fact that imports from Ukraine and C hina are subject to the measure
at issue due to their significant market shares indicates that India selected the sources of impor ts
to be subject to the measure with a view to preventing or remedying serious injury.118
7.61. It is an undisputed fact that the measure at issue excluded imports originating in certain
developing countries from the application of the resulting duties. This exclusion r esulted in
favourable treatment for imports from those countries that was not accorded immediately and
unconditionally to the like products originating in the territories of all other Members. This aspect as

112 Customs Tariff Act, (Exhibits JPN-1/IND-1), Section 8B(1), p. 10.
113 Customs Tariff Act, (Exhibits JPN-1/IND-1), Section 8B(6)(a), p. 11.
114 Notification No. 19/2016-Customs (5 February 2016), (Exhibits JPN-3/IND-3).
115 Final Findings, (Exhibits JPN-11/IND-11), section M, p. 206. See also ibid. section R(b), p. 209.
116 Notification imposing a definitive safeguard measure, (Exhibits JPN-13/IND-13), p. 7.
117 India's first written submission, paras. 342-343.
118 Japan's second written submission, para. 285; response to Panel question No. 11, para. 5.

a matter of fact resulted in a suspension by India of the general MFN treatment provided for in
Article I:1 of the GATT 1994.
7.62. We have noted, however, that the mere suspension of a GATT obligation is not sufficient to
characterize a measure as a safeguard. To constitute a safeguard, the susp ension of the
GATT obligation must be done with the objective of preventing or remedying serious injury to the
domestic production. In this respect, neither the Ministry of Finance's notification of 29 March 2016,
imposing the definitive safeguard measure, nor the findings by the Indian competent authority,
indicate that the exemption of imports from certain developing countries from the application of the
duties was designed to prevent or remedy serious injury. Before the Panel, India has argued instead
that this exclusion was done to comply with Article 9.1 of the Agreement on Safeguards.119 Indeed,
the language of the legislation on which India based the exemption of imports fr om certain
developing countries (namely, Section 8B of the Customs Tariff Act, 1975) closely reflects the
language in Article 9.1 of the Agreement on Safeguards. The exemption of certain countries from
the application of the duties resulting from the measure at issue has the result of allowing more
imports of the subject products into India 's territory for the purpose of complying with
India's obligation under Article 9.1 of the Agreement on Safeguards.
7.63. Accordingly, the suspension of Article I:1 of the GATT 1994 entailed by the exemption of
certain countries from the application of the duties resulting from the measure at issue was not
designed to prevent or remedy serious injury to India's domestic industry.
7.4.3.3 Article XXIV of the GATT 1994
7.64. India also asserts that the measure at issue suspended its obliga tions under Article XXIV of
the GATT 1994, specifically Articles XXIV:4, XXIV:8, and XXIV:12 , with respect to the free trade
agreements (FTAs) subscribed with the Republic of Korea and Japan.120 "In India's view, compliance
with FTAs entered by India with Korea and Japan under the aegis of Article XXIV of the GATT, 1994
is an 'obligation' under the GATT, 1994."121 India refers to the statement in the Final Findings that
the bilateral safeguard action under the respective FTAs limits the safeguard duties only to a level
not exceeding MFN rates, which would not be sufficient to mitigate the serious injury suffered by the
domestic industry.122 Japan replies that Article XXIV does not impose an obligation on Members to
either establish a customs union or free-trade area or to apply a particular rate of duty on imports
of the product concerned from certain FTA partners.123
7.65. We note that in 2009 India and Japan entered into to a Comprehensive Economic Partnership
Agreement, which came into effect on 1 August 2011 (India-Japan CEPA). India is also a party to a
Comprehensive Economic Partnership Agreement with Korea, which entered into force on
1 January 2010 (India-Korea CEPA).124 Both agreements provide that the duties for the products
concerned shall be reduced or eliminated. In the Final Findings, the Indian competent authorit y
explained in this way its recommendation that import s of the products concerned from Korea and
Japan be included in the safeguard measure:
[I]t is immaterial that imports from Korea RP and Japan increased due to low customs
duty under the respective FTAs. Imports from these two countries have occurred in
huge quantities in the most recent period and these imports are at very low prices
causing serious injury to the domestic industry. Further, it is the discretion of the
Government of India to explore bilateral mechanisms under the respective FTAs or
adopt a general safeguard measure in this case. Both the FTAs nowhere mention that
India is obligated to explore bilateral mechanisms first and only after failure of such

119 India's first written submission, paras. 342-343; opening statement at the first meeting of the Panel,
para. 42.
120 India's first written submission, para. 117; responses to Panel question Nos. 11(a), 20, 86, and 91;
and opening statement at the second meeting of the Panel, paras. 5-6 and 8.
121 India's response to Panel question No. 20.
122 India's first written submission, para. 117 (referring to Final Findings, (Exhibit IND-11), para. 55,
pp. 200-201).
123 Japan's second written submission, para. 286. See also comments on India's responses to Panel
124 Japan's first written submission, paras. 50-53. See also WTO regional trade agreements information
system, available at http://rtais.wto.org/UI/PublicAllRTAList.aspx (accessed 15 July 2018).

mechanisms can adopt a general safeguard measure. The imports from non -FTA
countries had also significantly increased, therefore, safeguard action under the FTA
would have left the door open for non -FTA countries to further increase their exports.
Secondly, the safeguard action on the FTA limits the safeguards duties only to the level
not exceeding the M FN rates, which is not by itself sufficient to mitigate the present
situation. It may be noted that these FTAs have specific provisions that allow India to
impose general safeguard duty. The only exception under [the Agreement on
Safeguards] and Saf eguard Duty Rules is exclusion of developing countries whose
individual share in imports is below 3% and whose aggregate share in imports is below
9%. Korea RP and Japan do not fall under this exception, as both of them are developed
countries.125
7.66. Article XXIV of the GATT 1994 contains rules applicable to customs unions and free -trade
areas of which WTO Members are part. In its relevant sections, this provision states:
4. The [Members] recognize the desirability of increasing freedom of trade by the
development, through voluntary agreements, of closer integration between the
economies of the countries parties to such agreements. They also recognize that the
purpose of a customs union or of a free-trade area should be to facilitate trade between
the constituent territories and not to raise barriers to the trade of other [Members] with
such territories.
5. Accordingly, the provisions of this Agreement shall not prevent, as between the
territories of [Members], the formation of a customs union or of a free -trade area or
the adoption of an interim agreement necessary for the formation of a customs union
or of a free-trade area; Provided that:
…
(b) with respect to a free-trade area, or an interim agreement leading to
the formation of a free -trade area, the duties and other regulations of
commerce maintained in each of the constituent territories and applicable
at the formation of such free -trade area or the adoption of such interim
agreement to the trade of [Members] not included in such area or not
parties to such agreement shall not be higher or more restrictive than the
corresponding duties and other regulations of commerce existing in the
same constituent territories prior to the formation of the free -trade area,
or interim agreement as the case may be; and
(c) any interim agreement referred to in sub -paragraphs (a) and (b)
shall include a plan and schedule for the formation of such a customs union
or of such a free-trade area within a reasonable length of time.
8. For the purposes of this Agreement:
 …
(b) A free-trade area shall be understood to mean a group of two or
more customs territories in which the duties and other restrictive
regulations of commerce (except, where necessary, those permitted under
Articles XI, XII, XIII, XIV, XV and XX) are eliminated on substantially all
the trade between the constituent territories in products originating in such
territories.

125 Final Findings, (Exhibits JPN-11/IND-11), para. 55, p. 201.

12. Each [Member] shall take such reasonable measures as may be available to it to
ensure observance of the provisions of this Agreement by the reg ional and local
governments and authorities within its territories.126
7.67. As indicated by the Appellate Body in Turkey – Textiles "Article XXIV [of the GATT 1994] may,
under certain conditions, justify the adoption of a measure which is inconsistent with certai n other
GATT provisions, and may be invoked as a possible 'defence ' to a finding of inconsistency ".127 The
chapeau of Article XXIV:5 provides that the obligations contained in the GATT 1994 shall not prevent
the formation of such customs unions or free-trade areas. According to this provision, however:
Article XXIV can justify the adoption of a measure which is inconsistent with certain
other GATT provisions only if the measure is introduced upon the formation of a customs
union, and only to the e xtent that t he formation of the customs union would be
prevented if the introduction of the measure were not allowed.128
7.68. A Member party to a free-trade area may invoke Article XXIV to defend a measure
incompatible with an obligation under the GATT 1994 if it can demonstrate that two conditions are
met (i) the free -trade area must comply with the requirements in paragrap hs 8(b) and 5(b) of
Article XXIV; and (ii) the measure at issue must be necessary for the formation or functioning of the
free-trade area, in the sense th at the formation or proper functioning of the free -trade area would
be prevented if the measure at issue was not allowed.129
7.69. In other words, any obligation that India may have, under the FTAs entered with Korea and
Japan, to apply a particular rate of duties or to refrain from imposing specific measures to imports
of those countries does not arise from the GATT 1994 but from the FTAs in question. As noted by
the panel in Indonesia – Iron or Steel Products:
Article XXIV of the GATT 1994 does not impo se an obligation on Indonesia to apply a
particular duty rate on imports of galvalume from its [regional trade agreement s]
partners. Article XXIV of the GATT 1994 is a permissive provision, allowing Members to
depart from their obligations under the GATT t o establish a customs union and/or free
trade area, in accordance with specified procedures. Article XXIV does not impose any
positive obligation on Indonesia either to enter into free trade agreements (FTAs) or to
provide a certain level of market access to its FTA partners through bound tariffs.
Indonesia's obligation to impose a tariff of 0% on imports of galvalume from its
[Association of Southeast Asian Nations ] trading partners is established in the
[Association of Southeast Asian Nations] Trade in Goods Agreement, not in Article XXIV.
Similarly, the establishment of a maximum tariff of 10% on imports of galvalume from
Korea is found in the [Association of Southeast Asian Nations ]-Korea Free Trade
Agreement, not in Article XXIV. In other words, Indones ia's 0% and 10% tariff
commitments are obligations assumed under the respective FTAs, not the WTO
Agreement. There is, therefore, no basis for Indonesia 's assertion that Article XXIV of
the GATT 1994 precluded its authorities from raising tariffs on imports of galvalume and
that the specific duty, thereby, "suspended" "the GATT exception under Article XXIV"
for the purpose of Article XIX:1(a).130
7.70. More specifically, Article XXIV:4, which is one of the provisions cited by India, reflects only
the recognition by WTO Members that (i) freedom of trade can be increased through preferential
trade agreements between Members; and (ii) the purpose of preferential trade agreements (customs
union and free-trade areas) should be to facilitate trade between the parties and not to raise barriers
to the trade of other Members. This language may provide context when interpreting other
provisions, but does not contain any positive obligation for WTO Members.
7.71. Similarly, Article XXIV:8, another provision cited by India, defines wh at shall be understood
by a free -trade area for the purpose of the agreement. Again t his language provides important
context when interpreting other provisions. The Member who attempts to justify a GATT-inconsistent

126 Emphasis original.
127 Appellate Body Report, Turkey – Textiles, para. 45.
128 Appellate Body Report, Turkey – Textiles, para. 46.
129 Appellate Body Report, Turkey – Textiles, paras. 58-59.
130 Panel Report, Indonesia – Iron or Steel Products, para. 7.20. (emphasis original; fns omitted)

measure by invoking Article XXIV has the burden of demonstrating that the free-trade area at issue
complies with the requirements in Article XXIV:8(b). Article XXIV:8, however, does not contain any
positive obligation for WTO Members.
7.72. In contrast with other sections in Article XXIV, paragraph 12 contains a positive obligation. It
provides that Members shall take all reasonable measures available to ensure that regional and local
authorities comply with obligations under the GATT 1994. The measure at issue, however, was
adopted by India's Central Government. There is no indication that the measure resulted in regional
or local authorities engaging in any conduct that was inconsistent with India's obligations under the
GATT 1994. Accordingly, the issue of whether India failed to take all reasonable measures available
to it to ensure that regional and local authorities complied with obligations under the GATT 1994 has
not arisen in this case.
7.73. Accordingly, India has not demonstrated that the measure at issue resulted in a suspension
of its obligations under Article XXIV of the GATT 1994, specifically under Articles XXIV:4, XXIV:8,
and XXIV:12.
7.4.4 Conclusion
7.74. For the reasons explained above, the Panel concludes that the measure at issue resulted in a
suspension of obligations incurred by India under the GATT 1994 , namely Article II:1(b),
second sentence. The measure that resulted in this suspension of GATT obligations was adopted by
India as a temporary emergency action, designed to remedy an alleged situation of serious injury
to the domestic industry brought about by an increase in imports of the subject products. In light of
those aspects, we find that the measure at issue constitutes a safeguard measure within the meaning
of Article 1 of the Agreement on Safeguards. Accordingly, the pro visions of Article XIX of the
GATT 1994 and the Agreement on Safeguards are applicable to the examination that the Panel has
to make of the claims raised in the present dispute.
7.75. We have already noted that the manner in which a Member 's domestic law characterizes its
own measures is not dispositive of the characterization of such measures under WTO law. Likewise,
the manner in which a Member conducts an investigation or notifies measures to the WTO is not
dispositive of the legal characterization of the measure. However, all these factors may be relevant
elements when considering a measure 's design and structure. In this regard, we find that the
following elements confirm our conclusion. First, the fact that the Indian competent authority
imposed the measure at issue and conducted the respective investigation under domestic legislation
that authorizes the Government to impose duties on imports after determining that relevant products
are being imported into India in increased quantities and under conditions so as to cause or threaten
to cause serious injury to the domestic industry. Second, the fact that the measure at issue had the
typical characteristics of a safeguard measure, including (i) that it resulted in duties imposed on
imports of the like or directly competitive product to that produced by the affected domestic industry;
(ii) that the duties were only temporary ; (iii) that the measure was subject to a progressive
liberalization at periodic intervals; and (iv) that imports from certain developing coun tries that did
not exceed a threshold were exempted from the duties. Third, the fact that India notified this
investigation and measures to the WTO Committee on Safeguards pursuant to the provisions in
Article XIX of the GATT 1994 and in the Agreement on Safeguards.
7.5 Whether India acted inconsistently with Article XIX:1(a) of the GATT 1994 with
respect to the existence of "unforeseen developments" and the effect of GATT obligations
7.5.1 Introduction
7.76. Japan claims that India acted inconsistently with Article XIX:1(a) of the GATT 1994 by failing
to demonstrate:
a. the existence of "unforeseen developments" and a logical connection between the
unforeseen developments and the increase in imports causing or threatening to cause
serious injury to the domestic industry; and

b. a logical connection between the effect of the obligations incurred under the GATT 1994
and the increase in imports causing or threatening to cause serious injury to the domestic
industry.
7.77. Before addressing Japan's claims, we recall the relevant facts regarding the Indian competent
authority's determination on the unforeseen developments and the effect of the obligations incurred
under the GATT 1994 and set out our understanding of Article XIX:1(a) of the GATT 1994.
7.5.2 The Indian competent authority's determination
7.78. Both the Preliminary and Final Findings of the Indian competent authority address the issue
of "unforeseen developments" and "the effect of the obligations incurred" under the GATT 1994.
7.79. With respect to "unforeseen developments", the Indian com petent authority observed that
the world production capacity of crude steel was 2,351 million tonnes as of 31 December 2014,
which exceeded global demand by almost 30%. 131 It further noted that the production capacity in
early 2015 was 1,055 million tonnes for the non-Chinese industry and 991 million tonnes for China,
for a total of 2.05 billion tonnes. When compared to steel production of 1.66 billion tonnes in 2014,
there were 382 million tonnes of excess global steel production capacity.132
7.80. The Indian competent authority stated that, specifically, China, Russia, Ukraine, Japan, and
Korea developed "huge capacities" to meet the demand for steel in developed countries. At the same
time, the traditional importers of steel such as the United States and the European Union reduced
their dependence on imported steel. This fact induced exporters to look for other export markets
with increasing demand and high domestic prices. 133 The latter included India, where demand for
steel had increased by 3.1%. The Indian competen t authority considered that India became "the
natural choice" for steel surplus manufacturers due to its increasing demand and high domestic
prices.134
7.81. The Indian competent authority also noted that the Russian currency had depreciated due to
a drop in oil prices and Russian steel exporters experienced "high realization for their exports". At
the same time, Russian exporters faced restricted access to their traditional export markets, such
as the European Union and Ukraine. 135 The Indian competent authori ty further noted that , after a
sustained growth rate for many decades, the demand for steel in China had decreased due to a
slowdown in its infrastructure sector, which was the biggest consumer of steel in China. It considered
that this situation was unlik ely to change in the near future. 136 The Indian competent authority
further observed that, due to its political crisis, Ukraine's currency had depreciated by 60% in 2014.
The depreciation of the Ukrainian currency and the resulting low export prices for Ukra inian steel,
together with the Russian and Chinese sales, put further pressure on the global steel market.137 The
Indian competent authority concluded that the above events were unforeseen developments that
had resulted in increased imports of the product concerned into India.138
7.82. With respect to the "the effect of the obligations incurred" under the GATT 1994, the Indian
competent authority examined whether the increase in imports had occurred as a result of the effect
of the obligations incurred by India under the GATT 1994.139 The Indian competent authority stated
that, according to India 's Schedule of Concessions, the bound rate on the product concerned was

131 Preliminary Findings, (Exhibits JPN-7/IND-7), para. 19, p. 14.
132 Preliminary Findings, (Exhibits JPN-7/IND-7), para. 24, p. 15 (referring to World Steel Dynamics).
133 Preliminary Findings, (Exhibits JPN-7/IND-7), para. 18, p. 14; Final Findings,
134 Preliminary Findings, (Exhibits JPN-7/IND-7), paras. 18 and 20, p. 14; Final Findings,
135 Preliminary Findings, (Exhibits JPN-7/IND-7), para. 21, p. 14; Final Findings,
136 Preliminary Findings, (Exhibits JPN-7/IND-7), para. 23, pp. 14-15; Final Findings,
137 Preliminary Findings, (Exhibits JPN-7/IND-7), para. 22, p. 14; Final Findings,
138 Preliminary Findings, (Exhibits JPN-7/IND-7), para. 24, p. 15; Final Findings,
139 Final Findings, (Exhibits JPN-11/IND-11), paras. 80-81, p. 205.

40% ad valorem. It noted that India reduced its applied rates on products in many sectors, including
the steel sector and that the applied rate on th e product concerned was 7.5% in 2013-2015. The
Indian competent authority concluded that "due to the effect of such low applied tariffs" and given
the circumstances and market conditions present in that time the imports of the product concerned
had increased in "sudden, sharp, significant manner into India".140
7.83. Considering the above, the Indian competent authority concluded that "as a result of
unforeseen developments and as an effect of obligations under GATT inclu ding tariff concessions",
imports of the product concerned had increased in a sudden, sharp, significant and recent manner
into India.141
7.5.3 Article XIX:1(a) of the GATT 1994
7.84. Article XIX:1(a) reads as follows:
If, as a result of unforeseen developments and of the effect of the obligations incurred
by a [Member] under this Agreement, including tariff concessions, any product is being
imported into the territory of that [Member] in such increased quantities and under such
conditions as to cause or threaten serious injury to domestic producers in that territory
of like or directly competitive products, the [Member] shall be free, in respect of such
product, and to the extent and for such time as may be necessary to prevent or remedy
such injury, to suspend the obligation in whole or in part or to withdraw or modify the
concession.
7.85. Article XIX:1(a) provides WTO Members with a right to apply a safeguard measure when, as
a result of unforeseen developments and of the effect of the obligations incurred under the GATT, a
product is being imported in such increased quantities and under such conditions as to cause or
threaten to cause serious injury to the domestic industry producing like or directly competitive
products.142 As noted by the panel in US – Steel Safeguards, pursuant to Article XIX of GATT 1994,
when unforeseen developments have resulted in increased imports that are causing or threatening
to cause serious injury to the relevant domestic industry, WTO Members may limit market access
by taking an otherwise WTO-inconsistent measure and obtain temporary relief.143
7.86. The unforeseen developments and the effect of GATT obligations are not "independent
conditions" for the application of safeguard measures, additional to the conditions set forth in the
second clause of Article XIX:1(a) and reiterated in Article 2.1 of the Agreement on Safeguards.
Rather, these two elements constitute "circumstances" that must be demonstrated, as a matter of
fact, to apply safeguard measures consistently with Article XIX:1(a). In this sens e, t he
Appellate Body stated that there is a "logical connection" between the circumstances described in
the first clause – "as a result of unforeseen developments and of the effect of the obligations incurred
by a Member" – and the conditions for the application of safeguard measures set forth in the second
clause of Article XIX:1(a), such as a demonstration of an import surge, serious injury, and a causal
link.144
7.87. A WTO Member imposing a safeguard measure must demonstrate the existence of unforeseen
developments and the effect of GATT 1994 obligations through reasoned and adequate explanations
contained in its published report. 145 These explanations must show that the identified unforeseen
developments have resulted in increased imports causing or threatening to cause serious injury to
the relevant domestic industry, and that one or more obligations under the GATT 1994 limit the
importing Member's ability to prevent or offset the effect resulting from such increased imports.

140 Final Findings, (Exhibits JPN-11/IND-11), para. 81, p. 205.
141 Final Findings, (Exhibits JPN-11/IND-11), para. 82, p. 205.
142 Appellate Body Report, US – Steel Safeguards, para. 264; Panel Reports, US – Steel Safeguards,
para. 10.9.
143 Panel Reports, US – Steel Safeguards, para. 10.9; See also Appellate Body Report, Argentina –
Footwear (EC), para. 94.
145 Appellate Body Report, US – Lamb, paras. 72 and 76.

7.88. The phrase "unforeseen developments" means developments that were "unexpected" at the
time the importing Member incurred the relevant GATT obligation.146 In US – Fur Felt Hats, the GATT
panel stated that "unforeseen developments" should be interpreted to mean "developments
occurring after the negotiation of the relevant tariff concession which it would not be reasonable to
expect that the negotiators of the country making the concession could and should have foreseen at
the time when the concession was negotiated" .147 In US – Steel Safeguards, the panel stated that
the legal standard used to determine what constitutes unforeseen developments has subjective and
objective elements. The subjective element relates to what constitutes unforeseen developments for
a particular importing Member and it wil l vary depending on the context and circumstances. The
objective element focuses on what negotiators could reasonably have had in mind when they
incurred a GATT obligation (not what the specific negotiators had in mind). 148 The competent
authority's published report must discuss how the developments were unforeseen at the appropriate
time, and why the increase in imports causing or threatening to cause serious injury to the domestic
industry occurred as a result of those unforeseen developments.149
7.89. With respect to the effect of a GATT 1994 obligation, the competent authority 's published
report must demonstrate that a WTO Member imposing a safeguard measure is subject to an
obligation (or obligations) under the GATT 1994 and explain how that obligation constrains its ability
to react to the import surge causing injury to its domestic industry.
7.5.4 The existence of unforeseen developments
7.90. Japan submits that India acted inconsistently with Article XIX:1(a) by failing to demonstrate
the existence of unforeseen developmen ts. Japan argues that , although the Preliminary and Final
Findings include a section on unforeseen developments, the Indian competent authority failed to
demonstrate why the developments identified in that section were unforeseen.150 Japan also argues
that the Indian competent authority did not explain whether all or some of the events mentioned in
its determination were considered as unforeseen developments.151 Japan adds that the Final Findings
note that the identified developments were unforeseen by the dome stic industry, which does not
prove that they were necessarily unforeseen by India. Japan submits that under Article XIX:1(a) the
developments have to be unforeseen or unexpected for the importing country, rather than for its
domestic industry.152
7.91. India resp onds that the Preliminary and Final Findings clearly indicate that the Indian
competent authority considered a confluence of events or circumstances to constitute the
"unforeseen developments".153 India points out that its competent authority referred to the panel
report in US – Steel Safeguards, which clarified that a confluence of events can form a basis for the
unforeseen developments. India notes that Article XIX:1(a) does not specify how a competent
authority should demonstrate the existence of unforeseen developments. India refers to the
Appellate Body's statements in US – Lamb to argue that a competent authority should demonstrate
the existence of unforeseen developments as a "matter of fact" and to provide a "discussion", and
not necessarily an "explanation", as to why the identified developments were "unforeseen" at the
appropriate time.154 Finally, India submits that, although the Final Findings note that the domestic
industry demonstrated the existence of unforeseen developments that had resul ted in an import
surge, the conclusion regarding unforeseen developments is that of the competent authority.155

147 Report of the Intersessional Working Party on the Complaint of Czechoslovakia Concerning the
Withdrawal by the United States of a Tariff Concession under Article XIX of the GATT ("Hatters' Fur"),
148 Panel Reports, US – Steel Safeguards, paras. 10.41-10.43.
149 Panel Reports, US – Steel Safeguards, para. 10.67.
150 Japan's first written submission, paras. 104-106, 108-112, and 116 (referring to Panel Report,
Argentina – Preserved Peaches, paras. 7.23 and 7.33); second written submission, paras. 13-23.
151 Japan's first written submission, para. 107; second written submission, paras. 9-12.
152 Japan's first written submission, para. 113; second written submission, paras. 24-25.
153 India's first written submission, paras. 70-72, 76, and 81(a) (referring to Panel Reports, US – Steel
Safeguards, para. 10.99).
154 India's first written submission, paras. 79 and 81(b).
155 India's first written submission, para. 81(g).

7.92. We first note that both parties agree that the text of Article XIX:1(a) allows a competent
authority to consider either a confluence of events or individual events as the unforeseen
developments provided for in Article XIX:1(a).156 This understanding is supported by the panel report
in US – Steel Safeguards, referred by both parties, that a "confluence of developments can form the
basis of 'unforeseen developments' for the purposes of Article XIX of GATT 1994".157 Japan argues,
however, that the Indian competent authority's determination lacks an explanation on whether the
identified events separately or together constitute unforeseen developments.
7.93. Both the Preliminary and Final Findings show that the Indian competent authority considered
the simultaneous occurrence of developments or confluence of events as the "unforeseen
developments" provided for in Article XIX:1(a). In particular, the Indian competent authority, before
analysing each of the events, referred to the panel's statement in US – Steel Safeguards that "the
confluence of several events can unite to form the basis of an unforeseen development".158
7.94. The Indian competent authority considered that major steel exporting countries (including
China, Russia, Ukraine, Japan, and Korea) had significantly increased their production capacity to
meet the demand in developed countries. According to the Preliminary Findings, as of
31 December 2014 the world crude steel capacity was in excess of global demand by almost 30%.
The developed countries that traditionally were big importers of steel, including the United States
and the European Union, had reduced their dependence on imported steel. After a "sustained growth
rate" for many decades, China had experienced a drop in its domestic demand for steel. The findings
also note that, at the same time, the demand in India was growing and domestic prices were high,
which made India a natural destination for steel exports from countries with high supply of steel
products. In addition, the depreciation of the Russian and the Ukrainian currencies relative to the
US dollar led to the lowering of export prices for steel from th ese countries, which put further
pressure on the global steel market. Th ese findings show that the Indian competent authority
considered that the excess production capacity of steel , combined with the increased demand in
India, declined demand in other maj or markets, and currency depreciation in Ukraine and Russia,
were unexpected developments that allegedly led to the increase in imports into India.
7.95. Japan next argues that India did not explain why the identified developments were
unforeseen. Japan submits that a mere statement that a given event constitutes an unforeseen
development, without any explanation as to why such event is to be regard ed as an unforeseen
development, is insufficient. According to Japan, while the Final Findings use several times the words
"unforeseen" or "unforeseen developments", they fail to provide any explanation as to why the
reported events were indeed "unforeseen" at that time.159 As discussed above, the term "unforeseen
developments" means changes that the importing Member could not have reasonably foreseen at
the time when the relevant GATT obligation was negotiated (in this case, at the end of the Uruguay
Round, as of 1 January 1995). A competent authority must demonstrate in its published report,
through reasoned and adequate explanation, how these developments were unexpected or
unforeseen.160 We note that Japan does not advance any arguments that any of the identified
developments or confluence of these developments could have been foreseen by India.
Japan's argument focuses instead on the alleged lack of explanation by the Indian competent
authority as to why the developments were unforeseen. Therefore, we will consider whether the
Indian competent authority sufficiently explained its conclusion that the identified development s
were unforeseen.

156 Japan's second written submission, para. 10; India's first written submission, para. 72.
157 The panel in US – Steel Safeguards stated that:
Article XIX does not preclude cons ideration of the confluence of a number of developments as
"unforeseen developments". Accordingly, the Panel believes that confluence of developments can
form the basis of "unforeseen developments" for the purposes of Article XIX of GATT 1994. The
Panel is of the view, therefore, that it is for each Member to demonstrate that a confluence of
circumstances that it considers were unforeseen at the time it concluded its tariff negotiations
resulted in increased imports causing serious injury.
(Panel Reports, US – Steel Safeguards, para. 10.99).
158 Preliminary Findings, (Exhibits JPN-7/IND-7), paras. 14-17; Final Findings, (Exhibits JPN-11/IND-11),
paras. 71-74.
159 Japan's first written submission, para. 112; second written submission, paras. 16-18.
160 Panel Report, Indonesia – Iron or Steel Products, para. 7.51.

7.96. In its discussion of unforeseen developments, the Indian competent authority referred to the
increase of production capacity in major exporting countries, the increase in demand in India, and
the decrease in demand in the European Union, the United States, and China. Even though the
changes in production capacity or demand are not necessarily extraordinary circumstances, and can
occur as part of normal business cycles, the extent and timing of such changes as well as the degree
of their impact on the competitive situation in the market can be unforeseen. 161 The
Indian competent authority observed that in 2014 the world production capacity of crude steel was
2,351 million tonnes, which exceeded the global demand by almost 30%.162 The production capacity
further increased significantly in 2015: "effective capacity figure for early 2015 is 1055 million tones
[sic] for the non-Chinese industry and 991 million tones [sic] for China, a total of 2.05 billion tones
[sic]. When compared to steel production in 2014 of 1.66 billion tones [sic], there is
382 million tones [sic] of excess global steel making capacity".163 These data indicate the significant
extent and speed of changes in world production capacity of ste el. Furthermore, the Indian
competent authority found that the increase in production capacity occur red at the same time as
other developments in the market. In particular, th e European Union and the United States, which
were "traditionally the biggest importers of steel", decreased their demand for imported steel. The
Indian competent authority also referred to the decrease in the domestic demand in China and noted
that China used to have a "sustained growth rate" for many decades, which indicates that the drop
in growth rate was unexpected. Finally, India could not reasonably have expected the currency
depreciations in Russia and Ukraine, which happened due to political and economic crises in these
countries that were unrelated to the ordinary course of commerce.
7.97. In our view, it was reasonable for the Indian competent authority to find that an increase to
such extent in production capacity , combined with high er domestic demand in India, decreased
demand in several major markets, and that currency depreciation in Russia and Ukraine were
unforeseen developments. We consider that negotiators could not reasonably have expected this
confluence of events when India negotiated its tariff concessions. In light of the above reasons, we
conclude that the Indian competent authority provided reasoned and adequate explanation as to
why the identified developments were unforeseen.
7.98. Japan also argues that the Indian competent authority concluded that the domestic industry,
and not India, did not foresee th e developments. Japan refers to the Indian competent
authority's statement that "[t]he domestic industry has been able to demonstrate that the
developments in the market for surge in imports of the [product under consideration] were
unforeseen".164 We reject this argument, because, even if the Indian competent authority was
supporting arguments made by the domestic industry during the investigation , the Final Findings
contain a statement by the authority and not by the domestic industry.
7.99. In light of the above, we find that Japan has failed to demonstrate that India did not identify
events that represent a plausible set of unforeseen developments within the meaning of
Article XIX:1(a) of the GATT 1994.
7.5.5 Logical connection between unforeseen developments and the increased imports
7.100. We turn to considering Japan 's arguments that the Preliminary and Final Findings do not
demonstrate that the identified unforeseen developments resulted in increased imports into India
allegedly causing injury to the domestic industry.

161 In US – Fur Felt Hats, a GATT panel considered that the fact that hat styles had changed did not
constitute an "unforeseen development" within the meaning of Article XIX:1(a). However, "the degree to which
the change in fashion affected the competitive situation, could not reasonably be expected to have been
foreseen by the United States authorities in 1947". (Report of the intersessional Working Party on the
complaint of Czechoslovakia concerning the withdrawal by the United States of a tariff concession under
Article XIX of the GATT, GATT/CP/106 (adopted 22 October 1951), paras. 11-12).
162 Preliminary Findings, (Exhibits JPN-7/IND-7), para. 19, p. 14.
163 Preliminary Findings, (Exhibits JPN-7/IND-7), para. 24, p. 15.
164 Japan's first written submission, para. 113 (referring to Final Findings, (Exhibit JPN-11),
para. 102(iii), p. 208).

7.101. Japan contends that India failed to demonstrate a "logical connection" between the
unforeseen developments and the increase in imports of the product concerned into India. 165 First,
Japan argues that the Indian competent authority failed to explain how imports of the product
concerned increased "as a result" of the unforeseen developments.166 In this respect, Japan submits
that the Indian competent authority should have examined how the unforeseen developments
modified the competitive relationship between the imported and domestic products to the detriment
of the latter and to such a degree as to result in an increase in imports causing serious injury to the
domestic industry.167 Furthermore, Japan argues that the Indian competent authority should have
conducted a country-specific analysis of imports, given that certain unforeseen developments in this
case relate to specific countries.168 Japan emphasizes that the Indian competent authority also failed
to address any developments in Japan and Korea, which are the two largest exporting countries of
the product concerned into India.169 Japan also argues that the Indian competent authority failed to
demonstrate when the events identified as unforeseen developments occurred. According to Japan,
the increased imports can be "a result of" unforeseen developments only if the latter have occurred
before the imports started to surge. Japan argues that the Indian competent authority failed to
indicate whether the unforeseen developments preceded the import surge, and thus failed to
establish the link between the alleged unforeseen developments and the import surge.170
7.102. Second, Japan asserts that India examined the unforeseen developments with regard to
steel in general and failed to consider the effect of unforeseen developments with r egard to the
specific product concerned. 171 Third, Japan submits that the Indian competent authority failed to
provide any supporting data regarding the alleged unforeseen developments, including specific data
regarding production capacities of the product concerned in the exporting countries and supporting
evidence regarding depreciation of Russian and Ukrainian currencies.172
7.103. India argues that Article XIX:1(a) does not require a competent authority to examine
whether the unforeseen developments have modified the conditions of competition between the
imported and the domestic products. India considers that Japan reads into Article XIX:1(a) an
obligation that does not exist. 173 India asserts that Article XIX:1(a) only requires a competent
authority to demonstrate a logical connection between "unforeseen developments" and "increased
imports", which was shown in the Indian competent authority's determination.174 India submits that,
in the circumstances, a logical connection should be examined between the increased imp orts and
the confluence of developments, and not with individual events which form the basis for the
unforeseen developments.175 India disagrees with Japan that the complexity of the matter in the
underlying investigation required more sufficient explanation . India considers that Japan failed to
exercise its burden of proof to demonstrate that a more detailed analysis was necessary.176
7.104. India further submits that considering the global nature of safeguard measures, there is no
requirement to examine the developm ents individually on a country -specific basis. 177 India also
argues that, in accordance with Article XIX:1(a), a competent authority has to demonstrate a logical
connection between (i) the unforeseen developments , and (ii) the increased imports of specified
products. India disagrees that the unforeseen developments themselves should be connected to a

165 Japan's first written submission, paras. 114-116 and 118 (referring to Appellate Body Reports,
Panel Reports, Argentina – Preserved Peaches, para. 7.23; and US – Steel Safeguards, para. 10.122).
166 Japan's first written submission, paras. 114-116 and 118 (referring to Appellate Body Reports,
Panel Reports, Argentina – Preserved Peaches, para. 7.23; and US – Steel Safeguards, para. 10.122).
167 Japan's first written submission, paras. 85-86 and 117-119 (referring to Panel Reports, US – Lamb,
paras. 7.23-7.24; and US – Steel Safeguards, para. 10.115); second written submission, paras. 42-43.
168 Japan's first written submission, paras. 133 and 136; second written submission, paras. 44-48.
169 Japan's first written submission, paras. 134-135; second written submission, para. 47.
170 Japan's first written submission, paras. 137-141; second written submission, paras. 49-52.
171 Japan's first written submission, paras. 142-146; second written submission, paras. 53-62.
172 Japan's first written submission, paras. 147-151; second written submission, paras. 63-67.
173 India's first written submission, para. 85; second written submission, paras. 9-10.
174 India's first written submission, paras. 84-87 and 91.
175 India's first written submission, para. 70.
176 India's first written submission, paras. 88 and 93-95.
177 India's first written submission, paras. 86 and 90 (referring to Final Findings, (Exhibit IND-11),
paras. 34-42, 102(i), and 102(iii); and Preliminary Findings, (Exhibit IND-7), paras. 14-24 and 71-82);
response to Panel question No. 88.

specific product, since the increase in imports may result from such events as, for example, currency
devaluations, closure of downstream industries, or acts of war, which do not relate to a specific
product.178 India also rejects Japan's allegation that the unforeseen developments should necessarily
coincide with the increased imports. India notes that Japan does not dispute the facts of the currency
devaluation and the increase in imports in the recent past.179
7.105. We begin by noting Japan's argument that, since in this case there is no clear link between
the unforeseen developments and the increase in imports, the Indian competent authority should
have examined how the alleged unforeseen developments modified the conditions of competition
between the domestic and imported products. We recall that Article XIX:1(a) does not provide any
guidance on how the relationship between unforeseen developments and the increase in imp orts
shall be examined. The competent authorities enjoy certain discretion in choosing the appropriate
method for examining the relationship between unforeseen developments and the increase in
imports, taking into account the facts and circumstances of the particular case. At the same time, a
competent authority must provide in its published report a reasoned and adequate explanation
supporting its conclusions on unforeseen developments. Therefore, the question before us is whether
the Indian competent auth ority demonstrated in its published report, through a reasoned and
adequate explanation, that unforeseen developments resulted in increased imports causing (or
threatening to cause) serious injury to the domestic industry of the products concerned.
7.106. We agree with the panel's statement in US – Steel Safeguards that the enquiry as to whether
an explanation regarding the relationship between unforeseen developments and the increase d
imports is reasoned and adequate depend s on the factual circumstances of the pa rticular case. In
particular, the panel stated that:
In some cases, the explanation may be as simple as bringing two sets of facts together.
However, in other situations, it may require much more detailed analysis in order to
make clear the relationship that exists between the unforeseen developments and the
increased imports that are causing or threatening to cause serious injury. The nature of
the facts, including their complexity, will dictate the extent to which the relationship
between the unforeseen d evelopments and increased imports causing injury needs to
be explained. The timing of the explanation, its extent and its quality are all factors that
can affect whether a[n] explanation is reasoned and adequate.180
7.107. We will first consider Japan 's argument that the Indian competent authority should have
conducted a country-specific analysis of imports , considering that some of the alleged unforeseen
developments relate to events in specific exporting countries. T he Indian competent
authority's examination of unforeseen developments focused on changes in the global steel market
(the difference between global production capacity and global demand) as well as on developments
in certain exporting countries (such as China, Russia, and Ukraine). The developments in s pecific
countries include the weakening of the Russian currency due to a drop in oil prices and the
consequent increase of steel exports from Russia; the restricted access for Russian steel to its
traditional export markets; the depreciation of the Ukraini an currency and consequent low priced
imports from Ukraine; and a decrease in domestic demand for steel in China.181
7.108. The Indian competent authority hardly mentioned any developments relating to Korea and
Japan, even though these two countries were the two largest exporters of the product concerned.
The share of imports from Japan was 37% in 2013 -2014, 31% in 2014 -2015, and 34% in the
first quarter of 2015 -2016. The share of imports from Korea was 13% in 2013 -2014, 26%
in 2014-2015, and 40% in 2015-2016.182 Although the Indian competent authority mentioned Korea
and Japan among countries that significantly increased their production capacity, no supporting data

178 India's first written submission, para. 103.
179 India's first written submission, para. 102.
180 Panel Reports, US – Steel Safeguards, para. 10.115.
181 The share of imports from Russia was 4% in 2013-2014, 6% in 2014-2015, and 5% in the first
quarter of 2015-2016. The share of imports from Ukraine was 6% in 2013-2014, 3% in 2014-2015, and 4% in
the first quarter of 2015-2016. (Japan's first written submission, para. 134 (referring to Revised Application,
(Exhibit JPN-6); and Application, (Exhibit JPN-5)). See also Final Findings, (Exhibits JPN-11/IND-11),
182 Japan's first written submission, para. 134 (referring to Revised Application, (Exhibit JPN-6), and
Application, (Exhibit JPN-5)). See also Final Findings, (Exhibits JPN-11/IND-11), section XIII, para. k, p. 186.

regarding the increase in production capacity in Japan and Korea were provided in the Preliminary
or Final Findings. The section on unforeseen developments does not discuss further any development
in Japan and Korea that may have led to the import surge from these countries into India. At the
same time, the se ction on serious injury refers to the FTAs that India concluded with Japan and
Korea. In particular, the India-Korea CEPA came into effect on 1 January 2010 and India-Japan CEPA
came into effect on 1 August 2011.183 These FTAs provided for a gradual reduction of applied duties
for the product concerned originating from Korea and Japan. The reduced tariffs under the respective
FTAs ranged from 0% to 3.75% during the POI, while the M FN duty rate was 10%. 184 The Indian
competent authority concluded that:
[I]t is immaterial that imports from Korea RP and Japan increased due to low customs
duty under the respective FTAs. Imports from these two countries have occurred in
huge quantities in the most recent period and these imports are at very low prices
causing serious injury to the domestic industry.185
7.109. In response to a question from the Panel, India stated that the lowering of duties under the
respective FTAs was not considered part of the confluence of unforeseen developments, and that it
instead referred to the effect of the obligations incurred by India under the GATT 1994, namely
Article XXIV.186 As noted above, the lowering of tariffs for the product concerned originating from
Korea and Japan is an obligation for India under the respective FTAs. Article XXIV of the GATT 1994
does not impose an obligation on India to either enter into specific FTAs or to provide a certain level
of customs duties to its FTA partners. India's acknowledgement that the significant volume of
imports originating from Korea and Japan as a result of the FTAs was not part of the confluence of
unforeseen developments undermines the logical connection between the increased imports and the
unforeseen developments. In any case, the reference to India's obligations under Article XXIV of the
GATT 1994 is an ex post explanation, since the Indian competent authority did not refer to these
obligations in the Final Findings.
7.110. As indicated above, Article XIX:1(a) does not provide any methodology for examining the
relationship between the unforeseen develo pments and the increase in imports. Even though a
competent authority enjoys a certain latitude in choosing the appropriate method, it must provide a
reasoned and adequate explanation of its findings. In the underlying investigation, the Indian
competent authority relied in its analysis of unforeseen developments on events occurring in specific
countries, in particular China, Russia, and Ukraine, while a significant portion of imports during the
POI originated from its FTA partners, Korea and Japan. Although we acknowledge that the origin of
the unforeseen developments may differ from the origin of the increased imports187, the facts before
the Indian competent authority warranted an explanation as to why the alleged increase in imports,
with a predominant share from Japan and Korea, occurred due to the unforeseen developments of
different origins.
7.111. Moreover, the unforeseen developments identified in the Indian competent
authority's findings relate to changes in the steel market in general. The steel industry wo rldwide
produces numerous varieties of steel products. The underlying investigation was conducted with
regard to a particular product – "hot-rolled flat products of non-alloy and other alloy steel in coils of
a width of 600 mm or more". In response to a question from the Panel, India noted that:
Steel production worldwide is measured in terms of the crude capacity. The proportion
of the [product under consideration] remains the same qua the crude production for
which data is available in public domain. There is no indication on record to suggest that
either the production or the consumption pattern has changed so as to make an analysis
based on the crude steel capacity unreliable.188
7.112. Neither the Preliminary nor the Final Findings, however, contain this explanation, nor do
they provide any supporting data regarding the proportion of the product concerned in the crude

183 India's response to Panel question No. 85. See also WTO regional trade agreements information
system, available at http://rtais.wto.org/UI/PublicAllRTAList.aspx (accessed 15 July 2018).
184 Japan's comments on India's response to Panel question No. 85, para. 19 and table 1.
185 Final Findings, (Exhibits JPN-11/IND-11), para. 55, p. 201. (emphasis added)
186 India's responses to Panel question Nos. 20 and 86.
187 Panel Reports, US – Steel Safeguards, para. 10.146.
188 India's response to Panel question No. 16. See also response to Panel question No. 90.

steel production. In our view, t he Indian competent authority failed to exp lain how the unforeseen
developments related to steel in general resulted in an increase in imports of the specific product
concerned into India or, alternatively, why such analysis was unnecessary.
7.113. The Indian competent authority also found that many developed countries that were
"traditionally the biggest importers of steel", including the United States and the European Union,
had decreased their demand for imported steel. The exporting countries searched for other markets
and India was a natural choice for these manufactures to divest their excess capacity.189 The Indian
competent authority failed to support this statement with any data and to link the excess supply
with the alleged increase of imports into India. Similarly, the Indian competent authority stated that
Russian exporters had "a restricted access to traditional markets like the European Union and
Ukraine resulting in [an] export push to India" 190, without providing any supporting data. The
findings also mention that China experienced a decrease in domestic demand for steel, which led to
a sudden surge of imports from China to India. 191 Apart from noting that a negative growth rate
of -0,5% in steel use in China would continue in 2015 and 2016, no other supporting data were
provided. Therefore, we consider that the Indian competent authority failed to support its
conclusions regarding the change in demand in several markets with data and to link these steel
market displacements to the specific increase of imports into India.
7.114. Finally, we agree with Japan that the timing of the unforeseen developments is a relevant
consideration for showing that the unforeseen developments resulted in an increase in imports. In
our view, the Indian competent authority 's examination of unforeseen develo pments lacks an
explanation on the timing of events, which form the basis for the unforeseen developments. In
particular, the Indian competent authority referred to the increase in production capacity in certain
exporting countries192, the decrease in demand in the European Union and the United States, as well
as the increase in demand in India, but failed to indicate the timing of these developments as well
as to link them to the subsequent increase in imports into India. The Indian competent authority
further noted that domestic demand in China was likely to remain unchanged in the short term and
that steel use in China would continue to experience a "negative growth of -0.5% in 2015 and 2016".
However, this consideration refers to an estimation of future development s. The Indian competent
authority's determination does not provide data regarding the timing of the decrease in demand in
China. Similarly, the Indian competent authority refers to the currency depreciation in Russia and
the subsequent decrease in export prices, as a reason for increased imports from Russia 193, but
failed to indicate the timing of these developments. We recall that the Indian competent authority
identified the confluence of events as "unforeseen developments". Although we do not believe that
all events that form a confluence of developments must necessarily take place simultaneously, there
must be a clear temporal connection between the events that constitute a confluenc e of
developments that is in turn connected to the increase in imports.
7.115. For the foregoing reasons, we find that India failed to provide a reasoned explanation that
the increase in imports of the product concerned into India occurred as a result of unforese en
developments.
7.5.6 Effect of the obligations incurred under the GATT 1994
7.116. We now address Japan's arguments that India failed to demonstrate a "logical connection"
between the effect of the obligations incurred by India under the GATT 1994 and the increase in
imports causing (or threatening to cause) serious injury to the domestic industry.
7.117. Japan argues that a Member imposing a safeguard measure must demonstrate, not only the
existence of the obligation under the GATT 1994 per se, but also the effects that such obligation has

189 Final Findings, (Exhibits JPN-11/IND-11), para. 75, p. 204.
190 Final Findings, (Exhibits JPN-11/IND-11), para. 76, p. 204.
191 Final Findings, (Exhibits JPN-11/IND-11), para. 78, p. 204.
192 In particular, the Indian competent authority observed that "a number of countries including
China PR, Russia, Ukraine, Japan and Korea have developed huge capacities". It indicated the timing of the
changes in production capacity only with regard to China. See paras. 7.79-7.80 above.
193 We note that the Indian competent authority indicated the timing of currency depreciation in
Ukraine. It observed that the Ukrainian currency depreciated by 60% in 2014 and considered that this trend
would continue in 2015. (Preliminary Findings, (Exhibits JPN-7/IND-7), para. 22, p. 15).

produced.194 Japan contends that a competent authority has to explain how the effects of the
obligation under the GATT 1994 have resulted in the increase in imports causing or threatening to
cause serious injury to the domestic industry, i.e. that there must be a "logical connection" between
the effects of the GATT obligation and the increased imports. 195 Japan argues that this "logical
connection" means that a relevant GATT obligation constrains a Member 's freedom of action and
prevents it from taking a WTO-consistent measure to address the increase in imports causing injury
to the domestic industry.196 Japan notes that India's bound rate on the product concerned was 40%
ad valorem, while the applied rate was 7.5% in 2013-2015. Japan therefore submits that India could
have increased its applied rate up to the level of the bound rate and was not prevented from doing
so by Article II:1(b) of the GATT 1994.197
7.118. India refers to the Appellate Body's statement that the phrase "the effect of the obligations
incurred" under the GATT 1994 means that an importing Member must demonstrate "as a matter of
fact" that it has incurred obligations under the GATT 1994, including tariff concessions. 198 India
submits that Japan's argument that, in order to apply a safeguard measure, it must be demonstrated
that the effects of the obligations under the GATT 1994 have resulted in the increase in imports , is
contrary to the panel 's statement in US – Steel Safeguards that "the logical connection between
tariff concessions and increased imports causing serious injury is proven once there is evidence that
the importing Member has tariff concessions for the relevant product" .199 India submits that the
Indian competent authority 's Final Findings note that India has tariff con cessions on the product
concerned.
7.119. India has stated that the safeguard measure at issue is a result of the obligations incurred
by India under Article II and Article XXIV of the GATT 1994 collectively. India argues that it considers
its FTAs to constitute obligations under Article XXIV of the GATT 1994 and refers to the
Indian competent authority's discussion of the FTAs with Korea and Japan.200 India has also argued
that the challenged measure suspend ed, in addition to Article XXIV of the GAT T 1994,
India's obligations under the second sentence of Article II:1(b) of the GATT 1994 , which prohibits
Members from imposing "all other duties or charges of any kind imposed on or in connection with …
importation".201
7.120. As we have noted above, Article XXIV of the GATT 1994 does not impose an obligation on
Members to enter into FTAs or to provide a certain level of customs duties to its FTA partners. In
any event, India's argument on Article XXIV is an ex post explanation, because the Indian competent
authority's consideration of the effect of the GATT obligations does not include any reference to the
obligations with respect to customs unions and free-trade areas contained in Article XXIV.
7.121. With respect to Article II:1(b), we recall that , in its Final Findings, the Indian competent
authority referred to India's tariff concession on the product concerned – a bound rate of 40% ad
valorem. The Indian competent authority cited, not the tariff concession, but the "low applied tariffs"
as a reason for the increase in imports into India. The findings contain no discussion on the alleged
effect of India 's obligations under either the first sentence of Article II:1(b), with respect to tariff
bindings, or the second sentence, with respect to other duties or charge s. Therefore, we consider
that the Indian competent authority failed to provide a reasoned and adequate explanation with
regard to the effect of the relevant obligations of the GATT 1994.
7.5.7 Conclusion
7.122. In light of the foregoing, we conclude that India acted inconsistently with Article XIX:1(a) of
the GATT 1994 by failing to demonstrate that the unforeseen developments and the effect of

194 Japan's first written submission, para. 155; second written submission, para. 80 (referring to Panel
195 Japan's first written submission, para. 156.
196 Japan's first written submission, paras. 157 and 161.
197 Japan's first written submission, paras. 162-163; second written submission, paras. 81-82.
198 India's first written submission, para. 114 (referring to Appellate Body Report, Argentina –
Footwear (EC), para. 91).
199 India's first written submission, paras. 115-116 (quoting Panel Reports, US – Steel Safeguards,
paras. 10.139-10.140).
200 India's first written submission, para. 117 (referring to Final Findings, (Exhibit IND-11), para. 55).
201 India's responses to Panel question Nos. 11 and 91.

GATT obligations have resulted in an increase in imports of the product concerned causing or
threatening to cause serious injury to the relevant domestic industry in India.
7.6 Whether India acted inconsistently with Articles 2.1 and 4.2(a) of the Agreement on
Safeguards and Article XIX:1(a) of the GATT 1994 with respect to the increase in imports
7.6.1 Introduction
7.123. Japan claims that India 's examination of the increase in imports is inconsistent with
Articles 2.1 and 4.2(a) of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.202
Specifically, Japan submits that the Indian competent authority failed to ( i) make a qualitative
analysis of the increase in imports; (ii) demonstrate that its determination of an increase in imports
is based on "objective data" ; (iii) demonstrate that the increase in imports was "recent enough,
sudden enough, sharp enough, and significant enough"; and (iv) ensure that the examined increase
in imports is "a result of" unforeseen developments and the effect of GATT obligations.203
7.124. Before addressing Japan 's arguments, we will recall the Indian competent
authority's findings with regard to increased imports and set out our understanding of the relevant
provisions of the Agreement on Safeguards.
7.6.2 The Indian competent authority's determination on increased imports
7.125. In its Final Findings, the Indian competent authority found that there had been an increase
in imports of the product concerned during the POI in absolute terms and relative to production.
7.126. The Indian competent authority evaluated the volume of imports during the POI, which
included the following three financial years ( i) 2013 -2014, (ii) 2014 -2015, and ( iii) 2015 -2016
(annualized).204 The first two years covered the volume of imports during full financial years from
1 April 2013 until 31 March 2015. The volume of imports for the last year (2015 -2016) was
"annualized" on the basis of the data for the first q uarter of 2015 -2016 (from 1 Apri l to
30 June 2015) by multiplying by four the volume of imports for the first quarter.205
Table 1: Increase in imports
Financial Year Total Imports
(MT) Trend Production in
India (MT)
% of imports
with respect to
production
2013-2014 1,252,441 100 25,510,777 5
2014-2015 2,644,911 211 26,395,795 10
2015-2016(Q1) 881,233 6,646,258
2015-2016(A) 3,524,932 281 26,585,032 13
Source: Final Findings, (Exhibits JPN-11/IND-11), paras. 41 and 43, p. 197.
7.127. The Indian competent authority noted that:
It is apparent from the data in the table above that there is a surge in import in absolute
terms i.e. Import increased from [1,252,441] MT during the period 2013 -14 to
[3,524,932] MT during 2015-16 (Annualised).
The imports of product under consideration in India during the period of investigation
have increased in relation to all Indian production. The import with respect to total
production increased from 5% in 2013-14 to 13% in 2015-16(A).206

202 Japan also claims that India acted inconsistently with Articles 3.1 and 4.2(c) of the Agreement on
Safeguards by failing to provide a reasoned and adequate explanation of its determination regarding the
increase in imports. This claim is addressed in section 7.11 below.
204 Preliminary Findings, (Exhibits JPN-7/IND-7), para. 9, p. 13; Final Findings,
205 India's first written submission, para. 139; responses to Panel question Nos. 31 and 32.
206 Final Findings, (Exhibits JPN-11/IND-11), paras. 42-43, p. 197.

7.128. Based on these data, th e Indian competent authority concluded that there was "a sudden,
sharp and significant surge in imports" during the POI both in absolute terms and relative to total
domestic production.207
7.6.3 Articles 2.1 and 4.2(a) of the Agreement on Safeguards
7.129. Article 2.1 reads as follows:
A Member may apply a safeguard measure to a product only if that Member has
determined, pursuant to the provisions set out below, that such product is being
imported into its territory in such increased quantities, absolute or relative to domestic
production, and under such conditions as to cause or threaten to cause serious injury
to the domestic industry that produces like or directly competitive products.208
7.130. Article 4.2(a) provides in relevant part that:
In the investigation to determine wh ether increased imports have caused or are
threatening to cause serious injury to a domestic industry under the terms of this
Agreement, the competent authorities shall evaluate all relevant factors of an objective
and quantifiable nature having a bearing on the situation of that industry, in particular,
the rate and amount of the increase in imports of the product concerned in absolute
and relative terms[.]
7.131. Article 2.1 of the Agreement on Safeguards sets out conditions for the application of
safeguard measures. In particular, a Member applying a safeguard measure has to determine that
the product "is being imported into its territory in such increased quantities, absolute or relative to
domestic production, and under such conditions" as to cause or threaten to cause serious injury to
the domestic industry. Article 4.2(a) of the Agreement on Safeguards further provides that a
competent authority shall evaluate "the rate and amount of the increase in imports of the product
concerned in absolute and relative te rms" as one of the relevant factors "of an objective and
quantifiable nature" having a bearing on the situation of the domestic industry. In Argentina –
Footwear (EC) , the panel noted that Articles 2.1 and 4.2(a) are both relevant provisions for
examining an increase in imports as a basic prerequisite for the application of safeguard measures.209
Article 2.1 "sets forth the conditions for the application of a safeguard measure", while Article 4.2(a)
provides "the operational requirements for determining wheth er the conditions identified in
Article 2.1 exist".210
7.132. Article 2.1 requires a competent authority to examine the increase in imports in both
absolute terms and relative to domestic production. Previous panels and the Appellate Body have
stated that Article 2.1 does not refer to just any increase in imports, but to an increase in
"such … quantities" as to cause or threaten to cause serious injury to the domestic industry. 211 The
Appellate Body clarified that the expression "in such increased quantities" in Article 2.1 requires that
"the increase in imports must have been recent enough, sudden enough, sharp enough, and
significant enough, both quantitatively and qualitatively, to cause or threaten to cause 'serious
injury'".212
7.133. In turn, Article 4.2(a) requires that the increase in imports must also be evaluated "in its full
context, in particular with regard to its 'rate and amount'".213 The obligation under Article 4.2(a) to
evaluate the rate and amount of the increased imports requires a competent authority to analys e
the intervening trends of imports over the POI (rather than just comparing the end points). 214 The

207 Final Findings, (Exhibits JPN-11/IND-11), paras. 40-44, p. 197.
208 Fn omitted.
209 Panel Report, Argentina – Footwear (EC), para. 8.138.
210 Panel Report, Argentina – Footwear (EC), paras. 8.139-8.140.
211 Panel Report, Argentina – Footwear (EC), para. 8.161; Appellate Body Report, Argentina –
Footwear (EC), para. 129.
212 Appellate Body Report, Argentina – Footwear (EC), para. 131.
213 Panel Report, Argentina – Footwear (EC), para. 8.161.
214 Panel Report, Argentina – Footwear (EC), para. 8.159 and fn 526; Appellate Body Report,
Argentina – Footwear (EC), para. 129.

use of the present tense in the phrase "is being imported" suggests that a competent authority must
examine the recent imports.215 The Appellate Body noted that "within the period of investigation as
a whole, evidence from the most recent past will provide the strongest indication of the likely future
state of the domestic industry".216 At the same time, the data from the most recent past should be
assessed in the light of the longer-term trends in the data for the entire POI.217
7.6.4 Evaluation by the Panel
7.134. Japan's claim regarding the Indian competent authority 's determination on the increase in
imports raises two main questions before us . First, whether by using annualized import data
for 2015-2016 the Indian competent authority was basing its determination regarding an increase
in imports on objective data. Second, whether the Indian competent authority examined the increase
in imports both quantitatively and qualitatively and sufficiently explained its conclusions in the Final
Findings that the increase in imports was "recent enough, sudden enough, sharp e nough, and
significant enough".
7.135. We begin by considering Japan 's allegation that by using annualized data for 2015-2016,
the Indian competent authority failed to base its determination regarding an increase in imports on
"objective data" and thus acted inconsistently with Article 4.2(a).
7.136. Japan argues that the Indian competent authority failed to explain why it was reasonable to
use annualized data for 2015 -2016, extrapolating data from the first quarter to the rest of the
year.218 India submits that the Agreement on Safeguards does not provide any guidance regarding
the analysis of the data, therefore the method applied by the Indian competent authority cannot be
questioned unless it is shown that such method is unreasonable and biased.219 India argues that the
annualization of data is a logical method, when the only data available pertains to a short period of
the year.220 India submits that the data for one quarter was annualized to make it comparable to
the full year data of the preceding periods.221
7.137. Pursuant to Article 4.2(a), "the rate and amount of the increase in imports" is one of the
factors of "an objective and quantifiable nature" that must be evaluated by a competent authority.
In US – Lamb, the Appellate Body stated that the requirement of "objectivity and quantifiability"
applies, not only to factors, but also to data:
We recognize that the clause "of an objective and quantifiable nature" refers expressly
to "factors", but not expressly to data. We are, however, convinced that factors can
only be "of an objective and quantifiable nature" if they allow a determination to be
made, as required by Article 4.2(b) of the Agreement on Safeguards, on the basis of
"objective evidence". Such evidence is, in principle, objective data. The words "factors
of an objective and quantifiable nature" imply, therefore, an evaluation of objective data
which enables the measurement and quantification of these factors.222
We agree with this statement and consider that a competent authority must base its evaluation of
factors under Article 4.2(a), including the rate and amount of the increase in imports, on objective
data and ev idence. Although Article 4.2(a) does not provide any guidance regarding the
methodology for evaluating the increase in imports, the evaluation made by the competent
authorities must be objective and unbiased.223

215 Appellate Body Report, Argentina – Footwear (EC), para. 130.
216 Appellate Body Report, US – Lamb, para. 137.
217 Appellate Body Report, US – Lamb, para. 138.
218 Japan's first written submission, paras. 206-210; second written submission, paras. 111-117.
219 India's first written submission, para. 139 (referring to Panel Report, US – Line Pipe, para. 7.203).
220 India's first written submission, para. 139.
221 India's responses to Panel question Nos. 31, 33, and 95.
222 Appellate Body Report, US – Lamb, para. 130. (emphasis original)
223 In US – Line Pipe, in determining whether the US methodology for the analysis of increased imports
complied with the Agreement on Safeguards and the GATT 1994, the panel considered "whether the
methodology selected is unbiased and objective, such that its application permits an adequate, reasoned and
reasonable explanation of how the facts in the record before the ITC support the determination made with
respect to increased imports". (Panel Report, US – Line Pipe, para. 7.194).

7.138. As noted above, in the underlying investigation, the Indian competent authority selected the
POI from 2013-2014 to 2015-2016 (annualized on the basis of the first quarter), i.e. the POI covers
the following three financial years ( i) 2013 -2014, (ii) 2014 -2015, and ( iii) 2015 -2016
(annualized).224 The first two years covered the period from 1 April until 31 March. The volume of
imports for the last year (2015 -2016) was annualized on the basis of the data for the first quarter
of 2015-2016 (from 1 April to 30 June 2015). 225 In response to a question from the Panel, India
clarified that the POI was, in fact, from 1 April 2013 to 30 June 2015. 226 This period covers
two financial years (from 1 April 2013 to 31 March 2015) and three months (1 April to
30 June 2015). India explained that the first quarter of 2015-2016 was only annualized to make the
data of this period comparable to the full year data of the preceding periods.227
7.139. The methodology used by the Indian competent authority, where data were annualized in
order to make them comparable with those of previous years, warrants a compelling explanation as
to why such methodology was reliable and why the figures corresponding to the first qu arter
of 2015-2016 could be extrapolated for the entire financial year. The Preliminary and Final Findings
do not contain any explanation in this respect.
7.140. The section of the Final Findings titled "Examination of Post POI data" provides data on the
volume of imports for the second quarter of 2015 -2016. The Indian competent authority obs erved
that the volume of imports for 2015-2016, annualized on the basis of the first and second quarters,
was 4,587,168 tonnes, which is 1,062,236 tonnes more than the volume of imports for 2015-2016,
annualized on the basis of the first quarter only ( 3,524,932 tonnes).228 Although these data show
that the volume of imports had increased by about 30% in the second quarter as compared to the
first quarter of 2015-2016, they cast doubts as to what extent the volume of imports in 2015-2016,
annualized on the bas is of the first quarter, could provide a reasonable basis for comparison with
the preceding periods.
7.141. In addition, the import data provided in the domestic industry 's application show that the
volume of imports fluctuates during a year. The domestic industry provided the data on the volume
of imports in 2014-2015 with quarterly breakdown: first quarter – 421,109 tonnes; second quarter
– 499,941 tonnes; third quarter – 718,494 t onnes; fourth quarter – 900,570 tonnes.229 The
Indian competent authority examined the change in imports during the first two years of the POI
(2013-2014 and 2014 -2015) based on annual data only and did not provide any quarterly
breakdown, which could provide a basis for comparison of impor t trends with quarterly data
of 2015-2016.
7.142. The analysis of the increase in imports must be based on evidence of the actual volume of
imports. As noted before, it should be also based on evidence from the most recent past.230 We
recall that the Indian competent authority initiated the safeguard investigati on on
7 September 2015. Before the Panel, India asserts that the POI was from 1 April 2013 to
30 June 2015, and that the annualized data for the rest of the financial year 2015 -2016 were used
only to make the information comparable to the full year data of the preceding periods. Although
India denies that the data for the first quarter were used to draw conclusion s with regard to the
whole year 231, the Final Findings, cited in paragraphs 7.126-7.127 above, show that the Indian
competent authority relied on the full year of 2015 -2016 (annualized) to examine the trends in
imports and draw conclusions regarding the existence of the import surge.232 Absent any explanation
on methodology, the reliance on annualized data calls into question whether the evaluation of import
trends was based on actual imports, especially pertaining to the third and fourth quarters
of 2015-2016.

224 Preliminary Findings, (Exhibits JPN-7/IND-7), para. 9, p. 13; Final Findings,
225 India's first written submission, para. 139.
226 India's response to Panel question No. 29.
227 India's first written submission, para. 230; responses to Panel question Nos. 29 and 31.
228 Final Findings, (Exhibits JPN-11/IND-11), para. 100, p. 208.
229 Revised Application, (Exhibits JPN-6/IND-20), p. 7.
230 See para. 7.133 above.
231 India's response to Panel question No. 31.
232 Final Findings, (Exhibits JPN-11/IND-11), paras. 40-44, p. 197. See also Preliminary Findings,

7.143. Moreover, the record of the investigation contains import data for the three most recent
years preceding the initiation of the investigation, which could have been used by the Indian
competent authority. Indeed, the domestic industry's application specifically provides information
on the volume of imports from 2011-2012 to June 2015233:
Table 2: Increase in Imports
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
(Quarter 1)
2,219,711 2,120,996 1,292,099 2,540,114 844,840
Source: Revised Application, (Exhibits JPN-6/IND-20), p. 7.
7.144. The Final Findings do not explain why the Indian competent authority did not use this
information and decided instead to annualize the data for 2015 -2016. In response to a question
from the Panel, India noted that since the Agreement on Safeguards does not indicate how long the
POI should be, a competent authority enjoys certain discretion to select the POI .234 Although the
competent authorities can determine in each cas e the relevant POI to evaluate the increase in
imports, the Final Findings do not indicate why the Indian competent authority did not use a period
for which information was available and decided instead to annualize the data for 2015-2016.
7.145. For the above reasons, we consider that the Indian competent authority failed to evaluate
the rate and amount of the increase in imports on the basis of objective data, when it analysed the
increase in imports at least partly on annualized data.
7.146. Next, we turn to Japan 's allegation that India acted inconsistently with Articles 2.1
and 4.2(a) of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994, by failing to
conduct a qualitative analysis of the increase in imports, since its analysis did not ensure that t he
increase in imports was recent enough, sudden enough, sharp enough and significant enough, both
quantitatively and qualitatively, to cause or threaten to cause serious injury.235
7.147. In particular, Japan submits that the Indian competent authority failed to properly examine
the recent trends in imports in the context of longer-term trends. Japan points out to import trends
before the POI, in 2011 -2012 and 2012 -2013, and argues that the short -term increase between
2013-2014 and the first quarter of 2015 -2016 was only a recovery of imports to their previous
levels.236 Japan submits that the domestic industry referred to import trends in 2011 -2013 in their
application and the interested parties raised the same issue during the investigation, but the Indian
competent authority failed to provide reasons for disregarding this data. 237 According to Japan, i n
order to make a qualitative analysis, the Indian competent authority should have evaluated the real
significance of this short -term trend during the POI in light of longer -term trends or any other
methods so as to ensure that this short -term upward trend was recent enough, sudden enough,
sharp enough and significant enough.238 Although Japan does not challenge the selection of the POI
as such, it considers that a competent authority 's discretion to select the POI is not unlimited and
must be exercised with due regard to the obligations provided in the Agreement on Safeguards that
relate to the investigation process.239 Japan also argues that the Indian competent authority failed
to provide an adequate explanation as to why it considered that the increase in imports was recent
enough, sudden enough, sharp enough and significant enough, both quantitatively and qualitatively,
as to cause and threaten to cause serious injury.240

233 Revised Application, (Exhibits JPN-6/IND-20), p. 7.
234 India's response to Panel question No. 36.
235 Japan's second written submission, para. 103; response to Panel question No. 94, para. 38.
236 Japan's first written submission, paras. 185, 187-188, and 190 (referring to Panel Report,
237 Japan's first written submission, para. 192 (referring to Final Findings, (Exhibit JPN-11), para. 30,
p. 195).
238 Japan's second written submission, para. 103.
239 Japan's first written submission, paras. 194-195.
240 Japan's first written submission, paras. 211-215; second written submission, para. 18.

7.148. India submits that the selected POI was long enough to enable the Indian competent
authority to examine the recentness of the increase in imports in the context of the longer -term
trends.241 India asserts that the Agreement on Safeguards does not provide any guidance regarding
the selection of the POI and that a competent authority enjoys certain discretion for determining the
POI.242 India denies Japan 's allegation that the selected POI distorted the pict ure regarding the
trends in imports. India submits that a mixed trend or even a downturn in imports does not mean
that the serious injury to the domestic industry ceases to exist. According to India, the data show
that although the imports declined before the POI, they have increased in recent terms and exceeded
the quantities of the period preceding the POI. 243 India adds that, even a ssuming that the period
of 2011-2012 had been included into the POI, it would have still shown that the imports had
increased both in absolute terms and relative to the domestic production.244
7.149. As we have discussed above, Article 2.1 of the Agreement on Safeguards and Article XIX:1
of the GATT 1994 require a competent authority to determine not just any increase in imports, but
an increase in "such … quantities" as to cause or threaten to cause serious injury to the domestic
industry.245 This implies both a quantitative and a qualitative consideration of the increase in imports.
The increase in imports must be considered "in its full context", including in particular its "rate and
amount" as required by Article 4.2(a).246 It follows that the enquiry with regard to the increase in
imports requires the evaluation of the trends in imports or changes in import levels over the entire
POI. While the Agreement on Safeguards does not provide any guidance with regard to the selection
of the POI and a competent authority has certain discretion in this regard247, the POI should be long
enough to provide an adequate basis for comparison of import trends. In US – Line Pipe, the panel
noted that the POI should allow a competent authority to focus on recent imports , while being
sufficiently long so that the authority can draw conclusions regarding the existence of increased
imports.248
7.150. In our view, the POI of two years and three months did not allow the Indian competent
authority to make a quantitative and qualitative objective analysis. India based its evaluation of the
increase in imports on the import data pertaining to two years and three months, which in effect
provides two points of comparison of the volume of imports in 2013 -2014 and in 2014-2015. With
regard to the third point of comparison, 2015-2016, as we have found above, the Indian competent
authority did not have objective data for the full financial year. The import data for 2015-2016 was
based on imports for the first quarter of this year, which undermines the trend analysis of changes
in imports in 2015 -2016 compared to the previous two yea rs. Furthermore, the data for the last
year of POI is of particular importance, since it reflects the most recent trends in imports. Considering
the above, we conclude that India acted inconsistently with Articles 2.1 and 4.2(a) of the Agreement
on Safeguards and Article XIX:1 of the GATT 1994, by failing to objectively examine trends in imports
and to provide a reasoned explanation with regard to the conclusion in the Final Findings that there
was "a sudden, sharp and significant surge in imports" during the POI.249
7.151. Finally, Japan argues that India acted inconsistently with Article 2.1 of the Agreement on
Safeguards and Article XIX of the GATT 1994 by failing to ensure that the examined increase in
imports is a result of unforeseen developments and of the effect of GATT obligations. Japan submits
that the Indian competent authority considered all imports and failed to ensure that these imports
resulted from unforeseen developments and the effect of the obli gations incurred under the
GATT 1994.250 Since we have found above that India acted inconsistently with Article XIX:1 of the
GATT 1994 with regard to its consideration of the unforeseen d evelopments, the effect of
GATT obligation and the increase in imports, we do not need to address this argument of Japan.

241 India's first written submission, paras. 125-127 (referring to Appellate Body Report, US – Lamb,
para. 138 and fn 88).
242 India's first written submission, para. 124 (referring to Appellate Body Report, US – Line Pipe,
paras. 7.196-7.197 and 7.201).
243 India's first written submission, para. 133.
244 India's first written submission, paras. 128-130.
245 Panel Report, Argentina – Footwear (EC), para. 8.161; Appellate Body Report, Argentina –
Footwear (EC), para. 129.
246 Panel Report, Argentina – Footwear (EC), para. 8.161.
247 Panel Report, US – Line Pipe, para. 7.196.
248 Panel Report, US – Line Pipe, para. 7.201.
249 Final Findings, (Exhibits JPN-11/IND-11), para. 44, p. 197.
250 Japan's first written submission, paras. 180-183; second written submission, paras. 97-100.

7.6.5 Conclusion
7.152. In light of the foregoing, we find that India 's determination on the increase in imports is
inconsistent with Articles 2.1 and 4.2(a) of the Agreement on Safeguards and Article XIX:1 of the
GATT 1994.
7.7 Whether India acte d inconsistently with Articles 2.1, 4.1(a), 4.1(b), 4.1(c), 4.2(a),
and 4.2(b) of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 with
respect to its determination of the domestic industry
7.7.1 Introduction
7.153. Japan submits that India failed to determine the domestic indu stry as required by
Article 4.1(c) of the Agreement on Safeguards. 251 Japan asserts that the concept of "domestic
industry" is critical to the injury and causal link analysis and alleges that the Indian competent
authority's injury and causation determinatio ns are consequently inconsistent with Articles 2.1,
4.1(a), 4.1(b), 4.2(a), and 4.2(b) of the Agreement on Safeguards as well as with Article XIX:1(a)
of the GATT 1994.252
7.7.2 Article 4.1(c) of the Agreement on Safeguards
7.154. Article 4.1(c) of the Agreement on Safeguards reads as follows:
[I]n determining injury or threat thereof, a "domestic industry" shall be understood to
mean the producers as a whole of the like or directly competitive products operating
within the territory of a Member, or those whose collective output of the like or directly
competitive products constitutes a major proportion of the total domestic production of
those products.
7.155. Article 4.1(c) of the Agreement on Safeguards provides two options for the definition of the
"domestic industry" (i) "the producers as a whole of the like or directly competitive products" ; or
(ii) the producers whose output constitutes "a major proportion" of the total domestic production of
the like or directly competitive products.253
7.156. The Agreement on Safeguards does not provide any specific percentage or share of the
domestic production, which would meet the requirement of "a major proportion".254 Neither does it
establish any methodology or procedure that competent authorities must follow for determining a
major proportion of the total domestic production. The consideration as to what constitutes "a major
proportion" depends on the specific circumstances of each case.
7.157. The Appellate Body has clarified, in the context of a similar provision in the Anti -Dumping
Agreement, that the term "major proportion" means " a relatively high proportion of the total
domestic production" .255 The term "major proportion" has both "quantitative and qualitative
connotations".256 The qualitative element aims to ensure that "the domestic producers of the like
product that are included in the definition of domestic industry are representative of the total
domestic production ".257 The Appellate Body has stated that there is "an inverse relationship "
between the proportion of total production included in the domestic industry and the existence of a
material risk of distortion in the definition of domestic industry and in the assessment of injury. 258

251 Japan's first written submission, paras. 216-217 and 243; second written submission, para. 120.
252 Japan's first written submission, paras. 244-246.
253 Emphasis added.
254 Appellate Body Report, EC – Fasteners (China), para. 411.
255 Appellate Body Report, EC – Fasteners (China), para. 412. In addition, in Argentina – Poultry
Anti-Dumping Duties, the panel stated that "it is permissible to define the 'domestic industry' in terms of
domestic producers of an important, serious or significant proportion of total domestic production". (Panel
Report, Argentina – Poultry Anti-Dumping Duties, paras. 7.341-7.342).
256 Appellate Body Report, EC – Fasteners (China) (Article 21.5 – China), paras. 5.302-5.303.
257 Appellate Body Report, Russia – Commercial Vehicles, para. 5.13.
258 Appellate Body Reports, EC – Fasteners (China) (Article 21.5 – China), paras. 5.302-5.303; Russia –
Commercial Vehicles, para. 5.13.

Specifically, "the lower the proportion, the more sensitive an investigating authority will have to be
to ensure that the proportion used substantially reflects the total production of the producers as a
whole".259 At the same time, "the higher the proportion, the more p roducers will be included, and
the less likely the injury determination conducted on this basis would be distorted".260
7.7.3 Evaluation by the Panel
7.158. In the investigation at hand, the Indian competent authority defined the domestic industry
on the basis of the sec ond option, i.e. "a major proportion" of the total domestic production of the
like or directly competitive products. The "domestic industry", as defined by the Indian competent
authority, comprised producers representing 70% of the total domestic productio n in 2013 -2014,
68% in 2014-2015, and 67% in the first quarter of 2015-2016.261 The domestic industry comprised
three out of six producers of the product concerned in India, namely: Steel Authority of India Limited,
Essar Steel India Limited, and JSW Steel L imited, who filed the application for the initiation of the
safeguard investigation (the applicants). 262 Questionnaires were sent to all six known domestic
producers, but replies were received only from the applicants.263
7.159. Japan submits that if a competent auth ority defines the domestic industry based on the
second option provided in Article 4.1(c) (i.e. those producers whose collective output constitutes "a
major proportion" of the total domestic production), it must ensure that the process of defining the
domestic industry does not give rise to a material risk of distortion in the injury and causation
determination.264 Japan argues that the Indian competent authority 's approach to define the
domestic industry introduced a material risk of distortion, because the record of the investigation
shows that the producers outside the domestic industry as defined performed substantially
differently, in particular in terms of sales, market share, and production. Japan refers to this fact to
argue that the producers comprising the domestic industry did not "substantially reflect" the total
domestic production.265 For Japan, the Indian competent authority relied on a "purely quantitative
test", when it concluded that the applicants necessarily constituted "a major propor tion" under
Article 4.1(c) if they represented at least 50% of the total production. 266 In addition, Japan takes
issue with the fact that the domestic industry comprised only the applicants. Japan argues that the
domestic industry was defined based on "a sel f-selection process" by the domestic producers
themselves, which does not exclude that the domestic producers "purposively" included low
performing producers into the "domestic industry" while ignoring high performing producers.267
7.160. India responds that since the share of domestic production of producers comprising the
domestic industry is more than 50%, the competent authority does not need to examine the rest of
the producers. India asserts that examining the rest of producers would result in merging the two
options provided in Article 4.1(c).268 India further submits that since the Indian competent authority
examined data with respect to 67% of the total domestic production, there is no basis to suggest
that the injury or causation analysis is distorted. 269 India notes that even though there is no
requirement to examine all producers, the Indian competent authority nevertheless sent
questionnaires to all known producers, but the rest of the producers did not cooperate.270 Regarding
Japan's reference to sales and market share, India argues that the data on sales and market share
have no bearing on the definition of the domestic industry. Furthermore, India submits that once

259 Appellate Body Report, EC – Fasteners (China), para. 412.
260 Appellate Body Report, EC – Fasteners (China), para. 414.
261 Final Findings, (Exhibits JPN-11/IND-11), para. I(f), p. 167. As explained by India, the domestic
industry as defined by the Indian competent authority covered both captive and non-captive segments of
production. (India's response to Panel question No. 42).
262 Preliminary Findings, (Exhibits JPN-7/IND-7), para. 1, p. 12; Final Findings,
263 Final Findings, (Exhibits JPN-11/IND-11), para. 4, pp. 119-120; India's first written submission,
paras. 159-160.
264 Japan's first written submission, para. 235.
265 Japan's first written submission, paras. 237-241; second written submission, para. 127.
266 Japan's first written submission, para. 236; second written submission, paras. 122-125.
267 Japan's second written submission, para. 126.
268 India's first written submission, paras. 157-158.
270 India's first written submission, paras. 159-160; second written submission, para. 14.

the domestic industry has been defined, the data with regard to producers outside the domestic
industry do not have any bearing on the determination of either injury or causation.271
7.161. We begin by addressing Japan's argument that the Indian competent authority defined the
domestic industry on the basis of a quantitative approach only, and failed to conduct any qualitative
analysis. To support this argument, Japan refers to the Appellate Body 's statement that the term
"major proportion" has both quantitative and qualitative connotations. We note that the
Appellate Body linked the qualitative analysis to t he proportion of the domestic producers
represented in the domestic industry. If the proportion of the domestic producers is sufficiently high,
it is likely to meet both the quantitative and the qualitative aspects of the analysis, because the
domestic ind ustry so defined sufficiently reflects the totality of the domestic producers. The
Appellate Body explained:
[T]here is an inverse relationship between, on the one hand, the proportion of producers
represented in the domestic industry and, on the other han d, the absence of a risk of
material distortion in the definition of the domestic industry and in the assessment of
injury. We thus read the requirement in Article 4.1 that domestic producers ' output
constitute a "major proportion" as having both quantitat ive and qualitative
connotations.
When the domestic industry is defined as the domestic producers whose collective
output constitutes a major proportion of total domestic productio n, a very high
proportion that " substantially reflect s the total domestic p roduction" will very likely
satisfy both the quantitative and the qualitative aspect of the requirements of
Articles 4.1 and 3.1. However, if the proportion of the domestic producers ' collective
output included in the domestic industry definition is not sufficiently high that it can be
considered as substantially reflecting the totality of the domestic production, then the
qualitative element becomes crucial in establishing whether the definition of the
domestic industry is consistent with Articles 4.1 and 3.1.272
7.162. From a quantitative point of view, the domestic industry, as defined by the Indian competent
authority, represented a high proportion of the domestic production in relation to th e total.
Specifically, the domestic industry comprised between 67% and 70% of the total domestic
production and can in principle be considered as a substantial reflection of the domestic producers
as a whole.
7.163. Japan supports its claim that the Indian competent authority failed to conduct a qualitative
analysis by the fact that the producers outside the domestic industry performed better. Japan
contends that the Indian competent authority defined the domestic industry in a manner that
introduced "a material r isk of distortion" of the injury analysis, because the situation of producers
outside of the domestic industry improved and they had different trends in sales, market share, and
production than the producers included into the domestic industry. Japan considers that factors such
as sales, market share, and production of the domestic producers outside the domestic industry may
be relevant in confirming whether the domestic industry "substantially reflects" the total domestic
production.273 Specifically, Japan asserts that (i) the sales of the domestic industry slightly increased
over the POI, while the sales of the other domestic producers increased substantially over the same
period274; (ii) the market share of the domestic industry decreased over the POI, while the market
share of the other domestic producers increased275; and (iii) the production of the domestic industry

271 India's first written submission, paras. 164 and 167.
272 Appellate Body Report, EC – Fasteners (China) (Article 21.5 – China), paras. 5.302-5.303
(fn omitted). In that case, the domestic industry had been defined "at the lower end of the spectrum",
representing 27% of the total domestic production.
273 Japan's response to Panel question No. 45(a), para. 67.
274 The sales of the domestic industry (captive and non-captive) were 14,616,565 tonnes in 2013-2014;
14,968,955 tonnes in 2014-2015; and 15,645,704 tonnes in 2015-2016 (annualized). The sales of other Indian
producers were 6,995,047 tonnes in 2013-2014; 7,914,137 tonnes in 2014-2015; and 8,986,612 tonnes
in 2015-2016 (annualized). (Japan's first written submission, para. 238).
275 The domestic industry's market share (covering captive and non-captive segments of the market)
was 64% in 2013-2014; 59% in 2014-2015; and 56% in 2015-2016 (annualized). The market share of other
Indian producers was 31% in 2013-2014; 31% in 2014-2015; and 32% in 2015-2016 (annualized).
(Japan's first written submission, para. 239).

remained stable, while the production of the other Indian producers substantially increased. 276 For
Japan, these trends suggest that the alleged increase in imports affected the domestic industry and
the other producers differently.
7.164. During the investigation, the Indian competent authority rejected a similar argument of
interested parties that the applicants did not meet the requirement of "a major proportion", given
that their market share was 45% in 2013-2014, while the market share of other domestic producers
was 51%. The Indian competent authority explained the market share is not a "measure of standing"
for defining the domestic industry.277 India repeats this argument before the Panel and argues that
under Article 4.1(c) the domestic industry is defined on the basis of a proportion in domestic
production. We agree with India. Article 4.1(c) specifically provides that "a major proportion" is
defined on the basis of the "collective output" of the like or directly competitive products in "the total
domestic production" of those products. When the competent authority defines the "domestic
industry" as the producers "whose collective output of the like or directly competitive products
constitutes a major proportion of the total domestic production of those products" pursuant to
Article 4.1(c), the focus is on "the question of how much production must be represented by those
producers making up the domestic industry".278 Article 4.1(c) does not require a competent authority
to examine the domestic producers' market share and sales in order to define the domestic industry.
Therefore, we reject Japan's argument that the Indian competent authority needed to consider the
market share and sales of the other domestic producers, when it defined the domestic industry.279
7.165. At the same time , once the domestic industry is defined, in accordance with Article 4.2(a)
the competent authority must examine the trends in its production, sales, and market share as part
of the mandatory relevant factors in the evaluation of the domestic industry 's situation. The
performance of producers outside the domestic industry (including their production, sales, and
market share) may be considered as a non -attribution factor under Article 4.2(b) and taken into
account in the final determination of whether the domestic industry suffers serious injury caused by
the increased imports.
7.166. Furthermore, Japan argues that the Indian competent authority's definition of the domestic
industry involved "a self -selection process" by the domestic producers themselves, because only
applicants were included into the definition of the domestic industry. According to Japan, this
approach might suggest that better performing producers were intentionally excluded from t he
domestic industry. In this respect, we note that it is not unusual that the weaker -performing
producers take an initiative to start and participate in a trade remedy investigation, while better
performing producers may choose a passive approach. This un derstanding is consistent with the
panel's statement in China – Autos (US) in the context of an anti-dumping dispute:
In our view, the possibility that weaker -performing producers in a given industry will
more strongly support an AD or CVD investigation or be more likely to participate
actively is simply a reflection of the realities of trade remedy actions. The possibility of
imposition of definitive AD and/or CVD measures will afford all producers relief from
lower-priced imports, but producers performing less well will tend to have a greater
incentive to seek initiation of and participate in an investigation.280

276 The domestic industry's production was 17,881,187 tonnes in 2013-2014; 17,836,937 tonnes
in 2014-2015; and 17,827,180 tonnes in 2015-2016 (annualized). The production of other Indian producers
was 7,629,590 tonnes in 2013-2014 tonnes; 8,558,858 tonnes in 2014-2015; and 8,757,852 tonnes
in 2015-2016 (annualized). (Japan's first written submission, para. 241).
277 Final Findings, (Exhibits JPN-11/IND-11), para. 25, p. 194.
278 Appellate Body Report, EC – Fasteners (China), para. 411. (emphasis original)
279 We also note Japan's argument that in Russia – Commercial Vehicles the Appellate Body upheld the
panel's findings, in the context of a similar provision in the Anti-Dumping Agreement, that the investigating
authority had not complied with the "major proportion" requirement by failing to include one producer in the
domestic industry although the other producer included in the domestic industry represented 87.9% share of
total domestic production of the like product. The facts in Russia – Commercial Vehicles are different from
those in this case. In Russia – Commercial Vehicles, the panel's finding was based on the fact that the
investigating authority defined the domestic industry as one producer, representing 87.9% of total production,
after it had received the questionnaire responses from two domestic producers producing like products.
(Panel Report, Russia – Commercial Vehicles, para. 7.16).
280 Panel Report, China – Autos (US), paras. 7.224-7.225.

7.167. We note the cautionary words of the Appellate Body that, w hen the domestic industry is
defined as the dome stic producers whose output constitutes a major proportion of total domestic
production, if the proportion is not sufficiently high, then a qualitative element becomes crucial in
establishing whether the domestic industry has been appropriately defined.281 This situation may
arise, for example, in the case of a fragmented industry with numerous producers, when there are
practical constraints on an authority 's ability to obtain information and therefore a "major
proportion" may be lower than what would be ordinarily permissible in a less fragmented industry.282
This is not the situation in the present case. As noted above, the Indian competent authority included
in the definition of the domestic industry a proportion of the domestic producers ' output that was
high enough that it can constitute a substan tial reflection of the total domestic production.
Accordingly, the definition of the domestic industry would very likely satisfy both the quantitative
and the qualitative elements of the definition in Article 4.1(c) of the Agreement on Safeguards. Japan
has failed to demonstrate that, despite such high proportion, the domestic production as defined by
the Indian competent authority was not representative of the total domestic production in India.
7.168. Considering the above, we find that Japan has not demonstrated that India failed to meet
the requirement of "a major proportion" under Article 4.1(c) of the Agreement on Safeguards.
Accordingly, we also reject Japan 's consequential claims in this regard un der Articles 2.1, 4.1(a),
4.1(b), 4.2(a), and 4.2(b) of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.
7.8 Whether India acted inconsistently with Articles 2.1, 4.1(a), 4.1(b), and 4.2(a) of the
Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 with respect to its
determination of serious injury and threat of serious injury
7.8.1 Introduction
7.169. With respect to India 's determination of serious injury and threat of serious injury, Japan
has brought the following claims:
a. that India acted i nconsistently with Articles 4.1(a) and 4.2(a) of the Agreement on
Safeguards, by failing to properly evaluate certain injury factors (such as the share of the
domestic market taken by increased imports, prices, profits and losses) and by failing to
provide reasoned and adequate explanation regarding other factors showing positive
trends;
b. that India acted inconsistently with Article 4.2(a), by failing to base its analysis of the
existence of serious injury on objective data;
c. that India 's alleged determinatio n of threat of serious injury is inconsistent with
Articles 4.1(b) and 4.2(a); and
d. as a consequence of the above alleged violations, that India acted inconsistently with
Article 2.1 of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.
7.170. We w ill first summarize the relevant facts regarding the Indian competent
authority's determination on serious injury and threat of serious injury. We will then turn to
considering Japan's claim regarding the Indian competent authority's evaluation of the share of the
domestic market taken by increased imports, the prices, profits and losses, as well as the
examination of other factors showing positive trends. After that, we will address Japan 's claim that
India failed to base its analysis of serious injury on objective data. Finally, we will consider
Japan's claims regarding an alleged finding of threat of serious injury in addition to the finding of
serious injury.
7.8.2 The Indian competent authority's determination regarding serious injury and threat
thereof
7.171. In its serious injury analysis, the Indian competent authority evaluated the following factors
having a bearing on the situation of the domestic industry (i) production, (ii) changes in the level of

281 Appellate Body Report, EC – Fasteners (China) (Article 21.5 – China), para. 5.303.
282 Appellate Body Report, EC – Fasteners (China), para. 419.

sales, (iii) market shares of imports and the domestic industry, (iv) capacity utilization ,
(v) employment, (vi) productivity, (vii) profits and losses , (viii) inventories, and (ix) price effects.
Following the evaluation of these factors, the Indian competent authority observed that some of the
factors such a s production, sales, capacity utilizatio n, employment, productivity, and inventories
remained stable over the POI. The domestic industry's profitability declined sharply leading to losses,
its prices went down, and its market share declined due to the increase in imports, all of which led
to a serious injury to the domestic industry by way of financial losses.283
7.172. The Indian competent authority evaluated most of the injury factors during the POI, which
includes three financial years (i) 2013-2014, (ii) 2014-2015, and (iii) 2015 -2016 (annualized).284
The trends in prices, profitability, and inventories were evaluated du ring the two financial years
of 2013-2014 and 2014-2015, and the first quarter of 2015-2016.285
7.173. The Indian competent authority observed that the demand for the product concerned in
India increased during the POI . However, d espite the increase in demand, the production,
employment, and sales of the domestic industry "remained stagnant ", while inventories slightly
increased. While the domestic industry increased its production capacity to meet the increased
demand in India, it was unable to increase its capacity utilization, production, and sales. Most of the
share of increased demand was taken by imports. The profitability of the domestic industry
decreased significantly and turned into losses. An evaluation of all relevant factors having a bearing
on the situation of the domestic industry showed a "significant overall impairment" of the situation
of the domestic industry . The Indian competent authority concluded that the domestic industry
suffered serious injury as a result of the increased imports of the product concerned.286
7.174. The Indian competent authority further indicated that, given "the surplus production
capacities available" to foreign producers, the imports would continue to increase. Considering the
likelihood of further increase in imports, it concluded that "there is a threat of further serious injury
to the domestic market. " The Indian competent authority found that t he domestic industry "faces
serious injury and a further threat of greater serious injury".287
7.175. In the final section of the Final Findings titled "Recommendations", the Indian competent
authority concluded that the increased imports of the product concerned "have caused serious injury
and are threatening to cause serious injuries to the domestic producers".288
7.8.3 Serious Injury
7.8.3.1 Articles 4.1(a) and 4.2(a) of the Agreement on Safeguards
7.176. Article 4.1(a) of the Agreement on Safeguards defines "serious injury" for the purposes of
this agreement as "a significant overall impairment in the position of a domestic industry".
Article 4.2(a) reads as follows:
In the investigation to determine whether increased imports have caused or are
threatening to cause serious in jury to a domestic industry under the terms of this
Agreement, the competent authorities shall evaluate all relevant factors of an objective
and quantifiable nature having a bearing on the situation of that industry, in particular,
the rate and amount of t he increase in imports of the product concerned in absolute
and relative terms, the share of the domestic market taken by increased imports,
changes in the level of sales, production, productivity, capacity utilization, profits and
losses, and employment.
7.177. The standard of serious injury under Article 4.1(a) of the Agreement on Safeguards has been
described as a "very high standard of injury". The word "serious" implies a "much higher" standard

283 Final Findings, (Exhibits JPN-11/IND-11), paras. 49-50, pp. 198-200.
284 Preliminary Findings, (Exhibits JPN-7/IND-7), para. 9, p. 13; Final Findings,
(Exhibits JPN-11/IND-11), paras. 31 and 49, pp. 196 and 198-199.
285 Final Findings, (Exhibits JPN-11/IND-11), para. 49 (g), pp.198-199.
286 Final Findings, (Exhibits JPN-11/IND-11), paras. 56-58, p. 201.
287 Final Findings, (Exhibits JPN-11/IND-11), para. 59.
288 Final Findings, (Exhibits JPN-11/IND-11), section R(a), p. 208.

of injury than the word "material" used by the Anti-Dumping and the SCM Agreements.289 In order
to make a determination of serious injury, Article 4.2(a) requires a competent authority to evaluate
"all relevant factors of an objective and quantifiable nature having a bearing on the situation of that
industry". Article 4.2(a) does not provide any specific methodology as to how the relevant factors
shall be examined. The Appellate Body has clarified that an objective assessment of a claim under
Article 4.2(a) has two elements. A panel must consider, first, whether the competent authority has
evaluated all relevant factors and, second, whether the competent authority has provided a reasoned
and adequate explanation of how the facts support its determination.290
7.178. The determination of serious injury must be made on the basis of the "overall position of the
domestic industry, in light of all the relevant factors having a bearing on the situation of that
industry".291 In other words, a competent authority is required to make its determination based on
an evaluation of all injury factors "as a whole". 292 In order to demonstrate a "significant overall
impairment", a competent authority does not need to show a negative trend in each factor listed in
Article 4.2(a), rather "it is the totality of the trends, and their interaction, which must be taken into
account in a serious injury determination ".293 At the same time, positive trends in some factors
would require a compelling explanation by the competent authority of why and how the domestic
industry is still injured despite such positive trends.294
7.8.3.2 Whether the Indian competent authority evaluated relevant injury factors
consistently with Articles 4.1(a) and 4.2(a)
7.8.3.2.1 The share of the domestic market taken by increased imports
7.179. Article 4.2(a) of the Agreement on Safeguards lists the share of the domestic market taken
by increased imports among the mandatory factors that a competent authority must evaluate in
determining whether increased imports have caused or are threatening to cause serious injury to
the domestic industry. In the Final Findings, the Indian competent authority concluded that over the
POI the market share of imports increased from 5% to 13%, while the market share of the domestic
industry decreased from 45% to 37%.295 Japan contends that the Indian competent authority failed
to properly evaluate and provide a reasoned and adequate explanation regarding the effect of the
decline in the domestic industry's market share on the situation of the domestic industry.
7.180. Japan argues that the Indian competent authority failed to explain why a dec rease in the
domestic industry's market share is indicative of serious injury, given that the domestic demand was
expanding and the domestic industry 's sales increased. Japan submits that the Indian competent
authority failed to consider other reasons why the domestic industry maintained its volume of
non-captive sales, but did not meet the increasing demand. Japan suggests, for instance, that the
market share of the domestic industry might have decreased due to either a limited domestic
production capacity to meet increasing demand, the domestic industry's decision to shift its sales to
its captive market, or the increased demand for products that the domestic industry did not
produce.296 Japan also submits that the Indian competent authority focused its anal ysis on the
non-captive segment of the domestic industry, without evaluating the captive segment, and
therefore failed to examine the market share with regard to the entire domestic industry.297
7.181. India responds that Article 4.2(a) of the Agreement on Safeguar ds requires a competent
authority to evaluate "the share of the domestic market taken by increased imports", which is distinct

289 Appellate Body Report, US – Lamb, paras. 124 and 126.
290 Appellate Body Report, US – Lamb, para. 103. See also Panel Reports, Ukraine – Passenger Cars,
291 Panel Report, US – Wheat Gluten, para. 8.80 (referring to Appellate Body Report, Argentina –
Footwear (EC), paras. 138-139).
293 Panel Report, US – Wheat Gluten, para. 8.85 (referring to Appellate Body Report, Argentina –
Footwear (EC), para. 139).
294 Panel Reports, Thailand – H-Beams, para. 7.249; China – Cellulose Pulp, para. 7.129 (in the context
of a similar provision in the Anti-Dumping Agreement).
295 Final Findings, (Exhibits JPN-11/IND-11), para. 49(c), p. 198.
296 Japan's first written submission, paras. 279-280; second written submission, paras. 147-149.
297 Japan's first written submission, paras. 281-290 (referring to Appellate Body Report, US – Hot-Rolled
Steel, paras. 204 and 207); second written submission, paras. 150-155.

from the language in the Anti -Dumping Agreement that refers to a "decline" in the domestic
industry's market share. India argues that, under Article 4.2(a), a competent authority has to
establish whether the domestic industry lost market share to imports. 298 India asserts that its
competent authority found that the market share of imports had increased, whil e the domestic
industry's market share had decreased during the same period. 299 India rejects Japan's claim that
the market share was evaluated only with respect to the non-captive segment.300 India submits that
the Indian competent authority, when considering market share, examined the entire domestic
market, including captive and non-captive sales of the domestic industry, sales of other domestic
producers, and imports.301
7.182. As we indicated above, when addressing a claim under Article 4.2(a), a panel must consider
whether a competent authority has evaluated all relevant factors and has provided a reasoned and
adequate explanation of how the facts support its injury determination. There is no disagreement
between the parties that the Indian competent authority eval uated the market share of increased
imports in its Final Findings. Therefore, the question before us is whether, in its evaluation of the
share of the domestic market taken by increased imports, the Indian competent authority provided
a reasoned and adequa te explanation in the context of the overall examination of the situation of
the domestic industry.
7.183. In the Final Findings, the Indian competent authority considered the following data regarding
the market shares of imports and the domestic industry:
Table 3: Changes in the level of sales and market shares
Financial
Year
Total
Import
(MT)
Sales of DI
(MT)
Sales of
other Indian
Producers
(MT)
Captive
Sale of
DI(MT)
Captive
Sale of
Others
(MT)
Total
Demand
(MT)
Market Share
(%)
DI Imports
2013-14 1,252,441 10,342,565 2,994,323 4,274,000 4,000,724 22,864,053 45 5
2014-15 2,644,911 9,949,214 3,298,273 5,019,741 4,615,864 25,528,003 39 10
2015-16(Q1) 881,233 2,589,929 1,065,972 1,321,497 1,180,681 7,039,312
2015-16(A) 3,524,932 10,359,716 4,263,888 5,285,988 4,722,724 28,157,248 37 13
Source: Final Findings, (Exhibits JPN-11/IND-11), para. 49(b), p. 198.
7.184. Based on these data, the Indian competent authority concluded that:
Imports had a market share of 5% in 2013 -14 which increased to 13%
during 2015-16(A) whereas the market share of Domestic industry decreased from 45%
to 37% during the same period.302
7.185. When addressing the interested parties ' arguments, the Indian competent authority also
noted that the market share of domest ic producers outside the domestic industry inc reased by
two percentage points in 2015-2016 compared to 2014-2015.303
7.186. Further, in its examination of the situation of the domestic industry, the Indian competent
authority stated that:
Imports have taken away most of share of the increase in demand of the subject goods.
In 2014-15, while demand excluding captive increased by [1,303,069] MT and imports
increased much more by [1,392,470] MT. This shows the aggressive manner in which
imports of the [product under co nsideration] are entering the Indian market. The
domestic industry had raised its capacities foreseeing the increasing demand in India.

298 India's first written submission, para. 199.
299 India's first written submission, paras. 199 and 202 (referring to Final Findings, (Exhibit IND-11),
para. 49(c), p. 198).
300 India's first written submission, para. 215.
301 India's first written submission, paras. 206 and 213.
302 Final Findings, (Exhibits JPN-11/IND-11), para. 49(c), p. 198. See also ibid. para. 97, p 207.
303 Final Findings, (Exhibits JPN-11/IND-11), para. 97, p. 207.

However, the domestic industry is unable to increase its capacity utilization, production
and sales.304
7.187. We begin by noting that the product concerned ( hot-rolled coils) is an intermediate good
used in the production of various downstream steel products (e.g. cold rolled sheets, electrical
sheets, coating , and plating sheets). The product concerned can be sold externally (open or
non-captive market) as well as used internally to manufacture downstream steel products (captive
market).305 In the latter situation, the product concerned is not sold into an open o r non-captive
market, where it competes with imports, but is transferred internally to an integrated producer. The
Indian competent authority's findings above show that, when it assessed the share of the domestic
market taken by imports, it considered both the captive and the non-captive segments of the market.
7.188. The market shares of both imports and domestic industry were assessed based on the total
demand (captive and non -captive). The domestic industry lost sales and market share in the
non-captive segment, while it was able to maintain its market share represented by the captive
market (19%).306 Over the POI, the market share of imports increased by 8 percentage points, while
the domestic industry's market share decreased by a similar 8 percentage points. Ot her domestic
producers not part of the domestic industry maintained the same market share during the first two
years of POI (13%) and gained 2 percentage points of the market share (15%) towards the end of
the POI.307 The data in table 3 also shows that the total demand in the Indian market for the product
concerned grew by 23% from 22,864,053 tonnes to 28,157,248 tonnes over the POI. The domestic
industry increased its s ales by 1,029,139 tonnes, which allowed it to keep its market share in the
captive market. The sales of the domestic industry in the non -captive segment, where it competes
with imports, remained nearly the same over the POI. This suggests that the share of the increased
demand in the non -captive segment was taken by imports and by domestic producers not part of
the domestic industry. Given that the market share of imports increased by 8 percentage points and
domestic producers outside the domestic industry gained 2 percentage points, we consider that the
Indian competent authority reasonably concluded that "imports have taken away most of share of
the increase in demand of the subject goods".308
7.189. Next, the Indian competent authority considered that, notwithstan ding the expanded
production capacity309, the domestic industry could not increase its sales and capacity utilization
commensurate with the surge in demand due to the competition with the increased imports.310 The
Final Findings note that the level of capacity utilization of the domestic industry over the POI
remained the same, around 76%.311 In our view, it is not unreasonable for a competent authority to
consider that the fact that the domestic industry could not keep its market share in front of increasing
demand indicates a negative trend in the situation of the domestic industry, considering that the
domestic industry had available production capacity to meet the growing demand.312
7.190. Finally, we consider Japan 's argument that the Indian competent authority focuse d its
analysis on the non -captive segment of the domestic industry, without evaluating the captive
segment. In US – Hot-Rolled Steel, the Appellate Body addressed the question of examining captive
and non-captive markets in an injury analysis in the context of the Anti-Dumping Agreement. The
Appellate Body observed that in an industry "where a signi ficant part of domestic production –
captive production – is shielded by the structure of the domestic market from direct competition
with imports", a comparison between the captive and the merchant markets is important, because

304 Final Findings, (Exhibits JPN-11/IND-11), para. 56, p. 201.
305 Japan's first written submission, para. 45.
306 See table 4 below.
307 Final Findings, (Exhibits JPN-11/IND-11), paras. 49(b) and 97, pp. 198 and 207.
308 Emphasis added.
309 According to the domestic industry's application, in 2011-2013, the domestic industry increased its
production capacity from 18,768,996 to 23,568,996 tonnes. (Revised Application, (Exhibits JPN-6/IND-20),
p. 15).
310 Final Findings, (Exhibits JPN-11/IND-11), paras. (i)(cc) and 56, pp. 174 and 201.
311 Final Findings, (Exhibits JPN-11/IND-11), paras. 49(d) and 50, pp. 199-200.
312 Japan also argues that the decrease in the market share of the domestic industry might have been
due to the fact that the increase in demand was for products that were not produced by the domestic industry.
(Japan's first written submission, para. 280). We do not view such an enquiry to be necessary in the context of
Article 4.2(a). We consider that the increase in demand for certain products or change in consumer preferences
may be regarded as a non-attribution factor under the second sentence of Article 4.2(b).

it "enhances" the ability of the investigating authorities to make an appropriate determination about
the state of the domestic industry as a whole. 313 The examination of only one part of th e domestic
industry may lead "[to] highlighting the negative data in the poorly performing part, without drawing
attention to the positive data in other parts of the industry".314 The Appellate Body stated that "the
identification, investigation and evaluati on of the relevant factors must be even -handed. Thus,
investigating authorities are not entitled to conduct their investigation in such a way that it becomes
more likely that, as a result of the fact -finding or evaluation process, they will determine that the
domestic industry is injured" .315 We find that these considerations are equally applicable to the
similarly worded provisions concerning injury analysis in the Agreement on Safeguards.
7.191. As we indicated above, the Indian competent authority considered both captive and
non-captive segments in its evaluation of market shares. The facts of the present case do not suggest
that the deterioration of the situation of the domestic industry in the non-captive market happened
due to shift of sales from non-captive to captive markets, as Japan alleged.316
Table 4: Domestic industry's market share
Year Domestic Industry Total Demand Non-Captive Captive Total
2013-2014 10,342,565 (45%) 4,274,000 (19%) 14,616,565 (64%) 22,864,053
2014-2015 9,949,214 (39%) 5,019,741 (20%) 14,968,955 (59%) 25,528,003
2015-2016 (A) 10,359,716 (37%) 5,285,988 (19%) 15,645,704 (56%) 28,157,248
Source: Japan's first written submission, p. 82.
7.192. As indicated in the Final Findings, the domestic industry 's market share in the non -captive
market decreased by eight percentage points during the POI, from 45% to 37% . The data on the
domestic industry's captive sales show that the market share of the domestic industry represented
by the captive segment remained s table over the POI (19%). Notably, the market share of the
domestic industry covering both the captive and the non -captive s egments also decreased by
eight percentage points from 64% to 56%. Even though the share of captive sales increased by one
percentage point in 2014-2015 in comparison to 2013-2014, this change does not fully explain the
decrease of the domestic industry's market share by eight percentage points over the POI and thus
does not distort the findings of the Indian competent authority.
7.193. In light of the foregoing, we conclude that Japan has not demonstrated that the Indian
competent authority failed to properly evaluate and provide reasoned and adequate explanations
regarding the effect of the decline in the domestic industry 's market share on the situation of the
domestic industry.
7.8.3.2.2 Profits and losses
7.194. Article 4.2(a) of the Agreement on Safeguards specifies "profits and losses" among the
relevant factors of an objective and quantifiable nature having a bearing on the situation of the
domestic industry that a competent authority must evaluate in its serious injury analysis. In the
Final Findings, the Indian competent authority found that the profitability of the domestic industry
declined sharply in the first quarter of 2015-2016 and the domestic industry recorded losses.317 The
Indian competent authority considered that "[t]he major reason for decline in profitability of
domestic industry is the increased imports at reduced prices".318 Article 4.2(a) of the Agreement on
Safeguards does not list prices among the mandatory factors that a competent authority must
evaluate in its injury analysis. The list of relevant factors provided in Article 4.2(a), however, is not
exhaustive and a competent authority can and should evaluate any other relevant factors that have
a bearing on the situation of the domestic industry. Japan challenges the Indian competent

313 Appellate Body Report, US – Hot-Rolled Steel, para. 207.
314 Appellate Body Report, US – Hot-Rolled Steel, para. 204.
315 Appellate Body Report, US – Hot-Rolled Steel, para. 196.
317 Final Findings, (Exhibits JPN-11/IND-11), para. 49(f), p. 199.
318 Final Findings, (Exhibits JPN-11/IND-11), para. 56, p. 201.

authority's evaluation of domestic industry "profits and losses" as well as the effect the import prices
had on the domestic industry's prices.
7.195. First, Japan submits that the Indian competent authority failed to provide an adequate
explanation regarding the effect of the decrease in the domestic industry 's prices (from 100 to 83)
on its financial condition, considering that the costs of sales also decreased (f rom 100 to 94) (all
indexed). For Japan, the indication that the domestic prices declined "much more sharply" is not a
sufficient explanation of the effect of this factor on the domestic industry, especially given that it is
based exclusively on indexed da ta.319 Second, Japan submits that the Indian competent authority
failed to consider the data on profitability pertaining to the entire POI, because it focused only on
the recent data. In particular, the Indian competent authority referred to the decrease in profitability
in the first quarter of 2015 -2016 and failed to take into account the increase in profitability in
2013-2014 and 2014 -2015.320 Third, Japan argues that the Indian competent authority failed to
evaluate these two factors with regard to the entire domestic industry, when it excluded information
regarding price trends and profitability in the captive segment of the market.321
7.196. India refers to the Final Findings that the import prices declined sharply from 100 to 78 and
the domestic industry's prices declined from 100 to 83 , while the domestic industry's cost of sales
decreased only from 100 to 94 (all indexed), which led to a decline in profitability for the domestic
industry. India notes that the domestic industry 's prices declined more sharply than the cost of
sales.322 India further submits that profitability declined substa ntially in the first quarter
of 2015-2016, leading to losses. 323 India argues that the domestic industry 's profitability was
analysed over the entire POI, and the fact that the domestic industry was profitable in the preceding
two years of the POI and had losses at the end of the POI indicates that there was a serious injury
to the domestic industry. India adds that the data from the most recent past have special
importance.324 With regard to Japan's argument on the captive market, India replies that the captive
production was considered when evaluating production, demand, inventory, and capacity utilization.
India argues that captive production cannot be considered for sales data and pr ofitability, because
the captive segment does not involve sales transactions.325
7.197. In the Final Findings, the Indian competent authority stated that:
[T]he domestic Industry was always under consistent pressure to either reduce their
prices to match the import prices or to hold on to their prices. The penetration of
increased imports at an unprecedented high level was such that even after reducing the
prices, the domestic industry was not able to keep on to its market share. This has
resulted into losses during 2015-16(Q1) for the domestic industry.326
7.198. The Indian competent authority considered the changes in import prices, and in the domestic
industry's prices, costs, and profitability as follows:

319 Japan's first written submission, paras. 292-296; second written submission, para. 158.
320 Japan's first written submission, para. 302; second written submission, paras. 162-163.
321 Japan's first written submission, paras. 297 and 303; second written submission, paras. 159-160
and 164.
322 India's first written submission, paras. 217-218 and 222 (referring to Final Findings,
(Exhibit IND-11), paras. 49(f) and 49(g), pp. 199-200).
323 India's first written submission, paras. 218 and 222.
324 India's first written submission, para. 223 (referring to the Appellate Body Report, US – Lamb,
para. 138).
325 India's response to Panel question No. 49.
326 Final Findings, (Exhibits JPN-11/IND-11), para. 49(g)(ii)(a), pp. 199-200.

Table 5: Changes in prices and profitability
Components (Indexed) Unit 2013-14 2014-15 2015-16 (Q1)
Cost of Sales INR/MT 100 97 94
Weighted average sales
realization327 INR/MT 100 99 83
Landed price of imports INR/MT 100 95 78
Profit/ (Loss) INR/MT 100 136 (114)
Source: Final Findings, (Exhibits JPN-11/IND-11), para. 49(g)(ii)(a), p. 200.
7.199. Based on the above data, the Indian competent authority noted that:
It is seen from above that while the Index of cost of sales come down from 100 to 94,
the landed price of imports declined sharply from 100 to 78 leading to reduction in sales
realization which declined from 100 to 83. While comparing the sales realization
vis-à-vis cost of sales, it is observed that the sales realization declined much more
sharply than the cost of sales. There was as substantial decline in profitability index
from 136 in 2014-15 to (114) in 2015-16 (Q1).328
7.200. In its examination of the situation of the domestic industry, the Indian competent authority
concluded that "[t]he major reason for decline in profitability o f domestic industry is the increased
imports at reduced prices".329
7.201. Similarly to its arguments regarding the market share analysis, Japan submits that the
Indian competent authority failed to consider the captive segment of the domestic industry in its
evaluation of the domestic industry's prices and profitability.
7.202. As India noted, since the captive market does not involve commercial transactions, there
are no price data available for the captive market. Furthermore, as discussed above, the Indian
competent au thority considered the domestic industry 's sales in both the captive and the
non-captive segments of the market, and found that the domestic industry lost sales to imports in
the non-captive market. Given that the domestic industry competes with imports in the non-captive
market, we consider that it was reasonable to compare import prices with the domestic
industry's prices, and associated profitability, in the non-captive market. Therefore, we do not think
that an additional explanation with regard to pric es and profitability in the captive market was
necessary in light of the facts of this case.
7.203. We also disagree with Japan's argument that the use of indexed data distorted the evaluation
of prices, given that the Indian competent authority's conclusion is based on the analysis of trends
in costs and prices of the domestic industry as well as trends in import prices. India explained that
its competent authority conducted the price analysis on the basis of actual data from the domestic
industry and indexed figures were used in published reports in order to comply with the
confidentiality requirement under Article 3.2 of the Agreement on Safeguards.330
7.204. Nonetheless, a sharp decline in prices occurred only in the first quarter of 2015 -2016, as
compared to the preceding full financial years, where the domestic industry's prices were stable and
declined marginally from 100 to 99 (indexed). These trends warrant a reasoned and adequate
explanation from the Indian competent authority as to why valid conclus ions may be drawn by
comparing the average prices of full financial years to the average prices of a quarter. In particular,
the Indian competent authority should have provided a sufficient explanation of why it could exclude

327 In response to Panel question No. 114, India clarified that "[w]eighted average sales realization"
refers to "the weighted average of the average sales realization of all the applicant companies. The average
sales realization and the quantity of all the applicant companies were multiplied respectively and the combined
total then divided by the total sales quantity to arrive at the weighted average sales realization. The cost of
sale is also weighted similarly".
328 Final Findings, (Exhibits JPN-11/IND-11), para. 49(g)(ii)(b), p. 200.
329 Final Findings, (Exhibits JPN-11/IND-11), para. 56, p. 201.
330 India's first written submission, para. 265.

the fact that the higher rate of price decrease in the first quarter of 2015 -2016 might reflect a
seasonal or temporal downturn in prices in a given quarter of the year.331
7.205. Furthermore, the data on profitability show that the domestic industry remained profitable
during most of the POI and experienced losses only during the last three months, i.e. the first quarter
of 2015-2016. The Indian competent authority relied on the losses suffered by the domestic industry
in the first quarter of 2015 -2016 as one of the main indicators of serious i njury to the domestic
industry. It considered that the decline in market share of the domestic industry and the decline in
import prices led to the financial losses recorded by the domestic industry. In our view, even though
the losses in the first quarter of 2015-2016 refer to the most recent data available over the POI, the
competent authority should have evaluated this information in the context of the entire POI. 332 As
seen from the above table, the domestic industry 's profits increased considerably from 100 to 136
(indexed) in 2014 -2015 compared to base year of 2013 -2014. The losses in the first quarter
2015-2016 refer to three months only, April -June 2015, and were compared with the profitability
rate of full financial years of 2013 -2014 and 2015 -2016. In our view, this analysis warrants an
explanation by the Indian competent authority of why a comparison of three -months data of the
first quarter of 2015-2016 to the full financial years is valid, especially considering the sharp change
between gaining considerable profits during the most of the POI and suffering losses during the last
three months of the POI. In particular, the Indian competent authority should have provided a
reasoned and adequate explanation of why it could exclude the fact that the losses in the first quarter
of 2015-2016 might reflect a seasonal or temporal circumstance.
7.206. We conclude that the Indian competent authority failed to properly evaluate and sufficiently
explain the changes in import prices and their effect on the domestic industry's prices and therefore
on profitability.
7.8.3.2.3 Evaluation of injury factors showing stable or positive trends
7.207. Japan argues that the Indian competent authority failed to explain its finding of serious injury
suffered by the domestic industry, given the positi ve trends in certain injury factors. 333 Japan
submits that most of the injury factors, such as production, sales, capacity utilization, employment,
productivity, and inventories, showed stable or positive trends. Japan contends that the Indian
competent authority should have explained why it determined the existence of serious injury for the
domestic industry, despite the evidence that these factors showed stable or positive trends.334
7.208. India responds that a competent authority is not required to explain in detail how each factor
individually supports the finding of serious injury for the domestic industry or to show a negative
trend in each factor to justify its finding of serious injury .335 India disagrees with Japan that its
competent authority failed to provide an adequate explanation regarding changes in the level of
sales, capacity utilization, employment, productivity , and inventories. According to India, its
competent authority consi dered that, regardless of the increase in demand, the production,
employment, and sales of the domestic industry "have remained stagnant ", which indicates the
existence of serious injury to the domestic industry.336

331 In the context of our examination of Japan's claims under Article 4.2(b), we also conclude that the
Indian competent authority failed to properly examine the price competition between imported and domestic
products, when it based its price comparison on the average unit price of imported products and the average
unit price of the like or directly competitive domestic products (see para. 7.256 below).
332 The Appellate Body in US – Lamb stated that:
The real significance of the short term trends in the most recent data, evident at the end of the
period of investigation, may only emerge when those short -term trends are assessed in the light
of the longer-term trends in the data for the whole period of investigation.
(Appellate Body Report, US – Lamb, para. 138).
333 Japan's first written submission, para. 275.
334 Japan's first written submission, paras. 306-309 (referring to Panel Report, Dominican Republic –
Safeguard Measures, para. 7.313); second written submission, paras. 165-167.
335 India's first written submission, paras. 194-195 (referring to Appellate Body Report, Argentina –
336 India's first written submission, para. 197 (referring to Final Findings, (Exhibit IND-11), para. 56,
p. 201).

7.209. We recall that pursuant to Article 4.2(a) of the Agreement on Safeguards a competent
authority must determine serious injury on the basis of the overall position of the domestic industry,
considering all the relevant factors having a bearing on the situation of that industry.337 A competent
authority should take into account the totality of the trends in injury factors and their interaction.338
If a number of injury trends show a positive trend or an improvement in the situation of the domestic
industry, the competent authority would need to provide a compelling explanation of why and how
the domestic industry is injured despite such positive trends.339 Therefore, we will examine whether,
in its evaluation of positive trends of the domestic industry and their interaction with other trends,
the Indian competent authority provided a reasoned and sufficient explanation in its Final Findings.
7.210. The Indian competent authority evaluated the following factors having a bearing on the
situation of the domestic industry: production, changes in the level of sales, market share, capacity
utilization, employment, productivity, profits and losses, inventories, and price effects. It found that
several factors remained "stagnant" over the POI:
Table 6: Factors analysed by India
Injury Factor 2013-2014 2014-2015 2015-2016(Q1) 2015-2016
(Annualized)
Production (MT) 17,881,187 17,836,937 4,456,795 17,827,180
Production (trend) 100 100 100
Capacity utilization 75.9 75.7 - 75.7
Number of Employees
(Indexed) 100 100 100 100
Productivity (Indexed)
Per employee (MT) 100 100 - 100
Inventories (MT) 636,879 648,290 657,099 -
Inventories (MT)
(Indexed) 100 102 103 -
Source: Final Findings, (Exhibits JPN-11/IND-11), pp. 198-199.
7.211. In addition, as noted above, the Indian competent authority observed that the total sales of
the domestic industry increased over the POI from 14,616,565 tonnes to 15,645,704 tonnes, mainly
due to the increase in captive sales by 1,011,988 tonnes. However, relative to growing consumption,
captive sales remained the same (19% of the market share), and non -captive sales went down
(market share decreased from 45% to 37%). The dom estic industry 's prices declined and the
domestic industry suffered financial losses.
7.212. The Indian competent authority provided an overall assessment of the situation of the
domestic industry, stating:
From the above analysis it is seen that the demand for the [product under consideration]
in India has increased in the injury analysis period. Despite increase in demand, the
production, employment and sales of domestic industry have remained stagnant, while
inventories have somewhat increased. Imports have tak en away most of share of the
increase in demand of the subject goods. In 2014 -15, while demand excluding captive
increased by [1,303,069] MT and imports increased much more by [1,392,470] MT.
This shows the aggressive manner in which imports of the [product under consideration]
are entering the Indian market. The domestic industry had raised its capacities
foreseeing the increasing demand in India. However, the domestic industry is unable to
increase its capacity utilization, production and sales. The profi tability has gone down
drastically and even turned to losses during 2015-16(Q1). The major reason for decline
in profitability of domestic industry is the increased imports at reduced prices. If the
same trend continues, the domestic industry fears that th ey would be forced to shut
down their operations.340

338 Panel Report, US – Wheat Gluten, para. 8.85.
339 Panel Reports, Thailand – H-Beams, para. 7.249; China – Cellulose Pulp, para. 7.129 (in the context
of a similar provision in the Anti-Dumping Agreement).
340 Final Findings, (Exhibits JPN-11/IND-11), para. 56, p. 201.

7.213. We disagree with Japan that India failed to provide any explanation regarding the positive
trends in certain injury factors. The fact that several factors showed some amelioration or did not
show a deteriorating trend at all does not necessarily imply an improvement in the performance of
the domestic industry. The Indian competent authority explained that, despite the increase in
demand, many factors remained "stagnant" during the POI . The Indian competent authority found
that the demand for the product concerned had increased from 22,864,053 tonnes to
28,157,248 tonnes (a 23% increase) over the POI. The domestic industry increased its production
capacity anticipating the market expansion341, but was not able to increase its production,
non-captive sales, and capacity utilization. In our view, it is not unreasonable for a competent
authority to consider that "stagnant" trends in several injury factors in light of a considerable
increase in demand, may constitute negative trends in the overall situation of the domestic industry.
In the present case, the Indian competent authority noted that the domestic industry increased its
production capacity and had available capacity to meet the growing demand, but its perfo rmance
did not improve in step with the increasing demand.
7.214. We conclude that Japan has not demonstrated that India failed to explain its finding of
serious injury suffered by the domestic industry, given the positive trends in certain injury factors.
7.8.3.2.4 Conclusion
7.215. We note that the Indian competent authority based its conclusion on the situation of the
domestic industry largely on the fact that the domestic industry's market share and prices decreased
leading to financial losses. We have found above that the Indian competent authority failed to
properly evaluate the domestic industry 's prices and profitability and to provide a reasoned and
adequate explanation of these factors in light of its overall conclusion on the situation of the domestic
industry. For th ese reasons, we find that Japan has demonstrated that India acted inconsistently
with Articles 4.1(a) and 4.2(a) of the Agreement on Safeguards in its assessment of the situation of
the domestic industry.
7.8.3.3 Whether the Indian competent authority failed to ba se its serious injury
determination on objective data
7.216. Japan contends that India acted inconsistently with Article 4.2(a) of the Agreement on
Safeguards by failing to base its determination of serious injury on objective data. Japan submits
that the Indian competent authority based its analysis of the injury factors in 2015-2016 on the data
pertaining to the first quarter of 2015-2016. Japan argues that the Indian competent authority failed
to explain its assumption that the data for the first quarter of 20 15-2016 are representative of the
entire year and thus could be annualized .342 India denies Japan's claim that the serious injury
analysis was not based on objective data. India submits that the data for the first quarter of
2015-2016 have been annualized to make a proper comparison with the data for previous years.343
7.217. We recall that the POI in the underlying investigation covered three financial years
(i) 2013-2014, (ii) 2014-2015, and (iii) 2015-2016 (annualized). Before the Panel, India asserts that
the POI was, in fact, from 1 April 2013 to 30 June 2015, coverin g two financial years and
three months.344 India asserts that the first quarter of 2015-2016 was only annualized to make the
data of this period comparable to the full year data of the preceding periods.345 The Indian competent
authority used annualized data for the last financial year of POI, when it evaluated most of the injury
factors, namely production, changes in the level of sales, market share, capacity utilization,
employment, and productivity. 346 These factors are listed in Article 4.2(a) of the Agreement on
Safeguards among the relevant factors "of objective and quantifiable nature" having a bearing on

341 According to the domestic industry's application, in 2011-2013, the domestic industry increased its
production capacity from 18,768,996 to 23,568,996 tonnes. (Revised Application, (Exhibits JPN-6/IND-20),
p. 15).
342 Japan's first written submission, paras. 310-315; second written submission, paras. 171-173.
343 India's first written submission, paras. 228-230.
344 India's response to Panel question No. 29.
345 India's first written submission, para. 230; responses to Panel question Nos. 29 and 31.
346 Final Findings, (Exhibits JPN-11/IND-11), para. 49, pp. 199-200.

the situation of the domestic industry that a competent authority must evaluate in its serious injury
analysis.
7.218. We recall that the phrase "factors of objective and quantifiable nature" in Article 4.2(a)
implies that the injury factors must be evaluated based on objective data and evidence.347 We have
found above that the Indian competent authority failed to evaluate the rate and amount of increase
in imports on the basis of objective data, when it based its analysis of the increase in imports at
least partly on annualized data.348 We reach the same conclusion with regard to use of the annualized
data in the Indian competent authority's serious injury analysis. Since data were annualized in order
to make them comparable with those of previous years, this required a compelling explanation from
the Indian competent authority as to why such methodology was re liable and why the figures
corresponding to the first quarter of 2015 -2016 could be extrapolated for the entire financial year.
The Preliminary and Final Findings do not contain any explanation in this respect.
7.219. Therefore, we find that India acted inconsist ently with Article 4.2(a) of the Agreement on
Safeguards, when it based its analysis of injury factors at least partly on annualized data.349
7.8.4 Threat of serious injury
7.220. Article 2.1 of the Agreement on Safeguards provides that a Member can apply safeguard
measures when the product concerned " is being imported into its territory in such increased
quantities, absolute or relative to domestic production, and under such conditions as to cause or
threaten to cause serious injury to the domestic industry that produces like or directly competitive
products".350 Article 4.1(a) defines the term "serious injury" as "a significant overall impairment in
the position of a domestic industry". Article 4.1(b) defines the term "threat of serious injury" as
follows:
"[T]hreat of serious injury" shall be understood to mean serious injury that is clearly
imminent, in accordance with the provisions of paragraph 2. A determination of the
existence of a threat of serious injury shall be based on facts and not merely on
allegation, conjecture or remote possibility[.]
7.221. Japan argues that the Indian competent authority does not appear to have made findings
on a threat of serious injury, however to the extent it did, Japan submits that such determination of
threat of serious injury is inconsistent with Articles 4.1(b) and 4 .2(a) of the Agreement on
Safeguards.351 Japan submits that the alleged determination of "further threat of greater serious
injury" lacks any legal basis under the Agreement on Safeguards and is, in any case, irrelevant. 352
India asserts that its competent authority made a finding of both serious injury and threat of serious
injury.353
7.222. The question of simultaneous determinations of serious injury and threat of serious injury
was discussed by the Appellate Body in US – Line Pipe. The Appellate Body stated that the phrase
"cause or threaten to cause serious injury" in Article 2.1 covers a finding of serious injury, threat of

347 See para. 7.137 above. In US – Lamb, the Appellate Body noted that:
We recognize that the clause "of an objective and quantifiable nature" refers expressly to "factors",
but not expressly to data. We are, however, convinced that factors can only be "of an objective
and quantifiable nature" if they allow a determination to be made, as required by Article 4.2(b) of
the Agreement on Safeguards, on the basis of "objective evidence". Such evidence is, in principle,
objective data. The words "factors of an objective and quantifiable nature" imply, therefore, an
evaluation of objective data which enables the measurement and quantification of these factors.
(Appellate Body Report, US – Lamb, para. 130. (emphasis original)).
348 See para. 7.145 above.
349 We also note Japan's argument that the Indian competent authority failed to base its decision on
objective data, because the figures for inventories, production, and sales for any given year of the POI do not
match. India responds that these figures were duly verified from the records of the domestic industry and are
correct. Since we have already found that India acted inconsistently with Article 4.2(a), by failing to base its
injury analysis on objective data, we do not need to address this argument.
350 Emphasis added.
351 Japan's first written submission, paras. 325-331; second written submission, paras. 181-183.
352 Japan's first written submission, para. 324; second written submission, paras. 177-180.
353 India's response to Panel question No. 47.

serious injury, or both in combination. 354 The Appellate Body clarified that "serious injury" is often
"the realization of a threat of serious injury" and it may be difficult to discern the precise point where
a "threat of serious injury" becomes "serious injury":
[T]here is a continuous progression of injurious effects eventually rising and culminating
in what can be determined to be "serious injury". Serious injury does not generally occur
suddenly. Present serious injury is often preceded in time by an injury that threatens
clearly and imminently to become serious injury, as we indicated in US – Lamb. Serious
injury is, in other words, often the realization of a threat of serious injury. Although, in
each case, the investigating authority will come to the conclusion that follows from the
investigation carried out in compliance with Article 3 of the Agreement on Safeguards,
the precise point where a "threat of serious injury" becomes "serious injury" may
sometimes be difficult to discern. But, clearly, "serious injury" is something beyond a
"threat of serious injury".355
7.223. In other words, a threat of serious injury means a significant overall impairment in the
position of a domestic industry, which has not yet materialized, but it is "clearly imminent".356 The
threat of serious injury emerges before and precedes a serious injury. The use of the word
"imminent" means that "the anticipated 'serious injury' must be on the very verge of occurring".357
Article 4.1(b) specifies that a threat of serious injury must be based on "facts and not merely on
allegation, conjecture or remote possibility". Accordingly, a finding of threat of serious injury
"whether instead of or in addition to a finding of present serious injury, must be explicitly examined
in an investigation" and "supported by specific evidence and adequate analysis".358
7.224. Turning to the facts of this dispute, in the last section of its Final Findings titled
"Recommendations", the Indian competent authority concluded that the increased imports of the
product concerned into India "have caused serious injury or are threatening to cause serious injuries"
to the domestic industry and that it would be in the public interest to impose safeguard duties on
imports of the product concerned into India for a period of two years and six months.359
7.225. Earlier, in the section titled "Determination of Serious Injury and Threat of Serious Injury",
the Indian competent authority noted that the determination of "serious injury or threat of serious
injury" must include evaluation of all relevant factors having a bearing on the situation of the
domestic industry.360 After considering all relevant factors, the Indian competent a uthority found
that there was a "significant overall impairment" in the situation of the domestic industry, and that
the domestic industry "suffered serious injury as a result of the increased imports of the [product
concerned]". The Indian competent authority further considered that, due to the surplus production
capacities available to foreign producers, the imports would continue to increase. Considering the
likelihood of a further increase in imports, it concluded that there was "a threat of further serious
injury to the domestic market".361 The Final Findings provide as follows:
[A]n evaluation of the overall position of the DI, in light of all the relevant factors having
a bearing on the situation of the DI, shows a 'significant overall impairment'. It is thus
concluded that Domestic Industry has suffered serious injury as a result of increased
imports of the [product under consideration].
There is a serious injury to the domestic industry due to the surge of imports and the
most recent trend of import volumes entering India. The volume of imports continues
to increase, despite already being at high levels. The market share of imports has al so
substantially increased over the period. Considering the surplus production capacities
available with the foreign producers, the imports will continue to increase, as is evident
from the post POI analysis at Para -100 resulting in further injury to the d omestic

354 Appellate Body Report, US – Line Pipe, para. 171.
355 Appellate Body Report, US – Line Pipe, para. 168. (emphasis original; fn omitted)
356 Panel Report, Ukraine – Passenger Cars, para. 7.224.
357 Appellate Body Report, US – Lamb, para. 125.
358 Panel Report, Argentina – Footwear (EC), paras. 8.283-8.285.
359 Final Findings, (Exhibits JPN-11/IND-11), section R(a), p. 208.
360 Final Findings, (Exhibits JPN-11/IND-11), paras. 48-49, p. 198.
361 Final Findings, (Exhibits JPN-11/IND-11), para. 59, p. 201.

industry. The likelihood of further increased import leads to a conclusion that there is a
threat of further serious injury to the domestic market . In view of the fact, that the
domestic industry is unable to make profitable sales in the Indian mar ket, I am of the
view that in absence of levy of safeguard duty, the Domestic Industry faces serious
injury and a further threat of greater serious injury.362
7.226. Therefore, the Indian competent authority concluded that the domestic industry suffered
"serious injury" and there was "a further threat of greater serious injury". In other words, it found
the existence of serious injury to the domestic industry and that there was a risk of a further
deterioration of the situation of this industry. The Indian competent authority did not make any
finding that the serious injury had not yet materialized. On the contrary, the Final Findings clearly
state that there was a "significant overall impairment" in the situation of the domestic industry and
that the latter suffered serious injury.
7.227. In response to a question from the Panel on where a finding of threat of serious injury could
be found in the Final Findings, India referred to its analysis of the relevant injury factors provided
for in Article 4.2(a).363 It is true that wh en making a determination of serious injury or threat of
serious injury, a competent authority must evaluate all relevant factors identified in Article 4.2(a).
However, when making a determination of threat of serious injury, such evaluation must involve "a
fact-based assessment of likely developments in the very near future with respect to all the relevant
factors".364 The Indian competent authority 's evaluation of the relevant injury factors does not
include any evidence or assessment of their likely develo pments in the near future. As discussed
above, following the evaluation of all relevant injury factors, the Indian competent authority explicitly
concluded that the domestic industry suffered serious injury.
7.228. India also submits that the finding of threat o f serious injury is reflected in the evaluation
of post POI data.365 The Indian competent authority evaluated changes in some injury factors in the
period between the first and the second quarters of 2015-2016 in order to "draw a clear inference
about the possibility of accentuation of the injury to the domestic industry".366 This analysis showed
that in the second quarter of 2015 -2016 the volume of i mports increased by 30% and the market
share of imports grew by 2 percentage points. In the same period, the domestic industry increased
its sales by only 1%, while its market share and production declined by 2 percentage points and 6%
respectively. The domestic industry increased its inventories and suffered financial losses. 367 The
Indian competent authority reiterated that "the domestic industry has suffered serious injury" and
that the analysis of post POI data showed that " the position of domestic industry further
deteriorated".368
7.229. In our view, the examination of post POI data has been provided by the Indian competent
authority in support of its conclusion of the current serious injury and further deterioration of the
situation of the domestic industry, and does not constitute a stand-alone analysis of threat of serious
injury within the meaning of Article 4.1(b).
7.230. In light of the foregoing, we consider that the Indian competent authority's findings refer to
the existence of serious injury. On their face, the Final Findings do not show that the Indian
competent authority conducted an analysis of the "threat of s erious injury" within the meaning of
Article 4.1(b), i.e. a "serious injury that is clearly imminent". Rather, the Indian competent authority
found that the domestic industry suffered serious injury and that there was a threat that the serious
injury would continue to exist in the future and that the situation of the domestic industry might
deteriorate to a greater extent due to the surplus production capacities available to foreign producers
and the likelihood of a further increase in imports. The Indian competent authority's reference to a
"threat of serious injury" in its conclusions and recommendations is not supported by any analysis
or evidence in the Final Findings. Therefore, we find that the Indian competent authority's conclusion
that the increased imports of the product concerned are threatening to cause serious injury to the

362 Final Findings, (Exhibits JPN-11/IND-11), paras. 58-59, p. 201. (emphasis added)
363 India's response to Panel question No. 47.
364 Panel Report, Ukraine – Passenger Cars, para. 7.234.
365 India's response to Panel question No. 47.
366 Final Findings, (Exhibits JPN-11/IND-11), para. 100, p. 207.
367 Final Findings, (Exhibits JPN-11/IND-11), para. 101, p. 208. We also note that the analysis of the
post POI data does not include evaluation of all relevant factors listed in Article 4.2(a).
368 Final Findings, (Exhibits JPN-11/IND-11), paras. 102(ii) and (vi), p. 208.

domestic industry is inconsistent with Articles 4.1(b) and 4.2(a), because the existence of a threat
of serious injury was not adequately addressed or analysed in the Final Findings.
7.8.5 Consequential claim under Article 2.1 of the Agreement on Safeguards and
Article XIX:1(a) of the GATT 1994
7.231. We have found above that India acted inconsistently with Articles 4.1(a) and (b), and 4.2(a)
of the Agreement on Safeguards. In the preceding sections of this Report, we have also found that
India acted inconsistently with Article 2.1 of the Agreement on Safeguards and Article XIX:1(a) of
the GATT 1994. In light of this, we see no need to address Japan 's consequential claims that India
acted inconsistently with Article 2.1 of the Agreement on Safeguards and Article XIX:1(a) of the
GATT 1994 with regard to its assessment of the situation of the domestic industry . We therefore
exercise judicial economy and decline to make findings on these claims.
7.9 Whether India acte d inconsistently with Articles 2.1, 4.2(a) and 4.2(b) of the
Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 with respect to its
determination of the causal link between the increase in imports and serious injury
7.9.1 Introduction
7.232. Japan claims that India acted inconsistently with Article 4.2(b) of the Agreement on
Safeguards by failing to determine the existence of a causal link between the increased imports and
the serious injury and to ensure that the injury caused by other factors was not attributed to the
injury caused by the increased imports. As a consequence, Japan also claims that India acted
inconsistently with Articles 2.1 and 4.2(a) of the Agreement on Safeguards and Article XIX:1(a) of
the GATT 1994.369 Having concluded that the Indian competent authority's findings on the increased
imports and th e existence of serious injury are inconsistent with Articles 2.1, 4.1( a), 4.1(b),
and 4.2(a) of the Agreement on Safeguards, it woul d normally not be necessary to address
Japan's claims whether the Indian competent authority demonstrated the existence of the causal
link between the increased imports and serious injury.370 Nevertheless, in light of the circumstances
of the present case an d with a view to assisting the parties to arrive at a positive solution to the
dispute, we will consider Japan's claims on the causal link and non-attribution analyses.
7.9.2 Article 4.2(b) of the Agreement on Safeguards
7.233. Article 4.2(b) of the Agreement on Safeguards reads as follows:
The determination referred to in subparagraph (a) [that increased imports have caused
or are threatening to cause serious injury to a domestic industry] shall not be made
unless this investigation demonstrates, on the basis of objective evidence, the existence
of the causal link between increased imports of the product concerned and serious injury
or threat thereof. When factors other than increased imports are causing injury to the
domestic industry at the same time, such inju ry shall not be attributed to increased
imports.
7.234. Article 4.2(b) of the Agreement on Safeguards provides two distinct legal requirements.
First, a competent authority should demonstrate that there is a causal link between the increased
imports and the serious injury to the domestic industry (causation requirement). Second, the serious
injury caused by factors other than the increased imports must not be attributed to the increased
imports (non-attribution requirement).371
7.235. The Agreement on Safeguards does not p rovide any specific methodology as to how the
existence of a causal link has to be determined. The Panel will have to consider whether the Indian
competent authority provided a reasoned and adequate explanation of its finding that there is a
causal link between the increased imports and the serious injury suffered by the domestic industry.
Previous panels in assessing whether a Member has fulfilled the causation requirement considered,

369 Japan's first written submission, paras. 334-335; second written submission, para. 187.
370 Appellate Body Report, Argentina – Footwear (EC), para. 145; Panel Reports, Argentina – Preserved
Peaches, para. 7.135; Dominican Republic – Safeguard Measures, paras. 7.327-7.329.
371 Appellate Body Report, US – Line Pipe, para. 208.

among other factors (i) whether an upward trend in imports coincides with downward trends in the
injury factors, and if not, whether an adequate, reasoned, and reasonable explanation was provided
as to why nevertheless the data show causation ; and (ii) whether the conditions of competition
between the imported and domestic products as analysed demonstrate the existence of a causal link
between the imports and any serious injury.372
7.236. Upward movements in imports should normally occur at the same time as downward
movements in injury factors in order for coincidence to exist.373 A coincidence in trends by itself
cannot prove causation. However, an absence of coincidence would create "serious doubts as to the
existence of a causal link, and would require a very compelling analysis of why causation still is
present".374 Apart from the c oincidence analysis, the competent authority may also use other
analytical tools to determine the existence of a causal link, for instance, an analysis of the conditions
of competition between imported and domestic products. 375 The relevance of the condition s of
competition is confirmed by the text of Article 2.1 of the Agreement on Safeguards, which refers to
the increased imports occurring "under such conditions" as to cause or threaten to cause serious
injury to the domestic industry.376
7.237. The second sentence of Article 4.2(b) requires that a competent authority examine factors
other than increased imports which are causing injury to the domestic industry simultaneously with
the increased imports, and ensure that the injury caused by such other factors not be a ttributed to
the increased imports. The Appellate Body clarified that in order to comply with this requirement a
competent authority must "make an appropriate assessment" of the injury caused to the dome stic
industry by the other factors and provide a "satisfactory explanation of the nature and extent of the
injurious effects of the other factors".377 Once a competent authority determines that there are other
factors causing injury to the domestic industry, it " must separate and distinguish " the injurious
effects of the increased imports from the injurious effects of other factors, and "establish explicitly,
through a reasoned and adequate explanation , that injury caused by factors other than increased
imports is not attributed to increased imports".378
7.238. In order to demonstrate that increased imports are causing serious injury, a competent
authority must find a "sufficiently clear contribution" by those imports and explain its determination
in that regard. The Appellate Body has stated, however, that the increased imports do not need to
be the sole cause of injury, and that the causal link between increased imports and serious injury
may exist even though other factors are also contributing at the same time to the situation of the
domestic industry.379 In addition, w hen a competent authority considers that there are no other
factors causing injury to the domestic industry, this must be clearly indicated and explained in its
determination.380

372 Panel Reports, Argentina – Footwear (EC), para. 8.229 (confirmed in Appellate Body Report,
373 Panel Reports, US – Steel Safeguards, para. 10.299. That panel also recognized that in some cases a
lag may exist between the influx of imports and the manifestation of the effects of injury suffered by the
domestic industry. (Ibid.).
374 Panel Report, Argentina – Footwear (EC), para. 8.238 (emphasis original). See also Appellate Body
375 Panel Reports, US – Steel Safeguards, paras. 10.314-10.316.
376 Appellate Body Report, US – Wheat Gluten, paras. 76-78.
377 Appellate Body Reports, US – Hot-Rolled Steel, para. 226; US – Line Pipe, para. 215.
378 Appellate Body Reports, US – Line Pipe, paras. 215 and 217; US – Lamb, paras. 179-180; US –
379 The Appellate Body in US – Wheat Gluten stated:
Although that contribution must be sufficiently clear as to establish the existence of "the causal
link" required, the language in the first sentence of Article 4.2(b) does not suggest that increased
imports be the sole cause of the serious injury, or that " other factors" causing injury must be
excluded from the determination of serious injury. To the contrary, the language of Article 4.2(b),
as a whole, suggests that "the causal link" between increased imports and serious injury may exist,
even though other factors are also contributing, "at the same time", to the situation of the domestic
industry.
(Appellate Body Report, US – Wheat Gluten, para. 67 (emphasis original); see also Panel Report, China –
Cellulose Pulp, paras. 7.26-7.27).
380 Panel Report, Ukraine – Passenger Cars, para. 7.334.

7.9.3 Causal link analysis
7.239. Japan contends that India acted inconsistently with the fi rst sentence of Article 4.2(b) by
failing to determine the existence of a causal link between the increased imports and the serious
injury and threat thereof to the domestic industry.
7.240. First, Japan submits that in the present case movements in imports and movements in injury
factors did not coincide in time and were not directly correlated .381 Japan argues that in its causal
link analysis the Indian competent authority compared import trends with changes in only two injury
factors, namely market share and domestic prices, and failed to take into account all injury factors
in order to demonstrate the "overall coincidence".382 Japan submits that most of the injury factors
remained stable or even improved during the POI (i.e. production, sales, capacity utilization,
employment, productivity , and inventories). 383 Japan further submits that while the imports
increased continuously over the POI, the profitability also increased and turned into losses only in
the first quarter of 2015-2016. Similarly, the domestic prices remained stable over most of the POI
and decreased only in the first quarter of 2015-2016. Japan adds that the Indian competent authority
examined the relationship between movements in imports and injury factors by comparing the data
at the beginning and at the end of the POI, without considering intermediate import trends and
corresponding changes in injury factors over the POI.384
7.241. Second, Japan argues that if there is no overall coincidence between trends in imports and
injury factors, a competent authority should provide a compelling explanation as to why the causal
link exists. 385 Japan submits that the Indian competent authority failed to explain why factors
mentioned in the Final Findings showed that the increased imports of the product concerned caused
serious injury to the domestic industry. In particular, Japan takes issue with the conclusion that
imports (i) prevented the domestic industry from sustaining its prices ; (ii) prevented the domestic
industry from increasing its production and sales to meet th e increased demand; and (iii) led to a
sharp decline in profitability and to the losses suffered by the domestic industry. 386 With respect to
price analysis, Japan argues that the Indian competent authority's price analysis is distorted, since
it is based on a simple comparison between a unit average price of imported products and a unit
average price of domestic products, without addressing differences in categories and prices between
various products.387 Japan also argues that the Indian competent authority based its analysis on an
end-to-end comparison of prices and failed to consider intermediate trends. 388 With respect to
domestic production and sales, Japan submits that the Indian competent authority failed to explain
its assumption that, in the absence of the increased imports, the domestic industry should have
been able to increase its production and sales in proportion to the increase in demand. 389 With
respect to profitability, Japan argues that an end-to-end point comparison between profitability and
import volumes and prices cannot show the existence of a causal link. Japan submits that between
2013-2014 and 2014-2015 the domestic industry was able to increase profitability and maintain its
sales and prices , while the volume of imports increased and the i mport prices decreased. 390
According to Japan, the Indian competent authority failed to take into account other factors that
might have had an impact on the domestic industry's prices, profitability, and ability to increase its
production and sales.391

383 Japan's first written submission, paras. 355-356; second written submission, paras. 194-195.
385 Japan's first written submission, paras. 345 and 357; second written submission, para. 197.
386 Japan's first written submission, paras. 357-359; second written submission, paras. 197-198.
387 Japan's first written submission, paras. 360-362; second written submission, para. 201.
388 Japan's first written submission, para. 363; second written submission, para. 202. Japan also argues
that the Indian competent authority's price analysis did not allow drawing any meaningful conclusion because it
was based on indexed data. (Japan's first written submission, para. 365; second written submission,
paras. 203-204). We have rejected the same argument of Japan in para. 7.203 above in the context of
Japan's claim under Articles 4.1(a) and 4.2(a). The same reasoning with regard to this argument stands in the
context of Japan's claim under Article 4.2(b) and we see no reason to address this argument again.
389 Japan's first written submission, paras. 368-369; second written submission, paras. 205-206.
390 Japan's first written submission, paras. 371-375; second written submission, paras. 208-209.
391 E.g. decline in the prices of raw materials (coal and iron ore), the increase of sales by the Indian
producers outside the domestic industry, insufficient domestic production capacity, the domestic

7.242. India responds that its authority has established the existence of a causal link between the
increase in imports and serious injury consistently with Article 4.2(b). India submits that an "overall"
coincidence in movements in imports and injury factors is what matters in a causal link analysis. In
India's view, a slight absence of coincidence in the changes of individual injury factors in relation to
import trends does not preclude a finding of a causal link between increased imports and serious
injury.392 India submits that its authority recorded a coincidence of the increase in imports and
changes in injury factors. In particular, when the imports increased, the domestic industry's market
share and profitability declined. India underlines that the volume of import s in absolute terms
increased almost three times while the domestic industry lost its market share (from 45% to 37%),
the domestic prices declined, and the domestic industry suffered losses.393 India also argues that a
competent authority is required to establish a relationship between movements in imports and those
factors which are indicative of injury. India disagrees with Japan that a causation analysis with regard
to all injury factors is required.394
7.243. India submits that the domestic industry 's price declined from 100 to 83 and the import
prices also declined from 100 to 78 (indexed). India argues that import and domestic prices moved
in tandem throughout the POI, which demonstrates that the domestic indu stry could not have
increased its prices in the presence of the increased imports. 395 Regarding Japan's argument that
the Indian competent authority failed to take into account different categories and prices of various
products, India submits that the Agree ment on Safeguards provides for a comparison of like or
directly competitive products and Japan does not claim that the products subject to the safeguard
measure are not "like or directly competitive" in terms of Article 2.1 of the Agreement on
Safeguards.396 India clarifies that profitability had increased at the beginning of the POI due to a
slight decrease in the costs (100 to 97 in 2014-2015), while the prices remained on the same level
(100 to 99). This resulted in higher per unit profitability, but also in a loss of market share to the
increased imports.397
7.244. In the present case, the Indian competent authority noted that the following factors indicated
that the increased imports caused serious injury to the domestic industry:
a. the volume of imports increased significantly from 100 points (1,252,441 tonnes ) to
281 points (3,524,932 tonnes);
b. the market share of imports increased from 5% to 13%, while the market share of the
domestic industry declined from 45% to 37%;
c. the decreasing import prices prevented the domestic industry from sustaining its prices;
d. due to the low prices of the increased imports, the domestic industry was unable to
increase its production and sales as compared to the rate of increase in demand of the
product concerned in India; and
e. the profitability of the domestic industry declined sharply during 2015-2016 (Q1) and the
domestic industry recorded losses due to the increased imports.398
7.245. In the Final Findings, the Indian competent authority found that:
[T]here is a direct correlation between the increase in imports and serious injury
suffered by the domestic industry as import in absolute term increased approximately
three times during the year 2015-16 ([a]nnualised on the basis of Q1) as compared to
base year 2013 -14 and domestic industry is losi ng market share which has declined
from 45% to 37%. The landed price of imports per ton has declined sharply.

industry's decision to increase captive transactions, and the increase in the demand for products that were not
produced by the domestic industry. (Japan's first written submission, paras. 366, 369, and 375).
392 India's first written submission, paras. 254-256 (quoting Panel Report, US – Wheat Gluten,
para. 8.101).
393 India's first written submission, paras. 252 and 259 (referring to Final Findings, (Exhibit IND-11),
394 India's first written submission, para. 261.
395 India's first written submission, para. 262.
396 India's first written submission, para. 263.
397 India's first written submission, paras. 272-273.
398 Final Findings, (Exhibits JPN-11/IND-11), para. 65, p. 202.

Consequently, the domestic industry has suffered losses. It is, thus, evident that injury
to the domestic industry has been caused by the increased imports.399
7.246. The Indian competent authority concluded that there was "a direct correlation" between the
import surge and the serious injury, given that the imports increased and the domestic
industry's market share and prices declined, which led to the loss es suffered by the domestic
industry.
7.247. First, as discussed above, the Final Findings show that the volume of imports considerably
increased and the domestic industry's market share declined over the POI. Japan does not dispute
the fact that there was a coi ncidence between the increase in imports and the decrease in the
domestic industry's market share.400 However, while the volume of imports was increasing during
the entire POI, the domestic industry's prices remained stable during most of the POI and decreased
only in the first quarter of 2015 -2016. The domestic industry 's profits grew significantly from 100
to 136 (indexed) in 2014 -2015 compared to 2013 -2014, while th e imports increased from 100
to 211 (indexed) at the same time. The domestic industry experienced losses only in the first quarter
of 2015-2016, while imports continued to increase, but at a lower rate. We recall that other injury
factors did not show any significant change over that POI and remained stable, while the import s
were increasing during the entire POI. Furthermore, there was no correlation between the decrease
of the domestic industry 's market share and the domestic industry 's prices, although both were
declining, but at considerably different levels, and with profits, because when the market shares and
prices were declining, the domestic industry 's profits grew significantly from 100 to 136. These
findings of the Indian competent authority show that there was no overall coincidence in trends
between movements in imports and movements in injury factors.
7.248. An overall coincidence in trends does not require an exact correlation since in some cases a
lag may exist between the influx of imports and the manifestation of the effects of injury suf fered
by the domestic industry. 401 However, in such cases the competent authority should provide
sufficient explanations to justify how an overall coincidence in movements has been found. We
therefore conclude that the Indian competent authority failed to provide a sufficient explanation o f
why a causal link exists despite the lack of overall coincidence in trends between movements in
imports and movements in injury factors.
7.249. Second, we recall that according to Article 4.2(b) of the Agreement on Safeguards, the
determination regarding the existence of the causal link between the increased imports and serious
injury shall be made "on the basis of objective evidence". The trends in imports and injury factors
were examined during the POI, which includes two financial years, 2013-2014 and 2014-2015, and
the first quarter of 2015-2016. For the purpose of examining the volume of imports and most of the
injury factors, the Indian competent authority annualized the data for the first quarter of 2015-2016
to compare them to the full previous financial years.
7.250. As we have found in the preceding sections of this Report, the Indian competent authority
failed to explain why such methodology was reliable and why the figures correspondi ng to the
first quarter of 2015-2016 could be extrapolated for the entire financial year. For the same reasons,
we conclude that the examination of a correlation between movements in imports and movements
in injury factors was not based on objective evidence, since such examination was based at least
partly on annualized data . In our view, the POI of two years and three months did not allow the
Indian competent authority to examine a coincidence in trends, because in effect it provides only
two points of comparison between movements in imports and movements in injury trends in
2013-2014 and in 2014-2015. With respect to the third point of comparison, 2015-2016, the Indian
competent authority did not have objective evidence for the full financial year.
7.251. In addition, certain injury factors, including prices and profitability, were ex amined by
comparing the data for the full two financial years to the first quarter of 2015 -2016. As we have
found above, the Indian competent authority failed to explain why valid conclusions may be drawn
by comparing the average prices of full financial years to the average prices of a quarter.

399 Final Findings, (Exhibits JPN-11/IND-11), para. 66, p. 202.
400 Japan's second written submission, para. 195.
401 Panel Reports, US – Steel Safeguards, para. 10.299.

7.252. Accordingly, we consider that the Indian competent authority failed to base its analysis of
trends in imports and trends in injury factors on objective evidence, when it relied at least partly on
annualized data and compared data for full financial years to data for a quarter.
7.253. Third, i n its causation analysis, the Indian competent authority considered the price
competition between imported and domestic products. In particular, the Indian competent authority
stated that "[t]he decreasing import prices are preventing the Domestic Industry from sustaining its
prices" and "[d]ue to increased imports on low prices, the Domestic Industry is unable to increase
its production and sales as compared to the rate of increase in d emand/consumption of produ ct
under consideration in India".402
7.254. The Indian competent authority compared price trends based on the average unit price of
imported products and the average unit price of the like or directly competitive domestic products.
During the investigation, several interested parties argued that the imported product included a
heterogeneous group of products. Specifically, some of the importers of the subject goods in India
(Maruti Suzuki India Limited) argued that the product concerned inc luded a "heterogeneous set of
products imported and thus they cannot be included in the same grade for comparison with the
products manufactured by the domestic producers/petitioners".403 Several producers and exporters
added that "[i ]n the present investigation, the products classified under subheading 7225 are
materially different from the articles classified under subheading 7208. Therefore, the products
under the two headings which are not identical and which are plural or heteroge neous in nature
cannot be put together in one basket to determine a single [product under conside ration]".404 In
response to a question from the Panel on whether and how the Indian competent authority addressed
these arguments , India refer red to the section of the Final Findings titled "Product under
consideration".405 In this section the Indian competent authority considered the interested
parties' arguments on whether certain products should be excluded from the scope of the
investigation. However, this section does not discuss whether all products included into the scope of
the investigation are alike and compete with each other.406
7.255. India argues that once products are included into the scope of a safeguard investigation, no
further categorization is required, because the Agreement on Safeguards does not provide for the
collection of detailed price information as it does not envisage any detailed price analysis.407 Although
it is correct that the Agreement on Safeguards does not require a separate analysis of the prices of
imports and domestic products, it also does not exclude such an analysis. In the present case , the
Indian competent authority based its causation analysis fundamentally on price considerations. In
the context of a safeguard investigation, if a competent authority supports its injury determination
by relying on price trends of imported and domestic products, it should ensure that the products on
both sides are sufficiently similar and that any price difference can reflect the conditions of
competition between imported and domestic products, rather than differences in the composition of
the two baskets of products being compared.408 This approach is consistent with the statement of

402 Final Findings, (Exhibits JPN-11/IND-11), para. 65, p. 202.
403 See the arguments by Maruti Suzuki India Limited in Final Findings, (Exhibits JPN-11/IND-11),
section B, XXXV(i), p. 146.
404 See the arguments by China Iron and Steel Association and several other producers and exporters in
Final Findings, (Exhibits JPN-11/IND-11), section C, X(b), p. 154. See also the arguments by POSCO in Final
Findings, (Exhibits JPN-11/IND-11), section D, XIV(j), p. 187.
405 India's response to Panel question No. 57.
406 Final Findings, (Exhibits JPN-11/IND-11), paras. 18-23, pp. 192-194.
407 India's responses to Panel question Nos. 58 and 114.
408 In the context of the anti-dumping investigation, the panel in China – Broiler Products stated:
Where the products under investigation are not homogenous, and where various models command
significantly different prices, the investigating authority must ensure that the product compared
on both sides of the comparison are suf ficiently similar such that the resulting price difference is
informative of the "price undercutting", if any, by the imported products. … In a situation in which
it performs a price comparison on the basis of a "basket" of products or sales transactions, the
authority must ensure that the groups of products or transactions compared on both sides of the
equation are sufficiently similar so that any price differential can reasonably be said to result from
"price undercutting" and not merely from differences in the composition of the two baskets being
compared.
(Panel Report, China – Broiler Products, para. 7.483).
In addition, in China – X-Ray Equipment, the panel noted:

the panel in Argentina – Footwear (EC) regarding the determination of like or directly competitive
products in the context of causation analysis:
We note in this regard that there would seem to be a relationship between the depth of
detail and degree of specificity required in a causation analysis and t he breadth and
heterogeneity of the like or directly competitive product definition. Where as here a very
broad product definition is used, within which there is considerable heterogeneity, the
analysis of the conditions of competition must go considerably beyond mere statistical
comparisons for imports and the industry as a whole, as given their breadth, the
statistics for the industry and the imports as a whole will only show averages, and
therefore will not be able to provide sufficiently specific inform ation on the locus of
competition in the market.409
7.256. For the above reasons, we conclude that the Indian competent authority failed to properly
examine the price competition between imported and domestic products, when it based its price
comparison on the average unit price of imported products and the average unit price of the like or
directly competitive domestic products.410
7.257. In light of the foregoing, we conclude that India acted inconsistently with the first sentence
of Article 4.2(b) of the Agreement on Safeguards, by failing to demonstrate the existence of a causal
link between the increased imports and serious injury suffered by the domestic industry.
7.9.4 Non-attribution analysis
7.9.4.1 Introduction and general considerations relevant to Japan 's claims on
non-attribution analysis
7.258. Japan claims that India acted inconsistently with the second sentence of Article 4.2(b) of the
Agreement on Safeguards, because it failed to examine "other factors" allegedly causing injury to
the domestic industry at the same time with the in creased imports and to ensure that the injury
caused by those other factors was not attributed to the increased imports.411
7.259. Japan argues that the Indian competent authority failed to properly examine or to examine
at all the following "other factors"412:
a. captive sales of the domestic industry and changes in the market share of other Indian
producers not included in the definition of the domestic industry;
b. the domestic industry's "own internal factors" (including high interest costs, depreciation,
and fixed cost burden; high freight costs and poor infrastructure; raw material crisis; low
capacity utilization; inability to meet the quality requirements of specific downstream
industry); and
c. other factors causing the decline in profitability (including stagnant sales, higher salaries
and wages, higher usage of imported coal and higher depreciation of capitalization of new
facilities, and reduction in interest earning on term deposits).

However, a number of panels have clarified that where a broad basket of goods under consideration
and a broad basket of domestic goods have been found by an investigating authority to be "like",
this does not mean that each of the goods included in the basket of domestic goods is "like" each
of the goods included within the scope of the product under consideration.
(Panel Report, China – X-Ray Equipment, para. 7.65 (referring to Panel Report, EC – Salmon (Norway),
paras. 7.13-7.76).
409 Panel Report, Argentina – Footwear (EC), fn 557.
410 We note the argument of Japan that the Indian competent authority failed to take into account other
factors that might have had an impact on the domestic industry's prices, profitability, and ability to increase its
production and sales. The enquiry regarding other factors causing serious injury to the domestic industry
simultaneously with the increased imports is subject to the second sentence of Article 4.2(b). Such other
factors, challenged by Japan under the second sentence of Article 4.2(b), are addressed in section 7.9.4 below.
411 Japan's first written submission, paras. 378 and 388; second written submission, paras. 210-211.
412 Japan's first written submission, paras. 391-394; second written submission, paras. 222-229.

7.260. India's main response to Japan 's claim on the alleged lac k of a non -attribution analysis is
that the Indian competent authority did not consider that the "other factors" alleged by the
interested parties during the investigation were "relevant". India submits that Articles 4.2(a)
and 4.2(b) should be interpreted in a mutually consistent way. 413 India asserts that Article 4.2(a)
requires a competent a uthority to evaluate all relevant factors " of an ob jective and quantifiable
nature" which are "having a bearing on the situation" of the domestic industry. According to India,
a competent authority has discretion to determine whether "other factors", apart from those
specifically listed in Article 4.2(a), are "relevant" based on criteria "of an objective and quantifiable
nature" and " have a bearing on the situation" of t he domestic industry. India argues that the
obligation to conduct a non-attribution analysis pursuant to the second sentence of Article 4.2(b)
only arises when a competent authority has determined that a specific factor is "relevant".414
7.261. We reject India 's argument that the phrase "factors other than increased imports" in
Article 4.2(b) has to be understood to refer to only those factors that have been found by
a competent authority to be "relevant" under Article 4.2(a). The second sentence of Article 4.2(b)
and Article 4.2(a) are interrelated to the extent that the analyses required under these provisions
contribute to the ultimate determination whether the increased imports are causing or threatening
to cause serious injury to the domestic industry. 415 Some "relevant factors" evaluated under
Article 4.2(a) might be related to the "factors other than increased imports" allegedly causing injury
to the domestic industry. 416 However, Article 4.2(a) and the second sentence of Article 4.2(b) set
out different requirements that a competent authority must satisfy towards its determination that
the increased imports are causing or threatening to cause serious injury to the domestic industry .
Under Article 4.2(a) a competent authority must evaluate all "relevant factors " of objective and
quantifiable nature having a bearing on the situation of the domestic industry. The second sentence
of Article 4.2(b) requires a competent authority to examine "factors other than increased import s"
that may be simultaneously causing serious injury to the domestic industry and to ensure that the
injuries caused by such other factors are not attributed to increased imports. We recall that the
increased imports do not need to be the sole source of injury caused to the domestic industry . A
competent authority must appropriately assess any other sources of injury and "separate and
distinguish" the injurious effects of those "other factors" from the injurious effects of the increased
imports.417
7.262. Therefore, in addressing Japan 's claim under Article 4.2(b), we will consider whether the
Indian competent authority properly examined factors other than increased imports allegedly
causing injury to the domestic industry and whether the injury caused by those "other factors", if
any, was distinguished and separated from the injurious effects of the increased imports.418
7.263. Before turning to Japan's specific arguments, we note that the sections on causal link in the
Preliminary and Final Findings do not contain any non -attribution analysis. However, the different
sections of the Final Findings include a discussion of the interested parties ' arguments regarding
other factors causing injury to the domestic industry. Indeed, the section of the Final Findings
regarding the causal link between the increased imports and the serious injury does not include an
examination of "other factors" causing injury to the domestic industry. We recall that it is not decisive
how a competent authority structure s its report, as long as the competent authority 's analysis,
considered in its totality establishes the existence of both a serious injury and a causal link between
the increased imports and such injury consistently with the Agreement on Safeguards.419 Therefore,
we will consider the Indian competent authority 's entire determination in reviewing Japan's claims
regarding the non-attribution analysis.

413 India's first written submission, para. 276 (referring to Panel Reports, US – Steel Safeguards,
para. 10.318).
414 India's first written submission, para. 279; second written submission, paras. 16-19.
415 Panel Report, China – Cellulose Pulp, para. 7.10 (in the context of Article 3 of the Anti-Dumping
Agreement).
416 E.g. capacity utilization is a factor to be evaluated under Article 4.2(a), while overcapacity may be an
"other factor" causing injury to the domestic industry.
417 Appellate Body Reports, US – Line Pipe, paras. 215 and 217; US – Lamb, paras. 179-180; US –
418 Appellate Body Reports, US – Line Pipe, paras. 215 and 217; US – Lamb, paras. 179-180; US –

7.9.4.2 The captive sales of domestic industry and sales of producers outside the
domestic industry
7.264. Japan refers to the argument made by the European Union during the investigation that
captive sales and sales by other domestic producers should have been examined. Japan also argues
that, although the Indian competent authority noted that the domestic industry 's market share
decreased by 2 percentage points while other Indian producers ' market sha re increased by
2 percentage points, it failed to determine that this factor was not a cause of injury suffered by the
domestic industry and failed to provide a reasoned and adequate explanation on this issue. According
to Japan, the data show that the domestic industry's market share was partially taken by other
Indian producers and that competition with other domestic producers is likely to be one of the causes
of injury. Japan underlines the importance of providing sufficient explanation on this issue , given
that the Indian competent authority relied on the decline in the domestic industry's market share in
its finding of serious injury. Japan also argues that the Indian competent authority failed to consider
whether the increase in captive sales by the domestic industry was one of the causes of the alleged
injury.420
7.265. India responds that increased imports do not need to be the sole cause of serious injury.
India refers to Japan's statement that the domestic industry's market share was only partially taken
by other Indian producers. Regarding the analysis of captive sales, India reiterates that the Indian
competent authority was required only to examine the "share of domestic market taken by the
increased imports".421
7.266. During the underlying investigation, the European Union noted that Indian producers that
were not included into the domestic industry increased their "open market sales" by 42%. In this
regard, the Indian competent authority observed that the market share of other Indian producers
increased by 2 percentage points, while the market share of the domestic industry decreased by
2 percentage points during the period 2014 -2015 and the first quarter of 2015 -2016. It further
stated that the increased imports had taken all the increase in demand of the pro duct concerned.
Specifically, in 2014-2015 demand (excluding captive) increased by 1,303,069 tonnes and imports
increased by 1,392,470 tonnes.422 The Indian competent authority did not examine further these
two alleged "other factors".
7.267. The fact that other do mestic producers gained market share, while the domestic industry
was losing it, suggests that the performance of other producers might have contributed to the injury
caused to the domestic industry. The Indian competent authority failed to explain whether
performance of producers outside the domestic industry was a factor causing injury to the domestic
industry and how it made sure that injury, if any, caused by this factor was not attributed to the
increased imports . Regarding captive sales, the Indian co mpetent authority simply restated its
finding that imports increased along with the increase in demand, but failed to explain whether
captive sales were a factor causing injury to the domestic industry.
7.268. If the Indian competent authority considered that the factors the interested parties raised
were not causing injury to the domestic industry at the same time with the increased imports, it was
nevertheless required to examine the alleged "other factors" and provide a reasoned and adequate
explanation as to why these factors were not a source of injury to the domestic industry. As noted
by the panel in Ukraine – Passenger Cars:
When the competent authorities determine that there are no other factors causing injury
at the same time as increased imports, or that factors argued to be causing injury are
not, in fact, doing so, this, too, must be stated explicitly in the published report,
accompanied by a clear, explicit, and adequate explanation. Otherwise, it would be
impossible to determine whether the imposing Member has properly considered whether
factors other than imports are causing injury to the domestic industry, and if so, whether
that Member has ensured that such injury is not attributed to the increased imports.423

420 Japan's first written submission, paras. 392-393; second written submission, paras. 226-228.
421 India's first written submission, paras. 288-290.
422 Final Findings, (Exhibits JPN-11/IND-11), para. 97, p. 207.
423 Panel Report, Ukraine – Passenger Cars, para. 7.334. (fn omitted)

7.269. Therefore, we conclude that the Indian competent authority failed to provide a reasoned and
adequate explanation as to why the captive sales of the domestic industry and the sales of domestic
producers outside the domestic industry were not a source of injury to the domestic industry.
7.9.4.3 The domestic industry's own internal factors
7.270. Japan submits that the Indian competent authority failed to properly examine the following
"other factors" the interested parties raised during the investigation (i ) high interest costs,
depreciation, and fixed cost burden; (ii) high freight costs and poor infrastructure; (iii) raw material
crisis; (iv) low capacity utilization ; and (v) inability to meet the quality requirements of specific
downstream industry.424 Japan argues that the Final Findings do not include a clear de termination
that the identified factors are not causing injury to the domestic industry nor any explanation in this
regard.425 India responds that its authority considered that the factors raised by the interested
parties were "very general" or were not supp orted by the facts . India submits that the domestic
industry has existed for many years and performed well in the past.426
7.271. In paragraph 51 of the Final Findings, in the section regarding the determination of serious
injury, the Indian competent authority not ed the interested parties ' arguments that the serious
injury suffered by the domestic industry was due to the domestic industry 's "own internal factors",
including (i) high interest costs, depreciation, and fixed cost burden; (ii) high freight costs and poor
infrastructure; (iii) raw material crisis ; (iv) low capacity utilization ; and (v) inability to meet the
quality requirements of specific downstream industries.427 The Indian competent authority addressed
these arguments in paragraph 52 of the Final Findings, as follows:
These claims are very general and without any facts and figures to support. The fact
that injury has been caused due to increased quantities of imports of the [product under
consideration] in India has already been established above. I fi nd that the domestic
industry has been in existence since many years and has been doing well in the past.
Infrastructure and capacities are in place with the domestic industry to meet the
demand of the [product under consideration] . The efficiency of a uni t depends on
several factors and if their efficiencies were of a higher order, probably there was no
need for the DI to ask for safeguard action. Mere existence of inefficiencies in certain
areas cannot be a reason to deny safeguard protection to the Domes tic Industry. The
very reason why safeguard protection is sought and given and is provided for under
[the Agreement on Safeguards] is that the DI is unable to handle competition and can
get some time to adjust to the International competition over a period of time. The main
determining factor is that there should be a serious injury or threat of serious injury
and there is a causal link with the increased imports. I observe that there is a significant
increase in imports of the subject goods which have caus ed serious injury to the
domestic industry which has been duly substantiated in the foregoing paras.428
7.272. The Indian competent authority noted that it had already found that the increased imports
caused serious injury to the domestic industry and that the "[m]ere existence of inefficiencies in
certain areas" was not a reason for not applying the safeguard measure. This statement of the Indian
competent authority is not dispositive of the question of whether other factors were simultaneously
contributing to the injury caused by the increased imports. As noted above, the increased imports
do not need to be the sole source of injury caused to the domestic industry and a competent authority
must assess other sources of injury and not attribute that injury to the inc reased imports. Having
said that, paragraphs 51 and 52 of the Final Findings show that the Indian competent authority
considered arguments made by the interested parties and rejected them, because in its view they
were "very general and without any facts and figures to support".429 The Indian competent authority
also stated that "the domestic industry has been in existence since many years and has been doing
well in the past. Infrastructure and capacities are in place with the domestic industr y to meet the

424 Japan's first written submission, para. 391 (referring to Final Findings, (Exhibit JPN-11), para. 51,
p. 200).
425 Japan's first written submission, para. 391; second written submission, paras. 222-225.
426 India's first written submission, para. 278.
427 Final Findings, (Exhibits JPN-11/IND-11), para. 51, p. 200.
428 Final Findings, (Exhibits JPN-11/IND-11), para. 52, p. 200.
429 Final Findings, (Exhibits JPN-11/IND-11), paras. iv(mm) and 52, pp. 176 and 200.

demand of the [product under consideration]".430 In response to a question from the Panel on the
specific arguments the interested parties raised during the underlying investigation, Japan referred
to the general summaries of interested parties' submissions provided in the Final Findings.431 Japan
failed to identify any specific evidence or facts on the record of the investigation that in its view the
Indian competent authority failed to address. Although the Final Findings would have benefited from
more elaborate and detailed explanation, Japan did not establish what facts or evidence the Indian
competent authority failed to consider and what explanation is lacking regarding these factors.
7.273. Therefore, we conclude that Japan has not established that the Indian co mpetent authority
failed to provide a reasoned and adequate explanation regarding the following alleged "other factors"
causing injury to the domestic industry: high interest costs, depreciation, and fixed cost burden;
high freight costs and poor infrastructure; raw material crisis; low capacity utilization; and inability
to meet the quality requirements of specific downstream industry.
7.9.4.4 Other factors causing the decline in profitability
7.274. Japan additionally submits that the Indian competent authority failed t o consider the
interested parties' arguments that the decline in profitability of the domestic industry was caused by
factors other than the increased imports. Japan argues that consideration of these arguments is
important given the different trends in the increase in imports and changes in profitability discussed
above. Japan adds that the Final Findings state that the increased imports were the "major reason"
for the decline in profitability, which suggests that there were other reasons for the losses su ffered
by the domestic industry.432 India responds that increased imports do not need to be the sole cause
of deterioration of the state of domestic industry.433 India refers to paragraph 52 of the Final Findings
to note that any minor or insignificant factors affecting profitability were not "having a bearing" on
the situation of the domestic industry.434
7.275. In the section titled "Submissions by Embassies and Delegations from countries", the Indian
competent authority noted Turkey 's submission that the profitabilit y of the domestic industry
declined due to factors other than the increased imports, such as "stagnant sales, higher salaries
and wages[,] higher usage of imported coal and higher depreciation of capitalisation of new facilities,
and reduction in interest earning on term deposits". 435 The Indian competent authority d id not
provide any further examination of Turkey's argument. In response to a question from the Panel,
India noted that these arguments were addressed in paragraphs 51 and 52 of the Final Findings
together with other arguments of the interested parties regarding the domestic industry 's own
internal factors. 436 The factors indicated in paragraph 51 do not include specific "other factors"
affecting profitability raised by Turkey (see paragraph 7.271 above). Neither does paragraph 52 of
the Final Findings include any discussion of the specific arguments relating to the domestic
industry's internal factors Turkey raised regarding other factors affecting the domestic
industry's profitability.
7.276. Furthermore, the Indian competent authority found that "[t]he major reason for decline in
profitability of domestic industry is the increased imports at reduced prices".437 India admitted that
there might have been other factors affecting profitability than the increased imports at reduced
prices, but they were minor or insignificant and did not have a bearing on the situation of the
domestic industry.438 As noted above, the increased imports do not need to be the sole source of
injury to the domestic industry. 439 Nonetheless, t he Indian competent authority should have
addressed any other alleged factors affecting profitability and to provide a reasoned and adequate

430 Final Findings, (Exhibits JPN-11/IND-11), para. 52, p. 200. See also ibid. para. iv(mm), p. 176.
431 Japan's responses to Panel question Nos. 122 and 123 (referring to Final Findings, (Exhibit JPN-11),
para. IX(m), p. 133; paras. XII(l), XII(m), XIII(h), and XIII(j), p. 136; paras. VIII(f) and IX(f),
pp. 153-154; and para. XIII(g), p. 186).
433 India's first written submission, para. 290.
434 India's first written submission, para. 290 (referring to Final Findings, (Exhibit IND-11), para. 52).
435 Final Findings, (Exhibits JPN-11/IND-11), section C, VIII(f), pp. 153-154.
436 India's response to Panel question No. 61.
437 Final Findings, (Exhibits JPN-11/IND-11), para. 56, p. 201. (emphasis added)
438 India's first written submission, para. 290 (referring to Final Findings, (Exhibit IND-11), para. 52).
439 See para. 7.238 above.

explanation of whether these factors were causing injury to the domestic industry and how it made
sure that injury, if any, caused by these factors was not attributed to the increased imports.
7.277. We conclude that the Indian competent authority failed to provide a reasoned and adequate
explanation regarding other factors causing a decline in the profitability of the domestic industry.
7.9.4.5 Conclusion
7.278. In light of the foregoing, we conclude that India acted inconsistently with the
second sentence of Article 4.2(b) of the Agreement on Safeguards, by failing to conduct a proper
non-attribution analysis.440
7.9.5 Consequential claims
7.279. Japan submits that the fact that India acted inconsistently with Article 4.2(b) also leads to a
violation of Articles 2.1 and 4.2(a) of the Agreement on Safeguards a nd Article XIX:1(a) of the
GATT 1994.441 We have found above that India acted inconsistently with its obligations under
Article 4.2(b) with regard to its causation and non-attribution analyses. In the preceding sections of
this Report, we have also found tha t India acted inconsistently with Articles 2.1 and 4.2(a) of the
Agreement on Safeguards and Article XIX:1(a) of the GATT 1994. In light of this, we see no need to
address Japan's consequential claims whether India acted inconsistently with Articles 2.1 and 4.2(a)
of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 with respect to its causation
and non-attribution analyses. We therefore exercise judicial economy and decline to make findings
on these claims.
7.10 Whether India acted inconsistentl y with Articles 5.1 and 7.1 of the Agreement on
Safeguards and Article XIX:1(a) of the GATT 1994
7.280. Japan claims that India acted inconsistently with Articles 5.1 and 7.1 of the Agreement on
Safeguards and Article XIX:1(a) of the GATT 1994 by failing to impose the safeguard measure only
to the extent and for such time necessary to prevent or remedy serious injury. Japan argues that
the second sentence of Article 4.2(b) serves as a context for interpreting Article 5.1 and that the
phrase "to the extent necessar y to prevent or remedy serious injury" means that safeguard
measures shall be applied only to the extent that they address serious injury "attributed" to
increased imports.442 Japan refers to its claim under Article 4.2(b) of the Agreement on Safeguards
and argues that since the Indian competent authority failed to demonstrate the causal link between
the increased imports and the serious injury, it was consequently unable to ensure that the safeguard
measure was applied only to the extent necessary to prevent or remedy serious injury caused by
the increased imports.443
7.281. Japan further submits that the second sentence of Article 4.2(b) of the Agreement on
Safeguards also serves as a context for interpreting Article 7.1. Japan argues that the requirement
in Article 7.1 that safeguard measures shall be applied "only for such period of time as may be
necessary to prevent or remedy serious injury" refers to the injury "attributed" to increased imports.
Japan considers that this requirement also applies to Article XIX:1(a) of the GATT 1994. In
Japan's view, considering that the Indian competent authority 's causation and non -attribution
analysis was inconsistent with Article 4.2(b), the Indian competent authority was consequently
unable to ensure that the safeguard measure was applied "only for such period of time as may be
necessary to prevent or remedy serious injury" . Therefore, Japan submits that India acted

440 We also note Japan's argument that, for the purpose of non-attribution analysis, India failed to
distinguish the impact of imports caused by unforeseen developments and the effect of the obligations incurred
under the GATT 1994 from the impact of imports caused by other reasons. (Japan's first written submission,
para. 395). We have found above that India acted inconsistently with Article XIX:1(a) of the GATT 1994 with
respect to its consideration of unforeseen developments and the effect of GATT obligations. We have also found
that India's non-attribution analysis is inconsistent with Article 4.2(b). In light of these findings, we see no
need to address this argument of Japan.
441 Japan's first written submission, paras. 396-399; second written submission, para. 232.
442 Japan's first written submission, para. 404 (referring to Appellate Body Report, US – Line Pipe,
paras. 252 and 260).
443 Japan's first written submission, paras. 410-411; second written submission, para. 240.

inconsistently with Article 7.1 of the Agreement on Safeguards and Article XIX:1(a) of the
GATT 1994.444
7.282. India responds that the obligation to justify that safeguard measures are applied "to the
extent necessary" arises only in case of safeguard measures in the form of quantitative restrictions,
as provided in the second sentence of Article 5.1.445 India submits that Jap an failed to show that
there is any obligation in Article 5.1 for competent authorities to provide explanations with respect
to duties imposed as safeguards .446 India argues that a non -attribution analysis conducted under
Article 4.2(b) itself ensures that t he safeguard duties applied address only the serious injury
attributed to the increased imports. India contends that the Appellate Body 's interpretation of
Articles 4.2(b) and 5.1 in US – Line Pipe means that once a non -attribution analysis has been
conducted in accordance with Article 4.2(b), the measure ipso facto complies with Article 5.1.447
India argues that neither the Agreement on Safeguards nor Article XIX:1(a) of the GATT 1994
provide for the period of time that co uld be sufficient to remedy serious injury or to facilitate
adjustment. India submits that it has fully complied with Article 4.2(b) and that Japan failed to
substantiate its claim that India acted inconsistently with Article 7.1.448
7.283. The first sentence of Article 5.1 of the Agreement on Safeguards reads:
A Member shall apply safeguard measures only to the extent necessary to prevent or
remedy serious injury and to facilitate adjustment.
7.284. Article 7.1 of the Agreement on Safeguards provides:
A Member shall app ly safeguard measures only for such period of time as may be
necessary to prevent or remedy serious injury and to facilitate adjustment. The period
shall not exceed four years, unless it is extended under paragraph 2.
7.285. Japan's claims under Articles 5.1 and 7.1 of the Agreement on Safeguards relate to the
duration of the safeguard measure at issue and the level of the duties imposed. Since we have found
above that the safeguard measure was inconsistent with Articles 2.1, 4.1(a), 4.1(b), 4.2(a) ,
and 4.2(b) of the Agreement on Safeguards, as well as Article XIX:1(a) of the GATT 1994, we do
not consider it necessary for the purposes of resolving this dispute to make additional findings on
whether India has also acted inconsistently with its obligations under Articles 5.1 and 7.1. We
therefore exercise judicial economy and make no findings on these claims. We also exercise judicial
economy with regard to Japan 's consequential claim in this regard under Article XIX:1(a) of the
GATT 1994.
7.11 Whether India acted inconsistently with Articles 3.1 and 4.2(c) of the Agreement on
Safeguards
7.286. Japan refers to its previous claims that the Indian competent authority failed to provide in
its Preliminary Findings and Final Findings a reasoned and adequate explanation of its various
determinations, namely concerning (i) unforeseen developments, (ii) the effects of the obligations
incurred under the GATT 1994 , (iii) the increase in imports , (iv) the definition of the domestic
industry, (v) the serious injury and threat thereof , (vi) the existence of a causal link, and (vii) the
imposition of the measures to the extent and for the time necessary to prevent or remedy serious
injury. Consequently, Japan argues that India acted inconsistently with the last sentence of
Article 3.1 and Article 4.2(c) of the Agreement on Safeguards by failing to set forth findings and
reasoned conclusions for all pertinent issues of fact and law. 449 India responds that it has
demonstrated that its competent authority fully complied with the obligations under the Agreement

444 Japan's first written submission, paras. 417-419.
445 India's first written submission, paras. 293 and 296 (referring to Appellate Body Report, Korea –
Dairy, paras. 98-100).
446 India's first written submission, para. 297.
447 India's first written submission, paras. 298-300.
448 India's first written submission, paras. 302-305.
449 Japan's first written submission, paras. 425-426; second written submission, para. 244.

on Safeguards and Article XIX of the GATT 1994 and provided reasoned and adequate explanations
of its determination concerning "all pertinent issues of fact and law".450
7.287. Article 3.1 of the Agreement on Safeguards, in relevant part, reads as follows:
The competent authorities shall publish a report setting forth their findings and reasoned
conclusions reached on all pertinent issues of fact and law.
7.288. Article 4.2(c) of the Agreement on Safeguards, provides:
The competent authorities shall publish pro mptly, in accordance with the provisions of
Article 3, a detailed analysis of the case under investigation as well as a demonstration
of the relevance of the factors examined.451
7.289. We have found above that India (i) acted inconsistently with Article XIX:1(a) of the
GATT 1994, by failing to provide a reasoned and adequate explanation that the increase in imports
of the product concerned into India occurred as a result of unforeseen developments and the effect
of the relevant obligations of the GATT 1994; (ii) acted inconsistently with Articles 2.1 and 4.2(a) of
the Agreement on Safeguards and Article XIX:1 of the GATT 1994, by failing to objectively examine
trends in imports and to provide a reasoned and adequate explanation with regard to its conclusions
on increased imports; (iii) acted inconsistently with Articles 4.1(a) and 4.2(a) of the Agreement on
Safeguards, by failing to provide a reasoned and adequate explanation regarding its evaluation of
certain injury factors and its assessment of the situatio n of the domestic industry ; (iv) acted
inconsistently with Articles 4.1(b) and 4.2(a) of the Agreement on Safeguards , because the
existence of a threat of serious injury was not adequately addressed or analysed in the findings of
the competent authority ; and (v) acted inconsistently with Article 4.2(b) of the Agreement on
Safeguards, by failing to conduct a proper causation and non-attribution analysis. We consequently
conclude that India acted inconsistently with its obligations under Articles 3.1 and 4.2( c) of the
Agreement on Safeguards, by failing to provide reasoned conclusions on all pertinent issues of fact
and law.
7.290. We have also found above that Japan has not demonstrated that India acted inconsistently
with Article 4.1(c) of the Agreement on Safeguar ds with regard to its definition of the domestic
industry. Accordingly, we reject Japan 's consequential claims in this regard under Articles 3.1
and 4.2(c) of the Agreement on Safeguards.
7.291. Finally, we did not make findings on Japan 's claims that India acted inconsistently under
Articles 5.1 and 7.1 of the Agreement on Safeguards, by imposing the measure to the extent and
for the time necessary to prevent or remedy serious injury. According, w e also exercise judicial
economy and make no findings in this regar d under Articles 3.1 and 4.2(c) of the Agreement on
Safeguards.
7.12 Whether India acted inconsistently with Article 11.1(a) of the Agreement on
Safeguards
7.292. Japan refers to its claims above that the safeguard measure imposed by India is inconsistent
with various provisions of the Agreement on Safeguards as well as Article XIX:1(a) of the
GATT 1994. Consequently, Japan argues that India acted inconsistently with Article 11.1(a) of the
Agreement on Safeguards.452
7.293. Article 11.1(a) of the Agreement on Safeguards provides that:
A Member shall not take or seek any emergency action on imports of particular products
as set forth in Article XIX of GATT 1994 unless such action conforms with the provisions
of that Article applied in accordance with this Agreement.

450 India's first written submission, para. 314.
451 In US – Steel Safeguards, the panel found that Article 4.2(c) of the Agreement on Safeguards is an
elaboration of the requirement set out in Article 3.1, last sentence, to provide a "reasoned conclusion" in a
published report. (Panel Reports, US – Steel Safeguards, para. 289).

7.294. We rec all our findings above that the safeguard measure at issue is inconsistent with
Articles 2.1, 3.1, 4.1(a), 4.1(b), 4.2(a), 4.2(b), and 4.2(c) of the Agreement on Safeguards as well
as Article XIX:1(a) of the GATT 1994. We therefore do not consider it neces sary, for the purposes
of resolving this dispute, to make additional findings on whether India has also acted inconsistently
with its obligations under Article 11.1(a) of the Agreement on Safeguards. We therefore exercise
judicial economy and make no findings on this claim.
7.13 Whether India acted inconsistently with Article 12 of the Agreement on Safeguards
in notifying its measure and providing opportunities for consultations
7.13.1 Japan's claim under Article 12.4 of the Agreement on Safeguards
7.13.1.1 Introduction
7.295. Japan claims that India acted inconsistently with Article 12.4 of the Agreement on
Safeguards, because it notified the provisional safeguard measure to the WTO Committee on
Safeguards after the measure had been taken.453
7.296. India does not dispute the facts. Ind ia argues, however, that its competent authority
concluded that the provisional measure had to be imposed "on an urgent basis" , because of the
injury suffered by the domestic production, and because any delay in the application of a provisional
safeguard duty would have caused damage which would have been difficult to repair. India adds
that the provisional measure was imposed only for 200 days, which have since lapsed.454 India also
argues that the notification requirement in Article 12.4 "is, at best, a pro cedural requirement" and
that "the substantive right of a Member to address the 'critical circumstances ' as envisaged in
Article 6 would be substantially diluted if an action in terms of this Article is made contingent upon
a mere notification requirement under Article 12.4".455
7.297. In response, Japan argue s that India's defence "does not have any legal basis in the
Agreement on Safeguards and must therefore be rejected by the Panel".456 Japan adds that the fact
that the circumstances of the case necessitated an urgent imposition of the provisional safeguard
measure does not relieve India from its obligation under Article 12.4. Japan also argues that
provisional safeguard measures are by nature "urgent" . In its view, "urgency" does not constitute
an argument to escape the notification obligation under Article 12.4.457
7.298. The parties do not disagree on the relevant facts.
7.299. The Indian competent authority initiated the safeguard investigation at issue on
7 September 2015.458
7.300. On 9 September 2015, the Indian competent authority issued its Preliminary Findings, in
which it concluded that (i) increased imports of the products concerned into India caused and
threatened to cause serious injury to the domestic industry ; and (ii) critical circumstances existed
when any delay in the application of safeguard measures would cause serious damage which would
be difficult to repair. The Indian competent authority imposed a provisional safeguard duty of 20%
ad valorem for 200 days.459
7.301. On 14 September 2015, the Department of Revenue, Ministry of Finance, after considering
the Indian competent authority's Preliminary Findings, imposed a provisional safeguard duty of 20%
ad valorem on imports into India of the products concerned. The duty would have a

453 Japan's first written submission, paras. 438-439; second written submission, para. 246.
454 India's first written submission, para. 336.
455 India's response to Panel question No. 128.
456 Japan's opening statement at the first meeting of the Panel, para. 103. See also response to Panel
question No. 65, para. 104; and comments on India's response to Panel question No. 128, para. 81.
457 Japan's second written submission, paras. 248-249; response to Panel question No. 65, para. 105.
458 Notice of Initiation, (Exhibits JPN-4/IND-4), pp. 5-8.
459 Preliminary Findings, (Exhibits JPN-7/IND-7), pp. 12-19.

200-day duration. The measure entered into force on 14 September 2015, the date in which the
notification imposing the provisional safeguard measure was published in The Gazette of India.460
7.302. On 15 September 2015, India notified the WTO Committee on Safeguards, pursuant to
Article 12.1(a) of the Agreement on Safeguards, of the initiation of the safeguard investigation. 461
On 28 September 2015, India notified the WTO Committee on Safeguards, pursuant to Article 12.4
and Article 9, footnote 2, of the Agreement on Safeguards, of the application of the provisional
safeguard measure.462
7.13.1.2 Evaluation by the Panel
7.303. Article 12.4 of the Agreement on Safeguards provides in relevant part that:
A Member shall make a notification to the Committee on Safeguards before taking a
provisional safeguard measure referred to in Article 6.463
7.304. As noted above, the parties do not disagree on the relevant facts. The provisional safeguard
measure at issue entered into force on 14 September 2015, whereas India not ified the
Committee on Safeguards of this measure on 28 September 2015, i.e. two weeks later. Both parties
agree that the measure in question is a provisional safeguard measure of the type referred to in
Article 6 of the Agreement on Safeguards. Consequently, as a matter of fact, India did not notify the
Committee on Safeguards before taking the provisional safeguard measure at issue.
7.305. The circumstances that India raised (namely, that its competent authority concluded that
provisional measures had to be impo sed "on an urgent basis" ) do not exempt India from its
obligation under Article 12.4.
7.13.1.3 Conclusion
7.306. For the reasons explained above, we conclude that India acted inconsistently with
Article 12.4 of the Agreement on Safeguards by failing to notify the Committee on Safeguards before
taking the provisional safeguard measure at issue.
7.13.2 Japan's claim under Article 12.1 of the Agreement on Safeguards
7.13.2.1 Introduction
7.307. Japan claims that India acted inconsistently with Article 12.1 of the Agreement on
Safeguards, because it failed to notify the WTO Committee on Safeguards immediately
upon (i) initiating the investigation relating to serious injury or threat thereof , (ii) making a finding
of serious injury or threat thereof caused by increased imports, and (iii) taking a decision to apply a
safeguard measure.
7.308. With respect to Article 12.1(a), Japan notes that India published the notice of the initiation
of the safeguard investigation in The Gazette of India on 7 September 2015, while the
WTO Committee on Safeguards was notified on 15 September 2015. Japan argues that the term
"immediately" used in Article 12.1 should be examined on a case by case basis "considering in
particular the complexity of the notification being made and the need for translation into one of the
WTO's official languages ".464 Japan submits that, in the present case there was no issue of
translation since the Notice of Initiation was originally published in English in The Gazette of India.
Moreover, the notification made to the WTO was relatively short (450 words), compared to previous
cases, and the elements contained in the notification were the usual, were not complex, and were

460 Notification imposing a provisional safeguard measure, (Exhibits JPN-8/IND-8), p. 2.
461 Notification under Article 12.1(a) of the SA (15 September 2015), (Exhibits JPN-9/IND-9).
462 Notification under Article 12.4 of the SA (28 September 2015), (Exhibits JPN-10/IND-10).
463 Emphasis added. Article 6 of the Agreement on Safeguards is the provision on Provisional Safeguard
Measures.
464 Japan's first written submission, paras. 447 and 454. See also ibid. para. 443; and second written
submission, para. 252 (referring to Appellate Body Report, US – Wheat Gluten, para. 105).

already included in the Notice of Initiation itself.465 Japan concludes that the notification that India
made to the Committee on Safeguards after eight days of the initiation of the safeguard investigation
was not "immediate" and was therefore inconsistent with Article 12.1(a) of the Agreement on
Safeguards.466 Japan adds that this 8 -day delay is all the more problematic as India imposed the
provisional safeguard duty on 14 September 2015, that is , before India notified the Committee on
Safeguards of the initiation of the investigation. According to Japan, considering such a delay as an
"immediate" notification would go against the purpose of Article 12, which is to ensure transparency,
as WTO Members were not even informed of the initiation of the investigation at the time of the
imposition of the provisional safeguard duty.467
7.309. With respect to Article 12.1(b), Japan notes that India published the Final Findings for the
safeguard investigation in The Gazette of India on 15 March 2016, while the WTO Committee on
Safeguards was notified on 21 March 2016. Japan argues again that the examination of the term
"immediately" should be do ne considering the complexity of the notification being made and the
need for translation into one of the WTO 's official languages.468 Japan submits that, in the present
case there was no issue of translation since the Final Findings were originally published in English in
The Gazette of India . Moreover , the notification made to the WTO was relatively short
(1,300 words).469 Japan concludes that the notification that India made to the Committee on
Safeguards after six days of the Final Findings for the safeguard investigation was not "immediate"
and was therefore inconsistent with Article 12.1(b) of the Agreement on Safeguards.470
7.310. With respect to Article 12.1(c), Japan notes that India published the decision to apply a
definitive safeguard measure in The Gazette of India on 29 March 2016, while the WTO Committee
on Safeguards was notified on 4 April 2016. Japan submits that, in the present case there was no
issue of translation since the decision to apply the safeguard measure was originally published in
English in The Gazette of India . Moreover , the notification made to the WTO was very short
(330 words).471 Japan concludes that the notification that India made to the Committee on
Safeguards after six days of the decision to apply a definitive safeguard mea sure was not
"immediate" and was therefore inconsistent with Article 12.1(c) of the Agreement on Safeguards.472
7.311. India does not dispute the facts as described by Japan. India states that it notified the
Committee o n Safeguards of each of the relevant decisions within six to eight days (four to
six working days) from the date of initiation, the date of the findings of serious injury, and from the
date of the imposition of the definitive safeguard measure, respectively.473
7.312. India notes that, once the competent authority under Indian legislation adopts the relevant
decision, this decision is published in the Gazette of India and then notified with the relevant
documents to the Ministry of Commerce, which is the department in charge of making notifications
to the WTO. The Ministry of Commerce prepares a summary of the relevant decision in order to fulfill
the requirements of Article 12 of the Agreement on Safeguards. The duration of this step depends
on the complexities of the case. Once the not ification is prepared, it must be approved by senior
officials. The relevant documents are then sent to the Permanent Mission of India to the WTO, which
files the relevant notification to the Committee.474

465 Japan's first written submission, para. 455. See also second written submission, para. 253.
467 Japan's first written submission, para. 456.
469 Japan's first written submission, para. 459. See also second written submission, para. 253.
470 Japan's first written submission, paras. 457 and 459; second written submission, para. 255.
471 Japan's first written submission, para. 461. See also second written submission, para. 253.
472 Japan's first written submission, paras. 460-461; second written submission, para. 255.
473 India's first written submission, paras. 323-326.
474 India's response to Panel question No. 129. India's response refers to the internal procedures and
steps that are adopted to notify to the Committee on Safeguards the final findings in a safeguard investigation.
(Japan's comments on India's response to Panel question No. 129, para. 82). There is no reason to assume,
however, that those steps are different when notifying the initiation of an investigation or the decision to apply
a safeguard measure.

7.313. In India's view, there was no undue delay in keeping the Members informed of the various
steps of the investigation and therefore, India complied with the requirements of Article 12.1 of the
Agreement on Safeguards.475
7.314. The parties do not disagree on the relevant facts.
7.315. The notice of the initiation of the safe guard investigation at issue by the Indian competent
authority was published in The Gazette of India on 7 September 2015.476 On 15 September 2015,
India notified the WTO Committee on Safeguards, pursuant to Article 12.1(a) of the Agreement on
Safeguards, of the initiation of the safeguard investigation. 477 In other words, India notified the
Committee on Safeguards eight days after the initiation of the investigation.
7.316. The Final Findings of the Indian competent authority for the safeguard investigation were
published in The Gazette of India on 15 March 2016. 478 On 21 March 2016, India notified the
Committee on Safeguards, pursuant to Article 12.1(b) of the Agreement on Safeguards, of the
findings of serious injury or threat thereof caused by increased imports. 479 In other words, India
notified the Committee on Safeguards six days after making a finding of serious injury or threat
thereof caused by increased imports.
7.317. On 29 March 2016, the Department of Revenue's Notification No. 1/2016-Customs (SG),
whereby a definitive safeguard measure was imposed, was published in The Gazette of India.480 On
4 April 2016, India notified the Committee on Safeguards, pursuant to Article 12.1(c) of the
Agreement on Safeguards, of its decision to impose a measure.481 In other words, India notified the
Committee on Safeguards six days after taking a decision to apply a safeguard measure.
7.13.2.2 Evaluation by the Panel
7.318. Article 12.1 of the Agreement on Safeguards provides that:
A Member shall immediately notify the Committee on Safeguards upon:
(a) initiating an investigatory process relating to serious injury or threat
thereof and the reasons for it;
(b) making a finding of serious injury or threat thereof caused by
increased imports; and
(c) taking a decision to apply or extend a safeguard measure.
7.319. As noted above, the parties do not disagree on the relevant facts. India notified the
Committee on Safeguards (i) eight days after initiating the investigation , (ii) six days after making
a finding of serious injury or threat thereof caused by increased imports , and (iii) six days after
taking a decision to apply a safeguard measure.
7.320. Article 12.1 requi res that the notifications in question be made "immediately" upon the
occurrence of the specified events. The word "immediately" can be defined as "without delay, at
once, instantly".482 The Appellate Body in US – Wheat Gluten stated that the word "immediately"
"implies a certain urgency" and that the degree of urgency required depends on a ca se-by-case
assessment, account being taken of the administrative difficulties involved in prepa ring the
notification at issue and the character of the information supplied. The Appellate Body clarified in

475 India's first written submission, para. 326.
476 Notice of Initiation, (Exhibits JPN-4/IND-4), pp. 5-8.
477 Notification under Article 12.1(a) of the SA (15 September 2015), (Exhibits JPN-9/IND-9).
478 Final Findings, (Exhibits JPN-11/IND-11), pp. 119-209.
479 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12).
480 Notification imposing a definitive safeguard measure, (Exhibits JPN-13/IND-13), pp. 6-7.
481 Notification under Article 12.1(b) and Article 12.1(c) of the SA (4 April 2016),
(Exhibits JPN-14/IND-14).
482 Shorter Oxford English Dictionary, 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007),
Vol. 1, p. 1330.

particular that relevant factors in assessing the degree of urgency may include the complexity of the
notification to be made and the need for translation into one of the WTO 's official languages. The
Appellate Body also cautioned that the amount of time to prepare and submit a notification must, in
all cases, be kept to a minimum, as the underlying obligation is to notify "immediately".483
7.321. The Appellate Body has also stated that an "immediate" notification is that which allows the
Committee on Safeguards, and Members in general, the fullest possible period to reflect upon and
react to an ongoing safeguard investigation .484 This suggests that a determination of whether a
notification was "immediate" does not require consideration of whether the Committee or Members
had sufficient time to review th e notification or whether individual Members suffered prejudice
through an insufficiency in the notification period.485
7.13.2.2.1 Japan's claim under Article 12.1(a)
7.322. Japan asserts that by notifying the Committee on Safeguards of the initiation of the
investigation eight days after the publication of the notice of the initiation of the safeguard
investigation in The Gazette of India , India failed to comply with the requirement of "immediate"
notification.486
7.323. India responds that it notified the initiation of the investigation at issue to the Committee on
Safeguards within eight days (six working days) from the date in which the decision was published
in The Gazette of India. 487 India has referred to the internal administrative process by which the
decision to initiate an investigation is notified to the Committee on Safeguards .488 In India's view,
there was no undue delay in keeping the Members informed of the initiation of the investigation.
India submits that this was an immediate notification in the sense of Article 12.1 of the Agreement
on Safeguards and that it therefore acted consistently with its obligations under this provision.489
7.324. As noted, the parties do not disagree on the relevant facts. The notice of the initiation of the
safeguard investigation was published in The Gazette of Indi a on 7 September 2015 and the
Committee on Safeguards was notified on 15 September 2015. Accordingly, India 's notification to
the Committee on Safeguards of the initiation of the safeguard investigation occurred eight calendar
days after the relevant triggering event (the publication of the initiation of the investigation in The
Gazette of India).
7.325. The notification that India filed is a relatively short document (one and a half pages), which
contains (i) the date of initiation of investigation , (ii) the POI, (iii) the product under investigation,
(iv) the reasons for the initiation of the investigation, (v) the point of contact, and (vi) the deadlines
for interested parties to make their views known and for any other party to submit a request to be
considered as an interested party.490 The information is extracted from the notice of the initiation of
the safeguard investigation which was published in English in The Gazette of India. The notification,
however, does not merely reproduce the notice of the initiation of the investigation. We also note
India's explanation as to the administrative steps that must be completed before a not ification is
filed.
7.326. Finally, we keep in mind that, in previous cases, the following periods between the initiation
of a safeguard investigation and the notification to the Committee on Safeguards under
Article 12.1(a) were found by the respective panels not to have been "immediate" (i) a 14-day period

483 Appellate Body Report, US – Wheat Gluten, para. 105.
484 Appellate Body Report, US – Wheat Gluten, para. 106.
485 Appellate Body Report, US – Wheat Gluten, para. 106.
486 Japan's first written submission, paras. 454-455; second written submission, para. 255.
487 India's first written submission, para. 323.
488 India's response to Panel question No. 129. India's response refers to the internal procedures and
steps that are adopted to notify to the Committee on Safeguards the final decision to apply a safeguard
measure. (See Japan's comments on India's response to Panel question No. 129). There is no reason to
assume, however, that those steps differ considerably when notifying the initiation of an investigation.
489 India's first written submission, paras. 323 and 326.
490 Notification under Article 12.1(a) of the SA (15 September 2015), (Exhibits JPN-9/IND-9).

by the panel on Korea – Dairy491, (ii) a 16-day period by the panel o n US – Wheat Gluten492, and
(iii) an 11-day period by the panel on Ukraine – Passenger Cars.493
7.327. Having considered the above, and although we are aware that the amount of time to prepare
and submit a notification must be kept to a minimum, we find that the notification under
Article 12.1(a) of the Agreement on Safeguards of the initiation of the investigation eight days after
the publication of the notice of initiation is not unreasonable. Accordingly, Japan has not
demonstrated that the notification was not "immediate".
7.13.2.2.2 Japan's claim under Article 12.1(b)
7.328. Japan asserts that by notifying the Committee on Safeguards of the Final Findings for the
safeguard investigation six days after their publication in The Gazette of India, India failed to comply
with the requirement of "immediate" notification.494
7.329. India responds that it notified its findings of serious injury or threat thereof caused by the
increased imports to the Committee on Safeguards within six days (four working days) from the
date in which the decision was published in The Gazette of India.495 India has referred to the internal
administrative process by which the findings of serious injury or threat thereof are notified to the
Committee on Safeguards .496 In India's view, there was no undue delay in keeping the Members
informed of its findings of serious inj ury. India submits that this was an immediate notification in
the sense of Article 12.1 of the Agreement on Safeguards and that it therefore acted consistently
with its obligations under this provision.497
7.330. As noted, the parties do not disagree on the relevant facts. The Final Findings of the Indian
competent authority for the safeguard investigation were published in The Gazette of India on
15 March 2016 and the Committee on Safeguards was notified on 21 March 2016. Accordingly,
India's notification to the Committee on Safeguards of the findings of serious injury or threat thereof
occurred six calendar days after the relevant triggering event (the publication of the findings in The
Gazette of India).
7.331. The notification that India filed is a four-page document, which contains (i) information on
whether there is an absolute increase in imports (including information on the share of imports
relative to production) ; (ii) information on serious injury or threat thereof caused by increased
imports; (iii) information o n the evidence of serious injury (including information on the market
share, production, the change in level of domestic sales, capacity utilization, profits and losses,
employment and productivity, inventories, and unforeseen developments) ; (iv) information on an
adjustment plan; (v) information on the product involved; (vi) description of the proposed measure;
(vii) further information; and (viii) proposed date of imposition of the safeguard measure. The same
document also contains a notification pursuant to Article 9, footnote 2, of the Agreement on
Safeguards.498 The information is extracted from the Final Findings for the safeguard investigation
which was published in English in The Gazette of India. The notification, however, does not merely
reproduce the Final Findings. We also note India 's explanation as to the administrative steps that
must be completed before a notification is filed.
7.332. Finally, we keep in mind that, in previous cases, the respective panels found the following
periods between a determination of serious injury and the notification to the Committee on
Safeguards under Article 12.1(b) not to have been "immediate" (i) a 40-day period by the panel on

492 Panel Report, US – Wheat Gluten, para. 8.197. This finding was upheld by the Appellate Body.
(Appellate Body Report, US – Wheat Gluten, para. 112).
493 Panel Report, Ukraine – Passenger Cars, para. 7.476.
494 Japan's first written submission, paras. 457-459; second written submission, para. 255.
495 India's first written submission, para. 324.
496 India's response to Panel question No. 129. India's response refers to the internal procedures and
steps that are adopted to notify to the Committee on Safeguards the final decision to apply a safeguard
measure. (See Japan's comments on India's response to Panel question No. 129). There is no reason to
assume, however, that those steps differ considerably when notifying findings of serious injury or threat
thereof caused by increased imports.
497 India's first written submission, paras. 323-324 and 326.
498 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12).

Korea – Dairy499, (ii) a 26 -day period by the panel o n US – Wheat Gluten500, and (iii) a period of
more than 10 months by the panel on Ukraine – Passenger Cars.501
7.333. Having considered the above, and although we are aware that the amount of time to prepare
and submit a notification must be kept to a minimum, we find that the notification under
Article 12.1(b) of the Agreement on Safeguards of the findings of serious injury six calendar days
after the publication of those findings is not unreasonable. Accordingly, Japan has not demonstrated
that the notification was not "immediate".
7.13.2.2.3 Japan's claim under Article 12.1(c)
7.334. Japan asserts that by notifying the Committee on Safeguards of the decision to apply a
definitive safeguard measure six days after its publication in The Gazette of India , India failed to
comply with the requirement of "immediate" notification.502
7.335. India responds that it notified its definitive safeguard measure to the Committee on
Safeguards within six days (four working days) from the date in which the decision was published in
The Gazette of India. 503 India has referred to the internal administrative process by which the
decision to apply a safeguard measure is notified to the Committee on Safeguards.504 In India's view,
there was no undue delay in keeping the Members informed of its decision to apply a safeguard
measure. India submits that this was an immediate notification in the sense of Article 12.1 of the
Agreement on Safeguards and that it therefore acted consistently with its obligations under this
provision.505
7.336. As noted, the parties do not disagree on the relevant facts. The decision to apply a definitive
safeguard measure was published in The Gazette of India on 29 March 2016 and the Committee on
Safeguards was notified on 4 April 2016. Accordingly, India 's notification to the Committee on
Safeguards of the decision to apply a safeguard measure occurred six calendar days after the
relevant triggering event (the publication of the findings in The Gazette of India).
7.337. The notification that India filed is a relatively short document (one and a half pages), which
contains (i) the classification of the product under consideration, (ii) a description of the safeguard
measure imposed, (iii) the date of introduction of the measure , (iv) the duration of the measure ,
and (v) further information (the website where the text of the decision can be accessed). 506 The
information is extracted from the notification on the imposition of a definitive safeguard measure
which was published in English in The Gazette of India . The n otification to the Committee on
Safeguards, however, does not merely reproduce the notice published in The Gazette of India. We
also note India 's explanation as to the administrative steps that must be completed before a
notification is filed.
7.338. Finally, in a previous case, a 23 -day period between the decision to apply a safeguard
measure and the notification to the Committee on Safeguards under Article 12.1(c) was found by
the panel on Korea – Dairy not to have been "immediate".507 In contrast, t he Appellate B ody in
US – Wheat Gluten found that a notification to the Committee on Safeguards made by the
United States five days after having taken the decision to apply the safeguard measure (and one
day after the decision had been published in the US Federal Regist er) was not inconsistent with
Article 12.1(c).508 The panel on Ukraine – Passenger Cars also found that a notification to the

500 Panel Report, US – Wheat Gluten, para. 8.199. This finding was upheld by the Appellate Body.
(Appellate Body Report, US – Wheat Gluten, para. 116).
501 Panel Report, Ukraine – Passenger Cars, para. 7.494.
502 Japan's first written submission, paras. 460-461; second written submission, paras. 253-255.
503 India's first written submission, para. 325.
504 India's response to Panel question No. 129.
505 India's first written submission, paras. 323 and 325-326.
506 Notification under Article 12.1(b) and Article 12.1(c) of the SA (4 April 2016),
(Exhibits JPN-14/IND-14).
508 Appellate Body Report, US – Wheat Gluten, paras. 128-130.

Committee on Safeguards that Ukraine made seven days after having taken the decision to apply
the safeguard measure was not inconsistent with Article 12.1(c) of the Agreement on Safeguards.509
7.339. Having considered the above, and although we are aware that the amount of time to prepare
and submit a notification must be kept to a minimum, we find that the notification under
Article 12.1(c) of the Agreement on Safeguards of the decision to apply a definitive safeguard
measure six calendar days after the publication of that decision is not unreasonable. Acc ordingly,
Japan has not demonstrated that the notification was not "immediate".
7.13.2.3 Conclusion
7.340. For the reasons explained above, we conclude that Japan has failed to demonstrate that
India acted inconsistently with Articles 12.1(a), (b) and (c) of the Agreement on Safeguards by
failing to immediately notify the Committee on Safeguards , respectively, of the initiation of a
safeguard investigation relating to serious injury or threat thereof , the findings of serious injury in
the investigation, and the decision to apply a definitive safeguard measure.
7.13.3 Japan's claim under Article 12.2 of the Agreement on Safeguards
7.13.3.1 Introduction
7.341. Japan claims that India acted inconsistently with Article 12.2 of the Agreement on
Safeguards, because in making the notifications pursuant to Articles 12.1(b) and 12.1(c), it failed to
provide the WTO Committee on Safeguards with "all pertinent information" . According to Japan,
India's notification of 21 March 2016 does not contain the following information ( i) information on
the causal link between the increased imports and the serious injury or threat thereof, (ii) a precise
description of the product involved, (iii) a precise description of the scope of the proposed measure,
and (iv) the proposed date of introduction of the proposed measure.510
7.342. With respect to causation, Japan argues that in section 2 of its notification, entitled "serious
injury or threat thereof caused by increased imports"511, India only explained the injury suffered by
the domestic industry in general and the amount of increase in imports but not the causal link
between the increased imports and the serious injury or threat thereof.512
7.343. With respect to the description of the product involved, Japan argues that, by failing to
identify in its notification t he product types excluded from the general definition of the "product
under consideration", India failed to provide a precise description of the product involved. Japan
notes that , in section 5 of its notification, India describes the product under conside ration as
follows: "[h]ot-rolled flat products of non-alloy and other alloy steel in coils of a width of 600 mm or
more … classified under Chapter 72 of the Customs Tariff Act, 1975 under tariff heading 7208 and
tariff item 72253090".513 In Japan's view, this description does not reflect the product exclusion as
listed in paragraph 2 of the Final Findings, at least with respect to American Petroleum Institute (API)
grade steel.514
7.344. Japan also argues that India failed to provide a precise description of the scope of the
proposed measure. Japan states that section 6 of India's notification, entitled "Precise description of
the proposed measure ", only indicates that the Indian competent authority recommended the
imposition of a "safeguard duty at the rate of 20% ad valorem for the first year, 18% ad valorem
for the second year (for first 6 -months), 15% ad valorem for second year (for next 6 -months)
and 10% ad valorem for third year (for 6 -months)" on the products concerned. 515 According to

509 Panel Report, Ukraine – Passenger Cars, para. 7.502.
510 Japan's first written submission, paras. 462 and 469; second written submission, para. 256.
511 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12).
512 Japan's first written submission, para. 470; second written submission, para. 258; response to Panel
question No. 131, paras. 79-80; and comments on India's responses to Panel question Nos. 130 and 131,
paras. 84-88.
513 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12), p. 4.
514 Japan's first written submission, paras. 471-473; second written submission, para. 259; and
response to Panel question No. 132, paras. 81-82.
515 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12), p. 4.

Japan, the notification did not mention that any anti-dumping duty paid would be deducted from the
safeguard duty rates listed or that the safeguard duty should not be imposed on the subject goods
imported at or above the Minimum Import Price set out in Not ification No. 38/2015-2020 o f
5 February 2016. In Japan's view, these elements determine the scope of the proposed measure.516
7.345. Finally, Japan argues that India failed to notify the "proposed date of introduction " of the
proposed measure. Japan states that section 8 of India 's notification, entitled "proposed date of
imposition of safeguard measure ", only indicates that "[t]he 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".517 According to Japan, this does not amount to the identification of
the proposed date of introduction of the safeguard measure as the notification does not identify any
date.518
7.346. In response, India submits that its notification to the WTO Committee o n Safeguards of
21 March 2016 fully complied with the requirements under Article 12.2 of the Agreement on
Safeguards.519 India argues that section 2 of its notification specifically deals with the serious injury
or threat thereof caused by "increased imports".520 In India's view, Article 12 does not require that
a Member include in the notification any information with respect to the existence of a causal link
between increased imports and the serious injury, nor with respect to non-attribution.521
7.347. India also argues that, although its notification does not detail the exclusions from the
product under consideration, this does not imply that the precise description of the product involved
was not provided. In India's view, the description required unde r Article 12.2 refers only to the
"product under consideration", which India detailed, while the exclusions are only as regards what
was not included in the " product under consideration ".522 India adds that the requirement in
Article 12.2 to provide the description of the product is to ensure that the exporting Member's right
to defend itself is not hampered. According to India , when there are exclusions in the product
covered by the investigation, no such right gets affected.523
7.348. India argues further that Article 12.2 only requires a description of the proposed measure ,
which was included in section 6 of its notification, and not of the manner of operation of the proposed
measure. In India's view, the fact that any anti -dumping duty paid would be deducted from the
safeguard duty rates listed , and that the safeguard duty should not be imposed on subject goods
which were imported at or above the Minimum Import Price set out in Notification No. 38/2015-2020
of 5 February 2016, refer to the manner of operation of the measure and not to the description of
the proposed measure.524 India adds that the precise description of the applied measure, which was
less burdensome than the proposed measure, was contained in the Department of
Revenue's Notification No. 1/2016-Customs (SG), dated 29 March 2016, which India notified on
4 April 2016.525
7.349. India additionally argues that its notification clearly indicates that the measure would be
applicable from the date of notification by the Department of Revenue, Government of India, which
corresponds to the identification of the "proposed date of introduction of the proposed measure".526
India submits that its notification, not only satisfies the requirements of Article 12.2, but also informs
all interested Members where any further information would be available.527 India adds that, under

516 Japan's first written submission, paras. 474-476; second written submission, para. 260; and
comments on India's response to Panel question No. 133, paras. 89-91.
517 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12), p. 4.
518 Japan's first written submission, paras. 477-478; second written submission, para. 261; response to
Panel question No. 134, paras. 83-86; and comments on India's response to Panel question No. 134,
paras. 92-93.
519 India's first written submission, paras. 327-328.
520 India's first written submission, paras. 329-330; response to Panel question No. 130.
521 India's responses to Panel question Nos. 130 and 131; comments on Japan's response to Panel
question No. 131, paras. 63-64.
522 India's first written submission, para. 331.
523 India's comments on Japan's response to Panel question No. 132, paras. 65-66.
524 India's first written submission, para. 332.
525 India's response to Panel question No. 133 (referring to Notification under Articles 12.1(b)
and 12.1(c) of the SA (4 April 2016), (Exhibit IND-14)).
526 India's first written submission, para. 333.
527 India's first written submission, para. 334.

Article 12.2, the notifying Member has the flexibility to introduce the safeguard measure in
accordance with its domestic procedures and laws and there is no requirement to provide a precise
date of introduction.528
7.350. The parties do not disagree on the basic relevant facts.
7.351. On 21 March 2016, India notified the Committee on Safeguards of its finding of serious injury
or threat thereof caused by increased imports and of the measure it had proposed to impose
pursuant to Article 12.1(b) and Article 9, footnote 2, of the Agreement on Safeguards.529
7.352. On 29 March 2016, the Department of Revenue 's Notification No. 1/2016-Customs (SG),
whereby a definitive safeguard measure was imposed, was published in The Gazette of India.530 On
4 April 2016, India notified the Committee on Safeguards, pursuant to Article 12.1(c) of the
Agreement on Safeguards, of its decision to impose a measure.531
7.13.3.2 Evaluation by the Panel
7.353. Article 12.2 of the Agreement on Safeguards provides in relevant part that:
In making the notifications referred to in paragraphs 1(b) and 1(c), the Member
proposing to apply or extend a safeguard measure shall provide the Committee on
Safeguards with all pertinent information, which shall include evidence of serious injury
or threat thereof caused by increased imports, precise description of the product
involved and the proposed measure, proposed date of introduction, expected duration
and timetable for progressive liberalization.
7.354. As noted above, the parties do not disagree on the basic relevant facts. India notified the
Committee on Safeguards of its findings of serious injury or threat thereof and of its proposed
measure on 21 March 2016 pursuant to Article 12.1(b) of the Agreement on Safeguards . The
notification that India filed is a four-page document, which contains sections on (i) information on
whether there is an absolute increase in imports (including information on the share of imports
relative to production) ; (ii) information on serious injury or threat thereo f caused by increased
imports (including information on serious injury and on threat of serious injury); (iii) information on
the evidence of serious injury (including information on the market share, production, the change in
level of domestic sales , capacity utilization , profits and losses , employment and productivity ,
inventories, and unforeseen developments); (iv) information on an adjustment plan; (v) information
on the product involved ; (vi) description of the proposed measure , including a timetable f or its
progressive liberalization; (vii) further information with respect to the date of publication of the Final
Findings in The Gazette of India; and (viii) proposed date of imposition of the safeguard measure.532
7.355. On 4 April 2016, India notified its decision to impose a measure to the Committee on
Safeguards, pursuant to Articles 12.1(b) and 12.1(c) of the Agreement on Safeguards . The
notification that India filed is a two -page document, which contains sections on (i) product
classification, (ii) the safeguard measure imposed, including a timetable for its
progressive liberalization, (iii) the date of introduction of the measure , (iv) the duration of the
measure, and (v) further information on where the Department of Revenue 's Notification
No. 1/2016-Customs (SG), dated 29 March 2016, whereby the definitive safeguard measure was
imposed, may be accessed.533
7.356. In a statement supported by the Appellate Body, the panel in Korea – Dairy noted that the
notification in Article 12 serves essentially a transparency and information purpose:
In ensuring transparency, Article 12 allows Members through the Committee on
Safeguards to review the measures. Another purpose of the notification of the finding

528 India's response to Panel question No. 134.
529 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12).
530 Notification imposing a definitive safeguard measure, (Exhibits JPN-13/IND-13), pp. 6-7.
531 Notification under Articles 12.1(b) and 12.1(c) of the SA (4 April 2016), (Exhibits JPN-14/IND-14).
532 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12).
533 Notification under Articles 12.1(b) and 12.1(c) of the SA (4 April 2016), (Exhibits JPN-14/IND-14).

of serious injury and of the proposed measure is to inform Memb ers of the
circumstances of the case and the conclusions of the investigation together with the
importing country's particular intentions. This allows any interested Member to decide
whether to request consultations with the importing country which may lea d to
modification of the proposed measure(s) and/or compensation.534
7.357. In the same case, regarding the object and purpose of the noti fication requirements in
Article 12, the Appellate Body added:
We believe that the purpose of notification is better served if it includes all the elements
of information specified in Articles 12.2 and 4.2. In this way, exporting Members with a
substantial interest in the product subject to a safeguard measure will be in a better
position to engage in meaningful consultations, as envisaged by Article 12.3, than they
would otherwise be if the notification did not include all such elements. And, the
Committee on Safeguards can more effectively carry out its surveillance function set
out in Article 13 of the Agreement on Safeguards . At the same time, providing the
requisite information to the Committee on Safeguards does not place an excessive
burden on a Member proposing to apply a safeguard measure as such information is, or
should be, readily available to it.535
7.358. With respect to causation, Japan argues that India failed to provide pertinent information on
the causal link between the increased imports and the serious injury or threat thereof. Sections 2
and 3 of India's notification of 21 March 2016 are entitled respectively "S erious injury or threat
thereof caused by increased imports" and "Evidence of serious injury". In the relevant part, section 2
states that:
Evidence of serious injury has been analysed & explained in subsequent paragraphs. It
is thus concluded that [the domestic industry] has suffered serious injury and increased
imports of the product under consideration threaten to cause serious injury to the
[domestic industry].536
7.359. Section 3 of the 21 March notification, entitled "Evidence of serious injury", also states that
"[t]he increased imports of [the product under consideration] into India have caused serious injury
to the domestic producers as reflected by the following parameters …".537
7.360. Article 12.2 p rovides in its relevant part that, i n making the notifications referred to in
Articles 12.1 (b) and (c), the notifying Member shall provide the Committee on Safeguards with all
pertinent information, which shall include evidence of serious injury or threat thereof caused by
increased imports. In this respect, the Appellate Body noted in Korea – Dairy that:
To comply with the requirements of Article 12.2, the notifications pursuant to
paragraphs 1(b) and 1(c) of Article 12 must, at a minimum , address all the items
specified in Article 12.2 as constituting "all pertinent information", as well as the factors
listed in Article 4.2 that are required to be evaluated in a safeguards investigation.538
7.361. The factors that Article 4.2 of the Agreement on Safeguards requires competent authorities
to evaluate in an investigation to determine whether increased imports have caused or are
threatening to cause serious injury to a domestic industry are all relevant factors of an objective and
quantifiable nature that have a bearing on the situation of that industry . The provision lists in
particular the following (i) the rate and amount of the increase in imports of the product concerned
in absolute and relative terms, (ii) the share of the domestic market taken by the increased imports,

534 Panel Report, Korea – Dairy, para. 7.126 (fn omitted). See also Appellate Body Report, Korea –
Dairy, para. 111.
535 Appellate Body Report, Korea – Dairy, para. 111.
536 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12), section 2,
p. 2.
537 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12), section 3,
p. 2.
538 Appellate Body Report, Korea – Dairy, para. 109. (emphasis original)

(iii) changes in the level of sales , (iv) production, (v) productivity, (vi) capacity utilization ,
(vii) profits and losses, and (viii) employment.
7.362. Article 4.2(b) also provides that a competent authority may not reach a determination that
increased imports have caused or are threatening to cause serious injury to a domestic industry
unless (i) the investigation demonstrates, on the basis of objective evidence, the existence of the
causal link between increased imports of the product concerned and the serious injury or threat
thereof; and (ii) when factors other than increased imports are causing injury to the domestic
industry at the same time, the injury has not been attributed to increased imports.
7.363. We note that India's notification of 21 Mar ch 2016 explicitly refers to the competent
authority's determination that the domestic industry suffered serious injury caused by i ncreased
imports of the product under consideration into India, and that increased imports of the product
under consideration also threatened to cause serious injury to the domestic industry. We consider
that the information contained in this notification fulfils the requirement in Article 12.2 with respect
to providing all pertinent information regarding the evidence of serious injury or threat ther eof
caused by increased imports. A Member who makes a notification under Articles 12.1 (b) and (c)
may provide the Committee on Safeguards with pertinent information with respect to the
determination of the existence of a causal link between increased imports of the product concerned
and serious injury or threat thereof and with respect to a non-attribution analysis. We find nothing
in Article 12.2, however, that requires such information to be provided in a notification to the
Committee on Safeguards under Articles 12.1 (b) and (c).
7.364. With respect to the description of the product involved , Japan argues that India failed to
identify the products excluded from the general definition of the "product under consideration" , at
least with respect to API grade steel.
7.365. Section 5 of India's notification of 21 March 2016 is entitled "Product Involved" and notes:
The Product Under Consideration (PUC) is "Hot-rolled flat products of non -alloy and
other alloy steel in coils of a width of 600 mm or more" and is classified under
Chapter 72 of the Customs Tariff Act, 1975 under tari ff heading 7208 and tariff
item 72253090.539
7.366. However, API grade steel was excluded from the scope of the product under consideration
from the beginning of the investigation. 540 The Final Findings explicitly note that API grade steel is
"not included in the scope of the product under consideration".541
7.367. The precise description of the product involved is among the pertinent information that
Members must provide in making a notification to the Committee on Safeguards under
Articles 12.1 (b) and (c). This involves not only identifying the product at issue, but also the specific
sub-products that are excluded from the definition of the product concerned. By not indicating the
products tha t were excluded from the scope of the investigation, India failed to provide the
Committee on Safeguards with a precise description of the product involved.
7.368. With respect to the description of the proposed measure , Japan argues that India failed to
mention that any anti-dumping duty paid would be deducted from the safeguard duty rates listed
and that the safeguard duty would not be imposed on the subject goods imported at or above the
Minimum Import Price approved in February 2016.
7.369. Section 6 of India's notification of 21 March 2016 is entitled "Precise Description of the
Proposed Measure" and states:
DG Safeguards, the competent authority, has recommended to impose safeguard duty
at the rate of 20% ad valorem for the first year, 18% ad valorem for the second year
(for first 6-months), 15% ad valorem for second year (for next 6-months) and 10% ad

539 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12), section 5,
p. 4. (emphasis added)
540 Notice of Initiation, (Exhibits JPN-4/IND-4), para. 3, p. 6.
541 Final Findings, (Exhibits JPN-11/IND-11), para. 2, p. 119.

valorem for third year (for 6-months) on imports of Hot-rolled flat products of
non-alloy and other alloy steel in coils of a width of 600 mm or more.542
7.370. The 21 March notification at issue does not mention that anti -dumping duties would be
deducted from the safeguard duty rates. In contrast, the Final Findings of the Indian competent
authority explicitly state that for each of the periods, the corresponding safeguard du ty
recommended would be "minus Anti-dumping duty, if any".543
7.371. The 21 March notification also fails to mention anything about subject goods imported at or
above Minimum Import Prices. The fact that the proposed safeguard duties should not be imposed
on subject goods imported at or above Minimum Import Prices is not mentioned in the Final Findings
of the Indian competent authority either. Accordingly, this particular aspect does not seem to be
part of the measure as recommended in the Final Findings. The notifi cation of the definitive
safeguard measure, however, does mention that:
The safeguard duty shall not be imposed on the subject goods which are imported at or
above the Minimum Import Price in terms of the notification of the Government of India
in the Mini stry of Commerce and Industry (Department of Commerce) (Directorate
General of Foreign Trade) No. 38/2015-2020, dated the 5 th February, 2016 published
in the Gazette of India (Extraordinary), Part II, Sectio n 3, Sub-section (ii) vide S.O .
391(E) dated the 5th February, 2016.544
7.372. Article 12.2 requires a Member proposing to apply a safeguard measure to provide the
Committee on Safeguards with all pertinent information, including at a minimum the items listed in
the provision. As noted above, the panel in Korea – Dairy referred to the role that notifications under
Article 12 play in informing Members of the circumstances of the case . This allows any interested
Member to decide whether to request consultations with the importing country that may lead to
modification of the proposed measures or compensation.545 As noted by Article 12.1, notifications to
the Committee on Safeguards must be made immediately upon making a finding of serious injury
or threat thereof caused by increased imports or upon taking a decision to apply a safeguard
measure. Notifications must at the same time be complete, in the sense of providing all the pertinent
information required by Article 12.2, and timely, to allow interested Members adequate opportunity
to engage in consultations to review the information provided, to exchange views on the measure,
and to exercise their rights under the Agreement on Safeguards.
7.373. As noted above, the fact that anti-dumping duties should be deducted from the respective
safeguard duties is included in the proposed measure as described in the 15 March Final Findings of
the Indian competent authority. This aspect should in our view be part of the precise description of
the proposed measure, as it would affect the manner in which the safeguard measure would apply
to different imports of the product at issue.
7.374. In contrast, there is no evidence that the measure as proposed in the Final Findings of the
Indian competent authority contemplated that the safeguard duties sh ould not be imposed on
subject goods imported at or above the set Minimum Import Prices. The first mention on record to
the exclusion of safeguard duties from goods imported at or above Minimum Import Prices is
contained in the Ministry of Finance 's notification imposing a definit ive safeguard measure, dated
29 March 2016. Accordingly, it does not seem unreasonable to us that India's notification of
21 March 2016 did not include a mention to this aspect. Indeed, the desirability of a detailed
notification that provides as much information as possible must be balanced against the requirement
for a timely notification that, while providing all pertinent information required by Article 12.2, allows
interested Members adequate opportunity to exercise their rights under the Agreement on
Safeguards.

542 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12), section 6,
p. 4. (emphasis original)
543 Final Findings, (Exhibits JPN-11/IND-11), section R(a), p. 209.
544 Notification imposing a definitive safeguard measure, (Exhibits JPN-13/IND-13), para. 2, pp. 6-7.
545 Panel Report, Korea – Dairy, para. 7.126; Appellate Body Report, Korea – Dairy, para. 111.

7.375. Accordingly, we consider that, by not indicating that any anti-dumping duties would be
deducted from the safeguard duties imposed, India failed to provide the Committee on Safeguards
with a precise description of the proposed measure.
7.376. With respect to the proposed date of introduction of the measure , Japan argues that India
failed to identify a precise date, by indicating only that the safeguard measure would be applicable
from the date of issue of the respective notification by the Department of Rev enue, Ministry of
Finance.
7.377. Section 8 of India's notification of 21 March 2016 is entitled "Proposed date of Imposition of
Safeguard Measure" and states:
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.546
7.378. A "date" can be defined as "[t]he day of the month; the day of the month, the month, or
the year of an event; the time or period at which something happened or the time at which
something is to happen".547 On its face, the notification does not identify a date, expressed in terms
of a day of the month, the month and the year, from which the safeguard measure would apply. It
does, however, refer to an event, namely the date of issuance of the respective notification by the
Department of Revenue of India's Ministry of Finance.
7.379. Article 12.2 of the Agreement on Safeguards requires the Member making a notification to
the Committee on Safeguards under Articles 12.1 (b) and (c) to provide all pertinent information,
including the proposed date of introduction of the proposed safeguard measure. In our view, it would
be desirable that a notification provide the date of introduction of the measure in a manner as precise
as possible. In some cases, however, it may not be possible to identify the precise day of the month,
the month, and the year, in which the measure will be introduced, as the introduction of the measure
may depend on some condition, such as a notification, a publication in an official journal, or even an
approval by some other authority. In these cases, the date of introduction of the proposed safeguard
measure may be expressed with reference to the act or event that must occur for the measure to
enter into effect. Here too the desirability of a more precise date, which may only become known
once the Department of Revenue adopts the final decision , must be balanced against the
requirement for a timely notification that allows interested Members adequate opportunity to
exercise their rights under the Agreement on Safeguards.
7.380. In any event, we note that, in contrast with the description of the product involved and of
the proposed measure, Article 12.2 does not require a precise date of introduction . We are
unconvinced that by referring to the date of issu ance of the notification by the Department of
Revenue of India 's Ministry of Finance, India failed to provide the Committee on Safeguards a
proposed date of introduction of the proposed measure.
7.13.3.3 Conclusion
7.381. For the reasons explained above, we conclude that India acted inconsistently with
Article 12.2 of the Agreement on Safeguards by failing to provide the Committee on Safeguards with
(i) a precise description of the product involved , and (ii) a precise description of the proposed
measure. We also conclude that Japan has failed to demonstrate that India acted inconsistently with
Article 12.2 by failing to provide the Committee on Safeguards with pertinent information with
respect to (i) the determination of the existence of a causal link between increased imports of the
product concerned and serious injury or threat thereof and with respect to a non-attribution analysis;
and (ii) a proposed date of introduction of the proposed measure.

546 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12), section 8,
p. 4.
547 Shorter Oxford English Dictionary, 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007),
Vol. 1, p. 607.

7.13.4 Japan's claim under Article 12.3 of the Agreement on Safeguards and Article XIX:2
of the GATT 1994
7.13.4.1 Introduction
7.382. Japan claims that India acted inconsistently with Article 12.3 of the Agreement on
Safeguards and Article XIX:2 of the GATT 1994. In Japan's view, in its notification to the Committee
on Safeguards made on 21 March 2016, India failed to provide Japan with an opportunity for prior
consultations in respect of the proposed measure, and in particular with sufficient time and sufficient
information to allow for the possibility for a meaningful exchange of views.548
7.383. Japan argues that India failed to provide any opportunity for prior consultations since in its
21 March notification it did not indicate the proposed date of introduction of the measure , which
made it impossible for Japan to organize itself with a view to have consultations with India with
regard to the safeguard measure at issue.549
7.384. Japan also argues that India failed to provide Japan with an adequate opportunity for
consultations since it failed to provide exporting Members wi th sufficient time and sufficient
information to allow for the possibility for a meaningful exchange on the issues identified. 550 In
Japan's view, India failed to provide Japan with sufficient time to allow for a meaningful exchange
of views, because: (i) India notified the Committee on Safeguards eight days before the application
of the safeguard measure , which did not provide Japan enough time to prepare itself for
consultations with India; and (ii) Japan could not anticipate that the measure would be int roduced
so soon after the 21 March notification since India did not indicate the proposed date of introduction
of the measure.551 Japan also states that India failed to provide Japan with sufficient information to
allow for the possibility of meaningful prio r consultations, because it did not provide all pertinent
information required by Article 12.2.552
7.385. In response, India submits that it has complied with the requirements in Article 12.3 of the
Agreement on Safeguards and Article XIX:2 of the GATT 1994. According to India, its notification to
the Committee on Safeguards made on 21 March 2016 provided all "pertinent information " as
required by Article 12.2. India also argues that the notification provided Japan an eight-day advance
period for consultations.553
7.386. The parties do not disagree on the relevant facts.
7.387. The Final Findings of the Indian competent authority for the safeguard investigation were
published in The Gazette of India on 15 March 2016. 554 On 21 March 2016, India notified the
Committee on Safeguards of the findings of serious injury or threat thereof caused by increased
imports pursuant to Article 12.1(b) of the Agreement on Safeguards.555
7.388. On 29 March 2016, Notification No. 1/2016 from Customs, whereby the definitive safeguard
measure was imposed, was published in The Gazette of India.556
7.389. In other words, India notified the Committee on Safeguards of the proposed measure eight
days before the safeguard measure entered in force.
7.390. The relevant facts with respect to the content of India 's notification to the Committee on
Safeguards of 21 March 2016 have been discussed in the preceding section.

548 Japan's first written submission, paras. 480 and 492-502; second written submission,
paras. 263-266.
549 Japan's first written submission, para. 496.
550 Japan's first written submission, para. 497.
551 Japan's first written submission, paras. 498-499; second written submission, para. 265; and
responses to Panel question No. 135, para. 87-89, and No. 136, paras. 90-91.
552 Japan's first written submission, paras. 500-501; second written submission, paras. 263-264.
553 India's first written submission, para. 335.
554 Final Findings, (Exhibits JPN-11/IND-11).
555 Notification under Article 12.1(b) of the SA (21 March 2016), (Exhibits JPN-12/IND-12).
556 Notification imposing a definitive safeguard measure, (Exhibits JPN-13/IND-13), pp. 6-7.

7.13.4.2 Evaluation by the Panel
7.391. Article 12.3 of the Agreement on Safeguards provides that:
A Member proposing to apply or extend a safeguard measure shall provide adequate
opportunity for prior consultations with those Members having a substantial interest as
exporters of the product concerned, with a view to, inter alia, reviewing the information
provided under paragraph 2, exchanging views on the measure and reaching an
understanding on ways to achieve the objective set out in paragraph 1 of Article 8.
7.392. In turn, Article XIX:2 of the GATT 1994 in relevant part reads as follows:
Before any [Member] shall take action pursuant to the provisions of paragraph 1 of this
Article, it shall give notice in writing to the [Members acting jointly] as far in advance
as may be practicable and shall afford the [Members acting jointly] and those
[Members] having a substantial interest as exporters of the product concerned an
opportunity to consult with it in respect of the proposed action.
7.393. As noted by the Appellate Body in US – Wheat Gluten, Article 12.3 of the Agreement on
Safeguards requires a Member proposing to apply a safeguard measure to provide exporting
Members with sufficient information and time to allow for the possibility, through consultations, for
a meaningful exchange on the issues identified. Accordingly, Article 12.3 requires that information
on a proposed measure be provided in advance of the consultations, so that the consultations can
adequately address that measure. In turn, Article 12.2 identifies the information that is needed to
enable meaningful consultations to occur under Article 12.3.557
7.394. The Panel has already found that, in its notification made on 21 March 2016, India failed to
provide the Committee on Safeguards with a precise description of the product involved and a precise
description of the proposed measure . To the extent that India failed to provide all pertinent
information as required by Article 12.2 of the Agreement on Safeguards with respect to such aspects,
India also failed to provide information that was needed to enable meaningful consultations to occur
under Article 12.3.
7.13.4.3 Conclusion
7.395. For the reasons explained above, we conclude that India acted inconsistently with
Article 12.3 of the Agreement on Safeguards by failing to provide Japan, and other Members with a
substantial export interest in the product subject to the proposed safeguard measure, with adequate
opportunity for prior consultations with a view to reviewing all pertinent information within the
meaning of Article 12.2, which includes a precise description of the product involved and a precise
description of the proposed measure.
7.14 Whether India acted inconsistently with Article II:1(b) of the GATT 1994
7.14.1 Introduction
7.396. Japan claims that India acted inconsistently with Article II:1(b) of the GATT 1994 because,
through the measure at issue, it imposed "other duties or charges" in terms of the second sentence
of Article II:1(b).558
7.397. Japan argues that the duties resulting from the safeguard measure at issue constitute "other
duties or charges" within the meaning of the second sentence of Article II:1(b) of the GATT 1994,
rather than "ordinary customs duties" under the first sentence, because they are of an "exceptional"
or "extraordinary" nature and applied for a limited period of time in addition to the M FN applied
tariff.559 Japan also submits that these duties are not recorded in India's Schedule of Concessions in

557 Appellate Body Report, US – Wheat Gluten, paras. 136-137.
558 Japan's first written submission, para. 503.
559 Japan's first written submission, paras. 512-519 (referring to Panel Report, Dominican Republic –
Safeguard Measures, paras. 7.86-7.87); second written submission, para. 269.

the column "other duties or charges" and they do not correspond to duties or charges that India
applied at the date of entry into force of the GATT 1994 or was required to apply as a direct and
mandatory consequence of legislation in force on that date, and therefore the duties resulting from
the safeguard measure at issue are inconsistent with Article II:1(b) of the GATT 1994.560
7.398. India replies that the measure at issue was imposed in accordance with Article XIX of the
GATT 1994, and therefore the obligation under Article II:1(b) ipso facto gets suspended and the
question of its violation does not arise.561 India also disagrees with Japan that under Article II:1(b)
the measure should have been recorded in India 's Schedule of Concessions in the column "other
duties or charges".562
7.14.2 Article II:1(b) of the GATT 1994
7.399. We recall that Article II:1(b) of the GATT 1994 provides as follows:
The products described in Part I of the Schedule relating to any [Member], which are
the products of te rritories of other [Members], shall, on their importation into the
territory to which the Schedule relates, and subject to the terms, conditions or
qualifications set forth in that Schedule, be exempt from ordinary customs duties in
excess of those set forth and provided therein. Such products shall also be exempt from
all other duties or charges of any kind imposed on or in connection with the importation
in excess of those imposed on the date of this Agreement or those directly and
mandatorily required to be imposed thereafter by le gislation in force in the importing
territory on that date.
7.400. The Understanding on the Interpretation of Article II:1(b) of the GATT 1994 provides that:
1. In order to ensure transparency of the legal rights and obligations deriving from
paragraph 1(b) of Article II, the nature and level of any "other duties or charges" levied
on bound tariff items, as referred to in that provision, shall be recorded in the Schedules
of concessions annexed to GATT 1994 against the tariff item to which they apply. It is
understood that such recording does not change the legal character of "other duties or
charges".
2. The date as of which "other duties or charges" are bound, for the purposes
of Article II, shall be 15 April 1994. "Other duties or charges" shall therefore be
recorded in the Schedules at the levels applying on this date …
3. "Other duties or charges" shall be recorded in respect of all tariff bindings.
…
7. "Other duties or c harges" omitted from a Schedule at the time of deposit of the
instrument incorporating the Schedule in question into GATT 1994 with, until the date
of entry into force of the WTO Agreement, the Director -General to the
CONTRACTING PARTIES to GATT 1947 or, thereafter, with the Director -General of the
WTO, shall not subsequently be added to it and any "other duty or charge" recorded at
a level lower than that prevailing on the applicable date shall not be restored to that
level unless such additions or changes are made within six months of the date of deposit
of the instrument.
7.14.3 Evaluation by the Panel
7.401. Japan alleges that India acted inconsistently with the second sentence of Article II:1(b) of
the GATT 1994. This sentence provides that imported goods shall "be exempt from all other duties
or charges of any kind imposed on or in connection with the im portation" if such duties or charges
of any kind exceed those applied on the date of entry into force of the GATT 1994 or "those directly

561 India's first written submission, para. 344.
562 India's first written submission, para. 350.

and mandatorily required to be imposed thereafter by legislation in force in the importing territory
on that date".
7.402. We have already concluded that the safeguard measure at issue resulted in duties levied in
customs on the importation of the products concerned into the territory of India. 563 We have also
concluded that such duties are not part of the measures listed in Article II:2 of the GATT 1994, which
are carved out from the obligations in Article II.564 We have indicated that the duties resulting from
the measure at issue do not constitute " ordinary customs duties " for the purposes of
Article II:1(b).565 Accordingly, the duties resulting from the measure at issue are "other duties or
charges … imposed on or in connection with the importation ", within the meaning of Article II:1(b)
of the GATT 1994.566
7.403. Having found that the measure at issue resulted in "other duties or charges" in the sense of
Article II:1(b) of the GATT 1994, the Panel must consider whether these duties were in excess of
the other duties or charges imposed on the date of the GATT 1994 or "those directly or mandatorily
required to be imposed thereafter by the legislation in force in the importing territory on that date",
as they were recorded in India's Schedule of Concessions. In this connection, we note that pursuant
to paragraphs 1, 2, 3, 4 and 7 of the Understanding on the Interpretation of Article II:1(b) of the
GATT 1994, Members were required to record in their Schedules of Concessions any other duties
and charges applied in respect of all bound tariff lines.
7.404. In this respect, the panel in Dominican Republic – Import and Sale of Cigarettes noted that:
Reading Article II:1(b) together with paragraphs 1, 2, 7 and 4 of the Understanding as
context, the Panel considers that the obligation under Article II:1(b), second sentence
is for Members to record in their Schedules, within six months of the date of dep osit
of the instrument, all ODCs [other duties and charges] as applied on 15 April 1994
unless those levels breach previous bound levels of ODCs. In case any Member did not
record the ODCs in the Schedule within six months of the date of deposit of the sai d
instrument, the right to record it in the Schedule and to invoke it expired after
six months. In the context of the recording requirements as prescribed in the
Understanding, the meaning of Article II:1(b), second sentence is specifically that
imported products shall be exempted from all "other duties or charges" of any kinds in
excess of those as validly recorded in the Schedule of the Member concerned.567
7.405. In other words, a Member that maintains or introduces an "other duty or charge" without
having record ed it in the appropriate column in its Schedule of Concessions act s in a manner
inconsistent with the second sentence of Article II:1(b) of the GATT 1994.
7.406. In the present case, it is a fact undisputed by the parties that the column corresponding to
other duties or charges in India's Schedule of Concessions in relation to the products concerned does
not contain any record. 568 In other words, India did not record in its Schedule of Concessions any
duty corresponding to "other duties or charges" within the six mo nths following the date on which
the instrument was deposited. The Panel recalls its finding that the duties resulting from the measure
at issue form part of other duties or charges and notes that India applied these duties during the
time the safeguard measure was in force. In this respect, therefore, by applying on imports a duty
that constitutes an "other duty or charge", India is acting inconsistently with its obligations under
the second sentence of Article II:1(b) of the GATT 1994.

563 See section 7.4.2 above.
564 See section 7.4.3.1 above.
565 See section 7.4.2 above.
566 See section 7.4.3.1 above.
567 Panel Report, Dominican Republic – Import and Sale of Cigarettes, para. 7.88 (emphasis original;
fn omitted). A similar conclusion was reached by the panel in Chile – Price Band System, para. 7.107.
568 Excerpt from India's Schedule of Concessions with respect to customs heading 7208,
(Exhibit IND-21); India's opening statement at the first meeting of the Panel, para. 44. See also Japan's first
written submission, para. 520; second written submission, para. 270; opening statement at the first meeting of

7.407. As noted above, India has argued that, when a measure is applied under Article XIX of the
GATT 1994, "there can be no question of violation" of Article II:1(b) of the GATT 1994.569
7.408. Although Article XIX of the GATT 1994 allows WTO Members to suspend obligations incurred
by a Member under the GATT 1994, such suspension would only be valid when the safeguard
measure at issue has not been found to be inconsistent with the respective Member's obligations in
Article XIX of the GATT 1994 and the Agreement on Safeguards.
7.409. Since we have already concluded that the measure at issue is inconsistent with
India's obligations under Article XIX of the GATT 1994 and certain provisions of the Agreement on
Safeguards, the measure at issue did not result in a valid suspension of I ndia's obligation under
Article II:1(b), second sentence, of the GATT 1994.
7.14.4 Conclusion
7.410. For the reasons explained above, we conclude that India has acted inconsistently with its
obligations under the second sentence of Article II:1(b) of the GATT 1994.
7.15 Whether India acted inconsistently with Article I:1 of the GATT 1994
7.15.1 Introduction
7.411. Japan claims that India acted inconsistently with Article I:1 of the GATT 1994 when it did
not apply the measure at issue to the products originating in certain countries. According to Japan,
this constitutes an advantage that was not accorded immediately and unconditionally to like products
originating in other WTO Members, including Japan.570
7.412. India responds that Article XIX of the GATT 1994 allows a Member to suspend oblig ations
incurred under the GATT 1994, if the conditions in Article XIX are met. India also notes that, although
the measure at issue does not apply to imports from developing countries (with the exception of
China and Ukraine), Article 9 of the Agreement on Safeguards provides for an exception from the
MFN principle contained in Article I:1 of the GATT 1994.571
7.15.2 Article I:1 of the GATT 1994
7.413. We recall that Article I:1 of the GATT 1994 provides as follows:
With respect to customs duties and charges of any kind imposed on or in connection
with importation or exportation or imposed on the international transfer of payments
for imports or exports, and with respect to the method of levying such duties and
charges, and with respect to all rules and formalities in connection with importation and
exportation, and with respect to all matters referred to in paragraphs 2 and 4 of
Article III,* any advantage, favour, privilege or immunity granted by any [Member] to
any product originating in or destined for any other country shall be accorded
immediately and unconditionally to the like product originating in or destined for the
territories of all other [Members].
7.15.3 Evaluation by the Panel
7.414. Japan alleges that India acted inconsistently with Article I:1 of the GATT 1994. According to
this provision, any advantage granted by a Member to product s from any other country must be
accorded immediately and unconditionally to the like products originating in all other Members.
7.415. The App ellate Body has indicated that the following e lements must be demonstrated to
establish an inconsistency with Article I:1 of the GATT 1994 (i) that the measure at issue falls within
the scope of application of Article I:1; (ii) that the importe d products a t issue are "like" products

569 India's first written submission, para. 337.
570 Japan's first written submission, paras. 531-535; second written submission, paras. 273-275.
571 India's first written submission, paras. 342-343. Japan does not challenge the consistency of the
measure at issue with Article 9 of the Agreement on Safeguards.

within the meaning of Article I:1; (iii) that the measure at issue confers an "advantage, favour,
privilege, or immunity" on a product originating in the territory of any country ; and (iv) that the
advantage so accorded has not been extended "immediately" and "unconditionally" to the "like"
products originating in the territory of all Members. Thus, if a Member grants any advantage to any
product originating in the territory of any other country, such advantage mu st be accorded
"immediately and unconditionally" to like products originating from all other Members.572
7.416. With respect to the first element, we have already concluded that the duties resulting from
the safeguard measure at issue were duties or charges imposed on the importation of products into
the territory of India. Accordingly, they fall within the scope of application of Article I:1.
7.417. With respect to the second element, we have already noted that t he Ministry of Finance
notification of 29 March 2016, which imposed the definitive safeguard measure, provided that:
Nothing contained in this notification shall apply to imports of subject g oods from
countries notified as developing countries under clause (a) of sub-section (6) of section
8B of the Customs Tariff Act, other than [the] People's Republic of China and Ukraine.573
7.418. Notification No. 19/2016 published by the Ministry of Finance on 5 February 2016 contains
a list of 132 developing countries which are in principle exempted from safeguard duties pursuant
to Section 8B of the Customs Tariff Act, 1975.574
7.419. In previous cases, panels have found that when origin is the sole criterion distinguishing the
products, it is unnecessary to establish the likeness of the relevant products in terms of the
traditional criteria. 575 In the present case, the measure at issue differentiates between (i) the
treatment granted to the subject g oods originating from certain developing countries listed in
Notification No. 19/2016; and (ii) the treatment granted to the subject goods from all other origins,
including developed countries, China, and Ukraine. Because the sole criterion differentiating what
are essentially the same subject goods is the origin, the relevant products may be considered to be
"like" products within the meaning of Article I:1.
7.420. With respect to the third element, the measure at issue exempted from the application of
the resulting duties imports of the subject products originating in those developing countries listed
in Notification No. 19/2016 (with the exception of China and Ukraine). This exemption constitutes
the benefit or advantage conferred by the measure at issue.
7.421. With respect to the fourth element, the exemption granted to the subject goods imported
from the developing countries listed in Notification No. 19/2016 was not extended to the like subject
products orig inating in the territory of all WTO Members. Therefore, it was also not extended
"immediately" and "unconditionally".
7.422. India has argued that " Article 9 [of the Agreement on Safeguards] provides for exceptions
or waivers [from the] MFN principle".576 It has also indicated that, when a measure is applied under
Article XIX of the GATT 1994, "there can be no question of violation" of Article I:1 of the
GATT 1994.577
7.423. Paragraph 1 of Article 9 of the Agreement on Safeguards states that:
Safeguard measures shall not be applied against a product originating in a developing
country Member as long as its share of imports of the product concerned in the
importing Member does not exceed 3 per cent, provided that developing country

572 Appellate Body Reports, EC – Seal Products, para. 5.86.
573 Notification imposing a definitive safeguard measure, (Exhibits JPN-13/IND-13), p. 7.
574 Notification No. 19/2016-Customs (5 February 2016), (Exhibits JPN-3/IND-3).
575 See, for example, Panel Report, US – Poultry (China), para. 7.427.
576 India's first written submission, para. 342.
577 India's first written submission, para. 337.

Members with less than 3 per cent import share collectively account for not more than
9 per cent of total imports of the product concerned.578
7.424. Conversely, paragraph 2 of Article 2 of the Agreement on Safeguards provides that
"[s]afeguard measures shall be applied to a product being imported irrespective of its source".
7.425. Accordingly, the provision of Article 9.1 contains at the same time an obligation and an
exception. In terms of the obligation, a Member applying a safeguard measure must exclude
developing countries exporting less than the de minimis level provided in Article 9.1.579 Article 9.1
also contains an exception from the rule that safeguard measures should be applied in a
non-discriminatory manner contained in Article 2.2 of the Agreement on Safeguards and from the
MFN rule in Article I:1 of the GATT 1994.
7.426. For the purpose of this dispute, we note that Japan has not raised a claim that the measure
at issue was applied in a manner inconsistent with India 's obligations under Article 9.1 of the
Agreement on Safeguards.
7.427. Nevertheless, India has suggested that Article 9.1 is an exemption from any discriminatory
application of the safeguard measure at issue. Article 9.1 of the Agreement on Safeguards, however,
can only operate as a valid exception for any discriminatory treatment of imports when the safeguard
measure at issue has not been found to be inconsistent with the obligations in Article XIX of the
GATT 1994 and the Agreement on Safeguards. Similarly, although Article XIX of the GATT 1994
allows WTO Members to suspend obligations incurred by a Member under the GATT 1994, such
suspension would only be valid when the safeguard measure at issue has not been found to be
inconsistent with the obligations in Article XIX of the GATT 1994 and the Agreement on Safeguards.
7.428. Since we have already concluded that the measure at issue is inconsistent with
India's obligations under Article XIX of the GATT 1994 and certain provisions of the Agreement on
Safeguards, the discriminatory application of the safeguard measure cannot be excused by
Article 9.1. Likewise, the measure at issue did not result in a valid suspension of India 's obligation
under Article I:1 of the GATT 1994.
7.15.4 Conclusion
7.429. For the reasons explained above, we conclude that India has acted inconsistently with its
obligations under Article I:1 of the GATT 1994. The discriminatory application of the measure at
issue cannot be excused by Article 9.1 of the Agreement on Safeguards.
7.16 Special and differential treatment
7.430. Pursuant to Article 12.11 of the DSU:
[W]here one or more of the parties is a developing country Member, the panel's report
shall explicitly indicate the form in which account has been taken of relevant provisions
on differential and more -favourable treatment for developing c ountry Members that
form part of the covered agreements which have been raised by the developing country
Member in the course of the dispute settlement procedures.
7.431. Article 12.10 of the DSU also provides the following:
[I]n examining a complaint against a developing country Member, the panel shall accord
sufficient time for the developing country Member to prepar e and present its
argumentation.
7.432. In the present proceedings, and except for arguments concerning Article 9 of the Agreement
on Safeguards which the Panel has already noted, none of the parties has referred to any provision
in the WTO Agreements on special and differential tr eatment for developing country Members . In
any event, when adopting and reviewing the timetable for the proceedings, the Panel made sure

578 Fn omitted.
579 Appellate Body Report, US – Line Pipe, para. 132.

that all parties, including India as a developing country respondent, had sufficient time to prepare
and submit their respective arguments. The Panel found that no other provisions on differential and
more favourable treatment for developing country Members were relevant for the resolution of the
matter in the dispute.
8 CONCLUSIONS AND RECOMMENDATION
8.1 Conclusions
8.1. For the reasons explained in this Report, the Panel concludes that the measure at issue resulted
in a suspension of obligations incurred by India under the GATT 1994. This measure was adopted
by India as a temporary emergency action designed to remedy an alleged situation of serious injury
to the domestic industry brought about by an increase in imports of the subject products. W e
accordingly conclude that the provisions of Article XIX of the GATT 1994 and the Agreement on
Safeguards are applicable to the examination of the claims raised in the present dispute.
8.2. The Panel concludes that India has acted inconsistently with the following provisions:
a. Article XIX:1(a) of the GATT 1994, by failing to demonstrate that the increase in imports
of the product concerned into India occurred as a result of unforeseen developments and
the effect of relevant obligations of the GATT 1994;
b. Articles 2.1 and 4.2(a) of the Agreement on Safeguards and Article XIX:1 of the
GATT 1994, in the determination on the increase in imports;
c. Articles 4.1(a), 4.1(b), and 4.2(a) of the Agreement on Safeguards, w ith respect to the
determination of serious injury and the threat of serious injury;
d. Article 4.2(b), first and second sentences, of the Agreement on Safeguards, by failing to
demonstrate the existence of a causal link between the increased imports and the alleged
serious injury suffered by the domestic industry and by failing to conduct a proper
non-attribution analysis;
e. Articles 3.1 and 4.2(c) of the Agreement on Safeguards, by failing to provide reasoned
conclusions on all pertinent issues of fact and law;
f. Article 12.4 of the Agreement on Safeguards , by failin g to notify the Committee on
Safeguards before taking the provisional safeguard measure at issue;
g. Article 12.2 of the Agreement on Safeguards , by failing to provide the Committee on
Safeguards with a precise description of the product involved and a precise description of
the proposed measure;
h. Article 12.3 of the Agreement on Safeguards , by failing to provide Japan, and other
Members with a substantial export interest in the product subject to the proposed
safeguard measure, with adequate opportunity for prior consultations with a view to
reviewing all pertinent information;
i. Article II:1(b), second sentence, of the GATT 1994, by imposing measures on the
importation of products which constitute "other duties or charges", which were not
recorded in its Schedule of Concessions; and
j. Article I of the GATT 1994, by having failed to extend immediately and unconditionally to
the products of all WTO Members certain advantages granted to products originating in
some countries. The discriminatory application of the measure at issue is not excused by
Article 9.1 of the Agreement on Safeguards.
8.3. The Panel also concludes that Japan failed to demonstrate that India acted inconsistently with
the following provisions:

a. Articles 2.1, 4.1(a), 4.1(b), 4.1(c) , 4.2(a), and 4.2(b) o f the Agreement on Safeguards
and Article XIX:1(a) of the GATT 1994, and consequentially Articles 3.1 and 4.2(c) of the
Agreement on Safeguards , with respect to the determination of the domestic industry;
and
b. Articles 12.1(a), (b) and (c) and 12.2 of the Agreement on Safeguards , with respect to
the notifications to the Committee on Safeguards of the initiation of a safeguard
investigation relating to serious injury or threat thereof, the findings of serious injury in
the investigation, and the decision to apply a definitive safeguard measure.
8.4. In light of the findings above, the Panel has exercised judicial economy with respect to the
following claims:
a. Japan's consequential claim that India acted inconsistently with Article 2.1 of the
Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 with regard to its
assessment of the situation of the domestic industry;
b. Japan's consequential claim that India acted inconsistently with Articles 2.1 and 4.2(a) of
the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 with respect to its
causation and non-attribution analyses;
c. Japan's claims under Articles 3.1, 4.2(c), 5.1, and 7.1 of the Agreement on Safeguards,
and Japan's consequential claim under Article XIX:1(a) of the GATT 1994, with respect to
the duration of the safeguard measure at issue and the level of the duties imposed; and
d. Japan's consequential claim under Article 11.1(a) of the Agreement on Safeguards.
8.5. In accordance with Article 3.8 of the DSU, in cases when there is an infringement of the
obligations assumed under a covered agreement, the action is considered prima facie to constitute
a case of nullification or impairment of benefits accruing under the agreement in question. In view
of the foregoing, the Panel concludes that, insofar as India has acted in a manner inconsistent with
Article XIX:1 of the GATT 1994 and several provisions of the Agreement on Safeguards , it has
nullified or impaired benefits accruing to Japan under those agreements.
8.2 Recommendation
8.6. Pursuant to Article 19.1 of the DSU, having found that India acted inconsistently with certain
provisions of the GATT 1994 and the Agreement on Safeguards, we recommend that, to the extent
that the measure continues to have any effects, India bring it into conformity with its obligations
under those agreements.