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8.5.2013 Official
Journal
of
the
European
Union L
126/19
COMMISSION REGULATION (EU) No 419/2013
of 3 May 2013
imposing a provisional countervailing duty on imports of certain stainless steel wires originating in
India
THE EUROPEAN COMMISSION,
1.2. Parties concerned by the investigation
Having regard to the Treaty on the Functioning of the European
(5) The
Commission
officially
advised
the
complainant,
other
Union,
known Union producers, the known exporting
producers, known importers and users, and the Indian
Having regard to Council Regulation (EC) No 597/2009 of
authorities of the initiation of the investigation.
11 June 2009 on protection against subsidised imports from
countries not members of the European Community ( 1 ) (‘the
(6) Interested
parties
were
given
an
opportunity
to
make
basic Regulation’), and in particular Article 12 thereof,
their views known in writing and to request a hearing
within the time limit set in the notice of initiation. All
After consulting the Advisory Committee,
interested parties, who so requested and showed that
there were particular reasons why they should be
Whereas:
heard, were granted a hearing.
1. PROCEDURE
(7) In
view
of
the
large
number
of
exporting
producers
in
1.1. Initiation
the country concerned, unrelated importers and Union
producers involved in the investigation and in order to
(1) On
10
August
2012,
the
European
Commission
(‘the
complete the investigation within the statutory time
Commission’) announced, by a notice published in the
limits, the Commission announced in the notice of
Official Journal of the European Union ( 2 ) (‘the notice of
initiation that it had decided to limit to a reasonable
initiation’), the initiation of an anti-subsidy proceeding
number the exporting producers in the country
('the anti-subsidy proceeding' or ‘the present proceeding’)
concerned, unrelated importers and Union producers
with regard to imports into the Union of certain stainless
that would be investigated by selecting a sample in
steel wires originating in India (‘the country concerned’).
accordance with Article 27 of the basic Regulation (the
process is also referred to as ‘sampling’).
(2) On
the
same
day,
the
Commission
announced
by
a
notice published in the Official Journal of the European
Union ( 3 ), the initiation of an anti-dumping proceeding
1.2.1. Sampling of exporting producers
with regard to imports into the Union of certain
stainless steel wires originating in India and
(8) In
order
to
enable
the
Commission
to
decide
whether
commenced a separate investigation ('the anti-dumping
sampling would be necessary and, if so, to select a
proceeding').
sample, all exporting producers in the country
concerned were requested to make themselves known
to the Commission and to provide information
(3) The
anti-subsidy
proceeding
was
initiated
following
a
specified in the notice of initiation.
complaint lodged on 28 June 2012 by the European

Confederation of Iron and Steel Industries (Eurofer)
('the complainant') on behalf of producers representing
(9) In
total,
18
exporting
producers,
some
belonging
to
the
more than 50 %, of the total Union production of certain
same group, provided the requested information within
stainless steel wires. The complaint contained prima facie
the deadline set in the notice of initiation, agreed to be
evidence of subsidisation of the said product and of
included in the sample and 7 of them asked for indi
material injury resulting therefrom, which was considered
vidual examination in case they would not be included in
sufficient to justify the initiation of an investigation.
the sample. Fifteen of these cooperating companies
reported exports of stainless steel wires to the Union
(4) Prior to the initiation of the proceeding and in
during the investigation period. Therefore, the sample
accordance with Article 10(7) of the basic Regulation,
was chosen on the basis of the information submitted
the Commission notified the Government of India (‘the
by these 15 exporting producers.
GOI’) that it had received a properly documented
complaint alleging that subsidised imports of certain
stainless steel wires originating in India were causing
(10) In
accordance
with
Article
27
of
the
basic
Regulation,
material injury to the Union industry. The GOI was
the Commission selected a sample based on the largest
invited for consultations with the aim of clarifying the
representative volume of exports of the product
situation as regards the contents of the complaint and
concerned to the Union which could reasonably be
arriving at a mutually agreed solution. In this case, no
investigated within the time available. The sample
mutually agreed solution was found.
selected consisted of two individual companies and one
group of companies consisting of four related companies,
together representing more than 63 % of the total
( 1 ) OJ L 188, 18.7.2009, p. 93.
( 2 ) OJ C 240, 10.8.2012, p. 6.
volume of exports to the Union of the product
( 3 ) OJ C 240, 10.8.2012, p. 15.
concerned.

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L 126/20
EN
Official Journal of the European Union
8.5.2013
(11) In
accordance
with
Article
27(2)
of
the
basic
Regulation
exporting producers which had requested individual
all known exporting producers concerned and the
examination, to the six sampled Union producers, to
relevant Indian authorities were also consulted on the
the three sampled unrelated importers and to nine
selection of a representative sample. No comments to
known users.
the selection of the sample were made.
(18) Questionnaire
replies
were
received
from
the
GOI,
the
(12) As
mentioned
in
recital
(10)
above
the
sample
was
three sampled (groups of) exporting producers, one of
limited to a reasonable number of companies which
those exporting producers which requested individual
could be investigated within the time available. The
examination, the six sampled producers in the Union,
companies investigated for the purpose of the investi
one unrelated importer and three users.
gation of subsidisation are listed in recital (19) below.
(19) The
Commission
sought
and
verified
all
the
information
(13) Moreover,
as
mentioned
in
recital
(9),
initially
7
requests
provided by interested parties and deemed necessary for a
for individual examination were received. Hence, it was
provisional determination of subsidisation, resulting
considered that at this stage the individual examination
injury and Union interest. Verification visits were
would be unduly burdensome and would prevent the
carried out at the premises of GOI in Delhi, and the
timely completion of the investigation. However, the
following parties:
requests made by the exporters that submitted the
necessary information within the time limits will be
Producers in the Union:
examined in the remainder of the investigation.
— Hagener Feinstahl GmbH, Hagen, Germany
1.2.2. Sampling of Union producers
(14) The
Commission
announced
in
the
notice
of
initiation
— Inoxfil S.A., Igualada, Spain
that it had provisionally selected a sample of Union
producers. This sample initially consisted of five
— Rodacciai SPA, Milano, Italy
producers that were known to the Commission prior
to the initiation of the investigation to produce
stainless steel wires in the Union. The Commission
— Trafilerie Brambilla SPA, Calziocorte, Italy
selected the sample on the basis of the sales, production
volume and geographical location. Interested parties were
— Ugitech Group:
also invited by the notice of the initiation to make their
views known on the provisional sample. The analysis of
— Ugitech France S.A., Bourg en Bresse, France
the questionnaire replies revealed that one selected Union
producer had a related company in the Union also
involved in the manufacturing and sales of stainless
— Sprint Metal Edelstahl, Hemer, Germany
steel wires. Thus, the six sampled Union producers
accounted for 46,5 % of the estimated total Union
Exporting producers in India:
production. The sample is considered representative of
the Union industry.
— Raajratna Metal Industries, Ahmedabad, Gujarat
1.2.3. Sampling of importers
— Viraj Profiles Vpl. Ltd., Thane, Maharashtra
(15) In order to enable the Commission to decide whether
sampling would be necessary and, if so, to select a
— Venus group:
sample, all unrelated importers were requested to make
themselves known to the Commission and to provide
— Venus Wire Industries Pvt. Ltd, Mumbai, Maha
information specified in the notice of initiation.
rashtra
(16) A total of nine unrelated importers provided the
— Precision Metals, Mumbai, Maharashtra
requested information and agreed to be included in the
sample. The Commission selected a sample of three
companies accounting for 23,8 % of Indian imports
— Hindustan Inox Ltd., Mumbai, Maharashtra
into the Union during the IP on the basis of the
largest volume of imports in to the Union. However,
— Sieves Manufacturer India Pvt. Ltd., Mumbai,
two of the importers selected in the sample did not
Maharashtra
submit the questionnaire replies. Therefore, sampling at
this stage of the investigation could not be applied and
1.3. Investigation period and period considered
cooperation will be sought from the other importers in
the remainder of the investigation.
(20) The
investigation
of
subsidisation
and
injury
covered
the
period from 1 April 2011 to 31 March 2012 ('investi
1.2.4. Questionnaire replies and verification visits
gation period' or ‘IP’). The examination of trends relevant
for the assessment of injury covered the period from
(17) Questionnaires were sent to the GOI, the three sampled
1 January 2009 to the end of the investigation period
(groups of) exporting producers in India and to the
(‘period considered’).

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EN
8.5.2013 Official
Journal
of
the
European
Union L
126/21
2. PRODUCT CONCERNED AND LIKE PRODUCT
(c) Advance Authorisation Scheme (‘AAS’);
2.1. Product concerned
(21) The product concerned is wire of stainless steel
(d) Export Promotion Capital Goods Scheme (‘EPCGS’);
containing by weight:
(e) Export Credit Scheme (‘ECS’);
— 2,5 % or more of nickel, other than wire containing
by weight 28 % or more but not more than 31 % of
nickel and 20 % or more but not more than 22 % of
(f) Focus Market Scheme (‘FMS’)
chromium,
— less than 2,5 % of nickel, other than wire containing
(g) Special Economic Zones/Export Oriented Units
by weight 13 % or more but not more than 25 % of
(‘SEZ/EOU’)
chromium and 3,5 % or more but not more than 6 %
of aluminium,
(26) The
schemes
(a),
(c
-
d)
and
(f
–
g)
specified
above
are
based on the Foreign Trade (Development and Regu
— originating in India, currently falling within CN codes
lation) Act 1992 (No 22 of 1992) which entered into
7223 00 19 and 7223 00 99.
force on 7 August 1992 ('Foreign Trade Act'). The
Foreign Trade Act authorises the GOI to issue notifi
(22) One party
claimed that so called “highly technical”
cations regarding the export and import policy. These
product types exist, which are different from the other
are summarised in 'Foreign Trade Policy' documents,
types of the product concerned produced in India and
which are issued by the Ministry of Commerce every
also in the Union. They further alleged that unlike most
five years and updated regularly. The Foreign Trade
types exported from India to the Union, the technical
Policy document relevant to the IP of this investigation
types are not commodities, but specific product types
is “Foreign Trade Policy 2009-2014 (‘FTP 09-14). In
produced for specific uses in certain steel grades and
addition, the GOI also sets out the procedures
certain diameters, and should not be covered by the
governing FTP 09-14 in a 'Handbook of Procedures,
investigation.
Volume I' ('HOP I 09-14'). The Handbook of Procedures
is updated on a regular basis.
(23) At
this
stage,
it
appears
that
the
technical
types
were
part
of the product definition and they have similar basic
(27) The
ECS
specified
above
under
(e)
is
based
on
sections
physical, chemical, and technical characteristics
21 and 35A of the Banking Regulation Act 1949, which
compared to other types of the product concerned.
allow the Reserve Bank of India ('RBI') to direct
Moreover, it appears that these types are also produced
commercial banks in the field of export credits.
by Union industry, hence the technical types are covered
by the scope of the investigation.
(28) The DDS specified above under (b) is based on section
2.2. Like product
75 of the Customs Act of 1962, on section 37 of the
Central Excise Act of 1944, on sections 93A and 94 of
(24) The
investigation
has
shown
that
the
product
concerned
the Financial Act of 1994 and on the Customs, Central
and the product produced and sold on the domestic
Excise Duties and Service Tax Drawback Rules of 1995.
market of India as well as the product produced by the
Drawback rates are published on a regular basis; those
Union industry and sold on the Union market have the
applicable to the IP were the All Industry Rates (AIR) of
same basic physical, chemical and technical character
Duty Drawback 2011-12, published in notification No.
istics and uses. They are therefore provisionally
68 / 2011- Cus. (N.T). The duty drawback scheme is also
considered to be alike within the meaning of Article 2(c)
referred to as a duty remission scheme in chapter 4 of
of the basic Regulation.
FTP 2009-2014.
3. SUBSIDISATION
3.2. Duty Entitlement Passbook Scheme (‘DEPBS’)
3.1. Introduction
(a) Legal Basis
(25) On the basis of the information contained in the
(29) The detailed description of the DEPBS is contained in
complaint and the replies to the Commission’s question
chapter 4.3 of the FTP 09-14 as well as in chapter 4
naire, the following schemes, which allegedly involve the
of the HOP I 09-14.
granting of subsidies, were investigated:
(a) Duty Entitlement Passbook Scheme (‘DEPBS’);
(b) Eligibility
(30) Any manufacturer-exporter or merchant-exporter is
(b) Duty Drawback Scheme (‘DDS’);
eligible for this scheme.

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L 126/22
EN
Official Journal of the European Union
8.5.2013
(c) Practical implementation of the DEPBS
(d) Conclusions on the DEPBS
(31) An
exporter
can
apply
for
DEPBS
credits
which
are
(36) The
DEPBS
provides
subsidies
within
the
meaning
of
calculated as a percentage of the value of products
Article 3(1)(a)(ii) and Article 3(2) of the basic Regulation.
exported under this scheme. Such DEPBS rates have
A DEPBS credit is a financial contribution by the GOI
been established by the Indian authorities for most
since the credit will eventually be used to offset import
products, including the product concerned. They are
duties, thus decreasing the GOI’s duty revenue which
determined on the basis of Standard Input Output
would otherwise be due. In addition, the DEPBS credit
Norms ('SIONs') taking into account a presumed
confers a benefit upon the exporter because it improves
import content of inputs in the export product and the
its liquidity.
customs duty incidence on such presumed imports,
regardless of whether import duties have actually been
paid or not. The DEPBS rate for the product concerned
during the IP of the current investigation was 5 % with a
value cap of 97 Rs/kg.
(37) Furthermore,
the DEPBS is contingent in law upon
export performance, and therefore deemed to be
specific and countervailable under Article 4(4), first
subparagraph, point (a) of the basic Regulation.
(32) To
be
eligible
for
benefits
under
this
scheme,
a
company
must export. At the time of the export transaction, a
declaration must be made by the exporter to the
Indian authorities indicating that the export is taking
(38) This
scheme
cannot
be
considered
a
permissible
duty
place under the DEPBS. In order for the goods to be
drawback system or substitution drawback system
exported, the Indian customs authorities issue an
within the meaning of Article 3(1)(a)(ii) of the basic
export shipping bill during the dispatch procedure. This
Regulation since it does not conform to the rules laid
document shows, inter alia, the amount of DEPBS credit
down in Annex I item (i), Annex II (definition and rules
which is to be granted for that export transaction. At this
for drawback) and Annex III (definition and rules for
point in time, the exporter knows the benefit it will
substitution drawback) of the basic Regulation. In
receive. Once the customs authorities issue an export
particular, an exporter is under no obligation to
shipping bill, the GOI has no discretion over the
actually consume the goods imported free of duty in
granting of a DEPBS credit.
the production process and the amount of credit is not
calculated in relation to actual inputs used. Moreover,
there is no system or procedure in place to confirm
which inputs are consumed in the production process
(33) It
was
found
that
in
accordance
with
Indian
accounting
of the exported product or whether an excess payment
standards, DEPBS credits can be booked on an accrual
of import duties occurred within the meaning of item (i)
basis as income in the commercial accounts, upon
of Annex I, and Annexes II and III of the basic Regu
fulfilment of the export obligation. Such credits can be
lation. Lastly, an exporter is eligible for the DEPBS
used for payment of customs duties on subsequent
benefits regardless of whether it imports any inputs at
imports of any goods - except capital goods and goods
all. In order to obtain the benefit, it is sufficient for an
where there are import restrictions. Goods imported
exporter to simply export goods without demonstrating
against such credits can be sold on the domestic
that any input material was imported. Thus, even
market (subject to sales tax) or used otherwise. DEPBS
exporters which procure all of their inputs locally and
credits are freely transferable and valid for a period of 24
do not import any goods which can be used as inputs
months from the date of issue.
are still entitled to benefit from the DEPBS.
(34) Application
for
DEPBS
credits
are
electronically
filed
and
(e) Abolishment of the DEPBS and transition to DDS
can cover an unlimited amount of export transactions.
De facto no strict deadlines apply to DEPBS credits. The
(39) By
means
of
Public
Notice
No
54
(RE-2010)/2009-2014
electronic system used to manage DEPBS does not auto
of 17 June 2011, the DEPBS received a final three
matically exclude export transactions exceeding the
months extension which prolonged its applicability
submission deadline mentioned in chapter 4.47 HOP I
until 30 September 2011. As no further extension was
09-14. Furthermore, as clearly provided in chapter 9.3 of
published subsequently, the DEPBS has effectively been
the HOP I 09-14, applications received after the expiry of
withdrawn from 30 September 2011 onwards. Therefore
submission deadlines can always be considered subject to
it was necessary to verify whether measures could be
the imposition of a minor penalty fee (i.e. 10 % of the
imposed in accordance with Article 15(1) of the basic
entitlement).
Regulation.
(35) It
was
found
that
two
companies
in
the
sample
used
this
(40) The
GOI
explained
to
the
Commission
that
upon
with
scheme during the first two quarters of the IP.
drawal of the DEPBS scheme, companies could opt for

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EN
8.5.2013 Official
Journal
of
the
European
Union L
126/23
other duty exemption/remission schemes defined under
shows, inter alia, the amount of DEPBS credit which is to
chapter 4 of FTP 09-14, i.e. the Advance Authorisation
be granted for that export transaction, the GOI has no
Scheme (AAS) or the Duty Drawback Scheme (DDS).
discretion as to whether or not to grant the subsidy. In
the light of the above, it is considered appropriate to
assess the benefit under the DEPBS as being the sums
(41) The
investigation
revealed
that
both
sampled
companies
of the credits earned on export transactions made under
started availing themselves of the DDS immediately after
this scheme during the IP.
the DEPBS was withdrawn. It must be noted that DDS
has been introduced in 1995 and coexisted with DEPBS
during the first two quarters of the IP and for a number
(46) Where justified claims were made, fees necessarily
of years before the IP. DDS could however not be availed
incurred to obtain the subsidy were deducted from the
simultaneously with DEPBS on the same exports.
credits so established to arrive at the subsidy amounts as
numerator, pursuant to Article 7(1)(a) of the basic Regu
lation. In accordance with Article 7(2) of the basic Regu
lation these subsidy amounts have been allocated over
(42) It
must
be
noted
that
the
GOI
took
steps
to
organise
a
smooth transition from DEPBS to DDS, as demonstrated
the total export turnover of the product concerned
in circular No. – 42 /2011-Customs, dated 22/09/2011.
during the IP as appropriate denominator, because the
In this circular it is explained that "the [duty] drawback
subsidy is contingent upon export performance and it
schedule this year incorporates items which were hitherto
was not granted by reference to the quantities manufac
under the DEPB[S] scheme". The same circular states that
tured, produced, exported or transported.
for sectors operating under DEPBS, it "has been decided
to provide a smooth transition for items in these sectors
while incorporating these in the drawback schedule. As a
(47) Based on the above, the subsidy rates established in
transitory arrangement, these items will suffer a modest
respect of this scheme for the concerned companies
reduction from their DEPB[S] rates, ranging from 1 % to
during the IP amounted to 0,58 % and 0,93 %, 1,04 %,
3 % for most items." In other words, this circular
1,32 %, 2,04 % for the companies of Venus group
indicates that the duty drawback rates in force w.e.f.
respectively.
01/10/2011 were determined so that they would
confer a similar benefit as the withdrawn DEPBS.
3.3. Duty Drawback Scheme ('DDS')
(a) Legal Basis
(43) The
DDS
rates
applicable
as
of
1
October
2011
to
the
product concerned were indeed found to confer similar
(48) The detailed description of the DDS is contained in the
levels of subsidiation as the DEPBS was until the
Custom & Central Excise Duties Drawback Rules, 1995
30 September 2011. The investigation confirmed also
as amended by successive notifications.
very close levels of the subsidy margins of DEPB and
DDS for all the sampled companies, each of them
using DEPBS in the first 6 months of the IP and DDS
(b) Eligibility
in the following 6 months of the IP.


(49) Any manufacturer-exporter or merchant-exporter is
eligible for this scheme.
(44) Recitals (41) to (43) above demonstrate that, even
though the DEPBS scheme was withdrawn, the
underlying benefits continued to be conferred without
(c) Practical implementation
discontinuation and at an almost identical level by
providing a seamless transition to the duty drawback
(50) An
eligible
exporter
can
apply
for
drawback
amount
scheme. For that reason, it is concluded that the
which is calculated as a percentage of the FOB value of
subsidies have not been withdrawn within the meaning
products exported under this scheme. The drawback rates
of Article 15(1) of the basic Regulation and that DEPBS
have been established by the GOI for a number of
is countervailable.
products, including the product concerned. They are
determined on the basis of the average quantity or
value of materials used as inputs in the manufacturing
(f) Calculation of the subsidy amount
of a product and the average amount of duties paid on
inputs. They are applicable regardless of whether import
(45) In
accordance
with
Articles
3(2)
and
5
of
the
basic
Regu
duties have actually been paid or not. The DDS rate for
lation, the amount of countervailable subsidies was
the product concerned during the IP was 4 % of FOB
calculated in terms of the benefit conferred on the
value, subject to a cap of 5 Rs/kg whichever is lower.
recipient, which is found to exist during the investigation
period. In this regard, it was considered that the benefit is
conferred on the recipient at the time when an export
(51) To
be
eligible
to
benefits
under
this
scheme,
a
company
transaction is made under this scheme. At this moment,
must export. At the moment when shipment details are
the GOI is liable to forego the customs duties, which
entered in the Customs server (ICEGATE), it is indicated
constitutes a financial contribution within the meaning
that the export is taking place under the DDS and the
of Article 3(1)(a)(ii) of the basic Regulation. Once the
DDS amount is fixed irrevocably. After the shipping
customs authorities issue an export shipping bill which
company has filed the Export General Manifest (EGM)

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L 126/24
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Official Journal of the European Union
8.5.2013
and the Customs office has satisfactorily compared that
(60) This
is
confirmed
by
GOI's
circular
no
24/2001
which
document with the shipping bill data, all conditions are
clearly states that "[duty drawback rates] have no relation
fulfilled to authorise the payment of the drawback
to the actual input consumption pattern and actual
amount by either direct payment on the exporter's
incidence suffered on inputs of a particular exporter or
bank account or by draft.
individual consignments […]" and instructs regional
authorities that "no evidence of actual duties suffered
on imported or indigenous nature of inputs […]
(52) The
exporter
also
has
to
produce
evidence
of
realisation
should be insisted upon by the field formations along
of export proceeds by means of a Bank Realisation
with the [drawback claim] filed by exporters".
Certificate (BRC). This document can be provided after
the drawback amount has been paid but the GOI will
recover the paid amount if the exporter fails to submit
the BRC within a given delay.
(61) In view of the above, it is concluded that DDS is counter
vailable.
(53) The
drawback
amount
can
be
used
for
any
purpose.
(e) Calculation of the subsidy amount
(54) It
was
found
that
in
accordance
with
Indian
accounting
standards, the duty drawback amount can be booked on
(62) In
accordance
with
Articles
3(2)
and
5
of
the
basic
Regu
an accrual basis as income in the commercial accounts,
lation, the amount of countervailable subsidies was
upon fulfilment of the export obligation.
calculated in terms of the benefit conferred on the
recipient, which is found to exist during the investigation
period. In this regard, it was considered that the benefit is
(55) Two
of
the
sampled
companies
were
found
to
use
the
conferred on the recipient at the time when an export
DDS during the last two quarters of the IP.
transaction is made under this scheme. At this moment,
the GOI is liable to the payment of the drawback
amount, which constitutes a financial contribution
(d) Conclusion on DDS
within the meaning of Article 3(1)(a)(ii) of the basic
Regulation. Once the customs authorities issue an
(56) The
DDS provides subsidies within the meaning of
export shipping bill which shows, inter alia, the
Article 3(1)(a)(ii) and Article 3(2) of the basic Regulation.
amount of drawback which is to be granted for that
A duty drawback amount is a financial contribution by
export transaction, the GOI has no discretion as to
the GOI as it takes form of a direct transfer of funds by
whether or not to grant the subsidy. In the light of the
the GOI. In addition, the duty drawback amount confers
above, it is considered appropriate to assess the benefit
a benefit upon the exporter, because it improves its
under the DDS as being the sums of the drawback
liquidity.
amounts earned on export transactions made under
this scheme during the IP.
(57) Furthermore,
the
DDS
is
contingent
in
law
upon
export
performance, and is therefore deemed to be specific and
countervailable under Article 4(4), first subparagraph,
(63) In
accordance
with
Article
7(2)
of
the
basic
Regulation
point (a) of the basic Regulation.
these subsidy amounts have been allocated over the total
export turnover of the product concerned during the
review investigation period as appropriate denominator,
(58) This
scheme
cannot
be
considered
as
permissible
duty
because the subsidy is contingent upon export
drawback system or substitution drawback system
performance and it was not granted by reference to the
within the meaning of Article 3(1)(a)(ii) of the basic
quantities manufactured, produced, exported or trans
Regulation. It does not conform to the strict rules laid
ported.
down in Annex I point (i), Annex II (definition and rules
for drawback) and Annex III (definition and rules for
substitution drawback) of the basic Regulation.
(64) Based on the above, the subsidy rates established in
respect of this scheme for the cooperating companies
(59) There
is
no
system
or
procedure
in
place
to
confirm
concerned amounted to 0,61 % and 1,14 %, 1,77 %,
which inputs are consumed in the production process
1,68 %, 1,91 % for the companies of Venus group
of the exported product or whether an excess payment
respectively.
of import duties occurred within the meaning of point (i)
of Annex I and Annexes II and III of the basic Regu
lation. Lastly, an exporter is eligible for the DDS benefits
regardless of whether it imports any inputs at all. In
3.4. Advance Authorisation Scheme ('AAS')
order to obtain the benefit, it is sufficient for an
exporter to simply export goods without demonstrating
(a) Legal basis
that any input material was imported. Thus, even
exporters which procure all of their inputs locally and
(65) The detailed description of the scheme is contained in
do not import any goods which can be used as inputs
paragraphs 4.1.1 to 4.1.14 of the FTP 09-14 and
are still entitled to benefit from the DDS.
chapters 4.1 to 4.30 of the HOP I 09-14.

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EN
8.5.2013 Official
Journal
of
the
European
Union L
126/25
(b) Eligibility
mentioned in paragraph 8.2(b) to (f), (g), (i) and (j) of
the FTP 09-14. According to the GOI, deemed
(66) The
AAS
consists
of
six
sub-schemes,
as
described
in
exports refer to those transactions in which the
more detail in recital (67) below. Those sub-schemes
goods supplied do not leave the country. A
differ inter alia in the scope of eligibility. Manufacturer-
number of categories of supply is regarded as
exporters and merchant-exporters "tied to" supporting
deemed exports provided the goods are manu
manufacturers are eligible for the AAS physical exports
factured in India, e.g. supply of goods to an
and for the AAS for annual requirement sub-schemes.
export-oriented unit ('EOU') or to a company
Manufacturer–exporters supplying the ultimate exporter
situated in a special economic zone ('SEZ');
are eligible for AAS for intermediate supplies. Main
contractors which supply to the "deemed export"
categories mentioned in paragraph 8.2 of the FTP 09-
14, such as suppliers of an export oriented unit ('EOU'),
are eligible for the AAS deemed export sub-scheme.
(v) Advance Release Order ('ARO'): The AAS holder
Eventually, intermediate suppliers to manufacturer-
intending to source the inputs from indigenous
exporters are eligible for "deemed export" benefits
sources, in lieu of direct import, has the option to
under the sub-schemes Advance Release Order ('ARO')
source them against AROs. In such cases the
and back to back inland letter of credit.
Advance Authorisations are validated as AROs and
are endorsed to the indigenous supplier upon
delivery of the items specified therein. The
endorsement of the ARO entitles the indigenous
(c) Practical implementation
supplier to the benefits of deemed exports as set
out in paragraph 8.3 of the FTP 09-14 (i.e. AAS
(67) The
AAS
can
be
issued
for:
for intermediate supplies/deemed export, deemed
export drawback and refund of terminal excise
duty). The ARO mechanism refunds taxes and
duties to the supplier instead of refunding the
(i) Physical exports: This is the main sub-scheme. It
same to the ultimate exporter in the form of draw
allows for duty-free import of input materials for
back/refund of duties. The refund of taxes/duties is
the production of a specific resulting export
available both for indigenous inputs as well as
product. "Physical" in this context means that the
imported inputs;
export product has to leave Indian territory. An
import allowance and export obligation including
the type of export product are specified in the
licence;
(vi) Back to back inland letter of credit: This sub-scheme
again covers indigenous supplies to an Advance
Authorisation holder. The holder of an Advance
(ii) Annual requirement: Such an authorisation is not
Authorisation can approach a bank for opening an
linked to a specific export product, but to a wider
inland letter of credit in favour of an indigenous
product group (e.g. chemical and allied products).
supplier. The authorisation will be validated by the
The licence holder can – up to a certain value
bank for direct import only in respect of the value
threshold set by its past export performance –
and volume of items being sourced indigenously
import duty-free any input to be used in manufac
instead of importation. The indigenous supplier
turing any of the items falling under such a product
will be entitled to deemed export benefits as set
group. It can choose to export any resulting product
out in paragraph 8.3 of the FTP 09-14 (i.e. AAS
falling under the product group using such duty-
for intermediate supplies/deemed export, deemed
exempt material;
export drawback and refund of terminal excise duty).
(iii) Intermediate supplies: This sub-scheme covers cases
where two manufacturers intend to produce a
(68) Two
companies
in
the
sample
received
concessions
under
single export product and divide the production
the AAS linked to the product concerned during the IP.
process. The manufacturer-exporter who produces
These companies made use of one of the sub-schemes,
the intermediate product can import duty-free
i.e. AAS physical exports. It is therefore not necessary to
input materials and can obtain for this purpose an
establish the countervailability of the remaining unused
AAS for intermediate supplies. The ultimate exporter
sub-schemes.
finalises the production and is obliged to export the
finished product;
(69) For
verification
purposes
by
the
Indian
authorities,
an
(iv) Deemed exports: This sub-scheme allows a main
Advance Authorisation holder is legally obliged to
contractor to import inputs free of duty which are
maintain "a true and proper account of consumption
required in manufacturing goods to be sold as
and utilisation of duty-free imported/domestically
“deemed exports” to the categories of customers
procured goods" in a specified format (chapters 4.26,

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L 126/26
EN
Official Journal of the European Union
8.5.2013
4.30 and Appendix 23 HOP I 09-14), i.e. an actual
to be specific and countervailable under Article 4(4), first
consumption register. This register has to be verified by
subparagraph, point (a) of the basic Regulation. Without
an external chartered accountant/cost and works
an export commitment a company cannot obtain
accountant who issues a certificate stating that the
benefits under these schemes.
prescribed registers and relevant records have been
examined and the information furnished under
Appendix 23 is true and correct in all respects.
(76) The
sub-scheme
used
in
the
present
case
cannot
be
considered permissible duty drawback system or substi
(70) With regard to the sub-scheme used during the IP by the
tution drawback system within the meaning of
companies concerned, i.e. physical exports, the import
Article 3(1)(a)(ii) of the basic Regulation. It does not
allowance and the export obligation are fixed in
conform to the rules laid down in Annex I item (i),
volume and value by the GOI and are documented on
Annex II (definition and rules for drawback) and Annex
the Authorisation. In addition, at the time of import and
III (definition and rules for substitution drawback) of the
of export, the corresponding transactions are to be docu
basic Regulation. The GOI did not effectively apply a
mented by Government officials on the Authorisation.
verification system or a procedure to confirm whether
The volume of imports allowed under the AAS is
and in what amounts inputs were consumed in the
determined by the GOI on the basis of Standard Input
production of the exported product (Annex II(II)(4) of
Output Norms ('SIONs') which exist for most products
the basic Regulation and, in the case of substitution
including the product concerned.
drawback schemes, Annex III(II)(2) of the basic Regu
lation). It is also considered that the SIONs for the
product concerned were not sufficiently precise and
that themselves cannot constitute a verification system
(71) Imported
input
materials
are
not
transferable
and
have
to
of actual consumption because the design of those
be used to produce the resultant export product. The
standard norms does not enable the GOI to verify with
export obligation must be fulfilled within a prescribed
sufficient precision what amounts of inputs were
time frame after issuance of the licence (24 months
consumed in the export production. In addition, the
with two possible extensions of 6 months each).
GOI did not carry out a further examination based on
actual inputs involved, although this would normally
need to be carried out in the absence of an effectively
applied verification system (Annex II(II)(5) and Annex
III(II)(3) to the basic Regulation).
(72) The investigation established that the verification

requirements stipulated by the Indian authorities were
either not honoured or not yet tested in practice.
(77) The
sub-scheme
is
therefore
countervailable.
(73) Both
verfied
companies
maintained
a
certain
production
and consumption register. However, the consumption
register did not allow to verify which inputs were
consumed in the production of the exported product
(e) Calculation of the subsidy amount
and in what amounts. Regarding the verification
requirements referred to in recital (69) above, there
(78) In
the
absence
of
permitted
duty
drawback
systems
or
were no records kept by the companies which would
substitution drawback systems, the countervailable
prove that the external audit of the consumption
benefit is the remission of total import duties normally
register took place. In sum, it is considered that the
due upon importation of inputs. In this respect, it is
investigated exporters were not able to demonstrate
noted that the basic Regulation does not only provide
that the relevant FT-policy provisions were met.
for the countervailing of an "excess" remission of duties.
According to Article 3(1)(a)(ii) and Annex I(i) of the basic
Regulation only when the conditions of Annexes II and
III of the basic Regulation are met that the excess
(d) Conclusion on the AAS
remission of duties can be countervailed. However,
these conditions were not fulfilled in the present case.
(74) The
exemption
from
import
duties
is
a
subsidy
within
Thus, if an adequate monitoring process is not demon
the meaning of Article 3(1)(a)(ii) and Article 3(2) of the
strated, the above exception for drawback schemes is not
basic Regulation, namely it constitutes a financial
applicable and the normal rule of the countervailing of
contribution of the GOI since it decreases duty revenue
the amount of unpaid duties (revenue forgone), applies,
which would otherwise be due and it confers a benefit
rather than of any purported excess remission. As set out
upon the investigated exporters since it improves their
in Annexes II(II) and III(II) of the basic Regulation the
liquidity.
burden is not upon the investigating authority to
calculate such excess remission. To the contrary,
according to Article 3(1)(a)(ii) of the basic Regulation,
the investigating authority only has to establish sufficient
(75) In addition, AAS physical exports are clearly contingent
evidence to refute the appropriateness of an alleged
in law upon export performance, and therefore deemed
verification system.

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EN
8.5.2013 Official
Journal
of
the
European
Union L
126/27
(79) The
subsidy
amount
for
the
companies
which
used
the
(85) It
was
found
that
all
the
three
companies
in
the
sample
AAS was calculated on the basis of import duties forgone
received concessions under the EPCGS which could
(basic customs duty and special additional customs duty)
allocated to the product concerned in the IP.
on the material imported under the sub-scheme during
the IP (numerator). In accordance with Article 7(1)(a) of
the basic Regulation, fees necessarily incurred to obtain
(d) Conclusion on EPCGS
the subsidy were deducted from the subsidy amount
where justified claims were made. In accordance with
(86) The
EPCGS
provides
subsidies
within
the
meaning
of
Article 7(2) of the basic Regulation, this subsidy
Article 3(1)(a)(ii) and Article 3(2) of the basic Regulation.
amount was allocated over the export turnover of the
The duty reduction constitutes a financial contribution by
product concerned during the IP as appropriate
the GOI, since this concession decreases the GOI’s duty
denominator because the subsidy is contingent upon
revenue which would be otherwise due. In addition, the
export performance and was not granted by reference
duty reduction confers a benefit upon the exporter,
to the quantities manufactured, produced, exported or
because the duties saved upon importation improve the
transported.
company’s liquidity.
(80) The
subsidy
rate
established
in
respect
of
this
scheme
for
(87) Furthermore,
EPCGS
is
contingent
in
law
upon
export
the concerned companies for the IP amounts to 2,43 %
performance, since such licences cannot be obtained
and 0,15 %, 0 %, 0 %, 0 % for the companies of Venus
without a commitment to export. Therefore, it is
group respectively.
deemed to be specific and countervailable under
Article 4(4), first subparagraph, point (a) of the basic
Regulation.
3.5. Export Promotion Capital Goods Scheme
(‘EPCGS’)
(88) EPCGS cannot be considered a permissible duty
(a) Legal basis
drawback system or substitution drawback system
within the meaning of Article 3(1)(a)(ii) of the basic
(81) The
detailed
description
of
EPCGS
is
contained
in
chapter
Regulation. Capital goods are not covered by the scope
5 of FTP 09-14 as well as in chapter 5 HOP I 09-14.
of such permissible systems, as set out in Annex I point
(i), of the basic Regulation, because they are not
consumed in the production of the exported products.
(b) Eligibility
(82) Manufacturer-exporters, merchant-exporters “tied to”
(e) Calculation of the subsidy amount
supporting manufacturers and service providers are
eligible for this scheme.
(89) The
subsidy
amount
was
calculated,
in
accordance
with
Article 7(3) of the basic Regulation, on the basis of the
unpaid customs duty on imported capital goods spread
across a period which reflects the normal depreciation
(c) Practical implementation
period of such capital goods in the industry concerned.
The amount so calculated, which is attributable to the IP,
(83) Under
the
condition
of
an
export
obligation,
a
company
has been adjusted by adding interest during this period in
is allowed to import capital goods (new and second-hand
order to reflect the full value of the benefit over time.
capital goods up to 10 years old) at a reduced rate of
The commercial interest rate during the investigation
duty. To this end, the GOI issues, upon application and
period in India was considered appropriate for this
payment of a fee, an EPCGS licence. The scheme provides
purpose. Where justified claims were made, fees
for a reduced import duty rate of 3 % applicable to all
necessarily incurred to obtain the subsidy were
capital goods imported under the scheme. In order to
deducted in accordance with Article 7(1)(a) of the basic
meet the export obligation, the imported capital goods
Regulation.
must be used to produce a certain amount of export
goods during a certain period. Under FTP 09-14 the
capital goods can be imported with a 0 % duty rate
(90) In accordance with Article 7(2) and 7(3) of the basic
under the EPCGS but in such case the time period for
Regulation, this subsidy amount has been allocated
fulfilment of the export obligation is shorter.
over the appropriate export turnover during the IP as
the appropriate denominator because the subsidy is
contingent upon export performance and was not
(84) The
EPCGS
licence
holder
can
also
source
the
capital
granted by reference to the quantities manufactured,
goods indigenously. In such case, the indigenous manu
produced, exported or transported.
facturer of capital goods may avail himself of the benefit
for duty free import of components required to manu
facture such capital goods. Alternatively, the indigenous
(91) The
subsidy
rate
established
with
regard
to
this
scheme
manufacturer can claim the benefit of deemed export in
during the IP for the companies concerned amounted to
respect of supply of capital goods to an EPCGS licence
respectively 0,09 %, 0,6 % and 0,02 %, 0 %, 0 %, 0 % for
holder.
the companies of Venus group respectively.

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L 126/28
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Official Journal of the European Union
8.5.2013
3.6. Export Credit Scheme (‘ECS’)
financing. In fact, it is usually perceived as being more
risky and the extent of security required for a certain
(a) Legal basis
credit, regardless of the finance object, is a purely
commercial decision of a given commercial bank. Rate
(92) The
details
of
the
scheme
are
set
out
in
the
Master
differences with regard to different banks are the result of
Circular DBOD No. DIR.(Exp).BC 01/04.02.02/2007-08
the methodology of the RBI to set maximum lending
(Rupee/Foreign Currency Export Credit) and Master
rates for each commercial bank individually.
Circular DBOD No. DIR.(Exp).BC 09/04.02.02/2008-09
(Rupee/Foreign Currency Export Credit) of the Reserve
Bank of India (‘RBI’), which is addressed to all
(98) Despite
the
fact
that
the
preferential
credits
under
the
commercial banks in India.
ECS are granted by commercial banks, this benefit is a
financial contribution by a government within the
meaning of Article 3(1)(a)(iv) of the basic Regulation.
In this context, it should be noted that neither
Article 3(1)(a)(iv) of the basic Regulation nor the
(b) Eligibility
Agreement on Subsidies and Countervailing Measures
require a charge on the public accounts, e.g.
(93) Manufacturing exporters and merchant-exporters are
reimbursement of the commercial banks by the GOI,
eligible for this scheme.
to establish a subsidy, but only government direction
to carry out functions illustrated in points (i), (ii) or
(iii) of Article 3(1)(a) of the basic Regulation. The RBI
is a public body and falls therefore under the definition
(c) Practical implementation
of "government" as set out in Article 2(b) of the basic

Regulation. It is 100 % government-owned, pursues
(94) Under
this
scheme,
the
RBI
sets
maximum
ceiling
interest
public policy objectives, e.g. monetary policy, and its
rates applicable to export credits which are mandatory,
management is appointed by the GOI. The RBI directs
both in Indian rupees and in foreign currency, which
private bodies, within the meaning of the second indent
commercial banks can charge an exporter. The ECS
of Article 3(1)(a)(iv) of the basic Regulation, since the
consists of two sub-schemes, the Pre-Shipment Export
commercial banks are bound by the conditions it
Credit Scheme ("packing credit"), which covers credits
imposes, inter alia, with regard to the maximum
provided to an exporter for financing the purchase,
ceilings for interest rates on export credits mandated in
processing, manufacturing, packing and/or shipping of
the RBI Master Circulars and the RBI provisions that
goods prior to export, and the Post-Shipment Export
commercial banks have to provide a certain amount of
Credit Scheme, which provides for working capital
their net bank credit towards export finance. This
loans with the purpose of financing export receivables.
direction obliges commercial banks to carry out
The RBI also directs the banks to provide a certain
functions mentioned in Article 3(1)(a)(i) of the basic
amount of their net bank credit towards export finance.
Regulation, in this case to provide loans in the form of
preferential export financing. Such direct transfer of
funds in the form of loans under certain conditions
would normally be vested in the government, and the
practice differs, in no real sense, from practices normally
(95) As
a
result
of
the
RBI
Master
Circulars
exporters
can
followed by governments, within the meaning of
obtain export credits at preferential interest rates as
Article 3(1)(a)(iv) of the basic Regulation. This subsidy
compared with the interest rates for ordinary commercial
is deemed to be specific and countervailable since the
credits ("cash credits"), which are solely set under market
preferential interest rates are only available in relation
conditions. The difference in rates might decrease for
to the financing of export transactions and are
companies with good credit ratings. In fact, high rating
therefore contingent upon export performance,
companies might be in a position to obtain export
pursuant to Article 4(4), first subparagraph, point (a) of
credits and cash credits at the same conditions.
the basic Regulation.
(e) Calculation of the subsidy amount
(99) The
subsidy
amount
has
been
calculated
on
the
basis
of
(96) It
was
found
that
the
two
of
the
sampled
companies
used
this scheme during the IP.
the difference between the interest paid for export credits
used during the IP and the amount that would have been
payable for ordinary commercial credits used by the
company concerned. This subsidy amount (numerator)
has been allocated over the total export turnover
(d) Conclusion on the ECS
during the IP or total export turnover of the product
concerned in the IP for the credits where clear link
(97) The
preferential
interest
rates
of
an
ECS
credit
set
by
the
with the product concerned could be established, which
RBI Master Circulars mentioned in recital (95) can
could be used as the appropriate denominator in
decrease the interest costs of an exporter as compared
accordance with Article 7(2) of the basic Regulation
with credit costs purely set by market conditions and
because the subsidy is contingent upon export
confer in this case a benefit in the meaning of Article 3(2)
performance and it was not granted by reference to the
of the basic Regulation on such an exporter. Export
quantities manufactured, produced, exported or trans
financing is not per se more secure than domestic
ported.

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EN
8.5.2013 Official
Journal
of
the
European
Union L
126/29
(100) The subsidy rate established in respect of this scheme for
A FMS duty credit is a financial contribution by the GOI,
the companies concerned for the IP amounts to 0,61 %
since the credit will eventually be used to offset import
and 0,08 %, 0,28 %, 0,03 %, 0,10 % for the companies of
duties, thus decreasing the GOI’s duty revenue which
Venus group respectively.
would be otherwise due. In addition, the FMS duty
credit confers a benefit upon the exporter, because it
improves its liquidity.
3.7. Focus Market Scheme (‘FMS’)
(a) Legal basis
(108) Furthermore, FMS is contingent in law upon export
performance, and therefore deemed to be specific and
(101) The detailed description of FMS is contained in paragraph
countervailable under Article 4(4), first subparagraph,
3.14 of FTP 09-14 and in paragraph 3.8 of HOP I 09-14.
point (a) of the basic Regulation.
(b) Eligibility
(109) This scheme cannot be considered a permissible duty
drawback system or substitution drawback system
(102) Any manufacturer-exporter or merchant-exporter is
within the meaning of Article 3(1)(a)(ii) of the basic
eligible for this scheme.
Regulation. It does not conform to the strict rules laid
down in Annex I point (i), Annex II (definition and rules
for drawback) and Annex III (definition and rules for
substitution drawback) of the basic Regulation. An
(c) Practical implementation
exporter is under no obligation to actually consume
the goods imported free of duty in the production
(103) Under this scheme exports of all products to countries
process and the amount of credit is not calculated in
notified under tables 1 and 2 of Appendix 37(C) of HOP
relation to actual inputs used. There is no system or
I 09-14 are entitled to duty credit equivalent to 3 % of
procedure in place to confirm which inputs are
the FOB value. As of 1 April 2011, exports of all
consumed in the production process of the exported
products to countries notified under table 3 of
product or whether an excess payment of import
Appendix 37(C) ('Special Focus Markets') are entitled to
duties occurred within the meaning of point (i) of
a duty credit equivalent to 4 % of the FOB value. Certain
Annex I and Annexes II and III of the basic Regulation.
types of export activities are excluded from the scheme,
An exporter is eligible for FMS benefits regardless of
e.g. exports of imported goods or transhipped goods,
whether it imports any inputs at all. In order to obtain
deemed exports, service exports and export turnover of
the benefit, it is sufficient for an exporter to simply
units operating under special economic zones/export
export goods without demonstrating that any input
operating units. Also excluded from the scheme are
material was imported. Thus, even exporters which
certain types of products, e.g. diamonds, precious
procure all of their inputs locally and do not import
metals, ores, cereals, sugar and petroleum products.
any goods which can be used as inputs are still entitled
to benefit from FMS. Moreover, an exporter can use FMS
duty credits in order to import capital goods although
capital goods are not covered by the scope of permissible
(104) The duty credits under FMS are freely transferable and
valid for a period of 24 months from the date of issue of
duty drawback systems, as set out in Annex I point (i) of
the relevant credit entitlement certificate. They can be
the basic Regulation, because they are not consumed in
used for payment of custom duties on subsequent
the production of the exported products.
imports of any inputs or goods including capital goods.
(e) Calculation of the subsidy amount
(105) The credit entitlement certificate is issued from the port
(110) The amount of countervailable subsidies was calculated
from which the exports have been made and after real
on the basis of the benefit conferred on the recipient,
isation of exports or shipment of goods. As long as the
which is found to exist during the IP as booked by the
applicant provides to the authorities copies of all relevant
cooperating exporting producer on an accrual basis as
export documentation (e.g. export order, invoices,
income at the stage of export transaction. In accordance
shipping bills, bank realisation certificates), the GOI has
with Article 7(2) and 7(3) of the basic Regulation this
no discretion over the granting of the duty credits.
subsidy amount (numerator) has been allocated over the
export turnover during the IP as appropriate denomi
nator, because the subsidy is contingent upon export
performance and it was not granted by reference to the
(106) It was found that one of the sampled companies used
quantities manufactured, produced, exported or trans
this scheme during the IP.
ported.
(d) Conclusion on FMS
(111) The subsidy rate established with regard to this scheme
during the IP for the company concerned amounted to
(107) The FMS provides subsidies within the meaning of
0,13 %, 0,71 %, 0,07 %, 0 % for the companies of Venus
Article 3(1)(a)(ii) and Article 3(2) of the basic Regulation.
group respectively.

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L 126/30
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Official Journal of the European Union
8.5.2013
3.8. Special Economic Zones/Export Oriented Units (‘SEZ/EOU’)
(112) It was found that only one sampled company availed of the EOU scheme during the IP. However, the
investigation established that the level of countervailable subsidies found for this company is below de
minimis, thus EOU scheme was not analysed further.
3.9. Amount of countervailable subsidies
(113) Based on the findings, as summarised in the below table, the total amount of countervailable
subsidies, expressed ad valorem, were found to range from 3,15 % to 4,32 %:
Scheme Company Raajratna Venus
Group Viraj
DEPBS (*) 0,58
% 0,93
%,
1,04
%, —
1,32 %, 2,04 %
DDS (*) 0,61
% 1,14
%,
1,77
%, —
1,68 %, 1,91 %
AAS (*) 2,43
%
0,15 %, 0 %, 0 %, 0 %
—
EPCGS (*) 0,09
%
0,02 %, 0 %, 0 %, 0 % 0,63
%
ECS (*) 0,61
% 0,08
%,
0,28
%, —
0,03 %, 0,10 %
FMS (*)
— 0,13
%,
0,71
%, —
0,07 %, 0 %
EOU (*)
—
— 0,95
%
TOTAL 4,32
% 3,15
(**) 1,57
%
(***)
(*) Subsidies marked with an asterisk are export subsidies
(**) Total subsidy margin on the basis of consolidated calculation for the Group
(***) de minimis
(114) In accordance with Article 15(3) of the basic Regulation,
4.2. Union production
the subsidy margin for the cooperating companies not
included in the sample, calculated on the basis of the
(117) All available information concerning the Union industry,
weighted average subsidy margin established for the
such as information provided in the complaint, data
cooperating companies in the sample which had their
collected from Union producers before and after
individual subsidy margins above de minimis, is 3,82 %.
initiation of the investigation and the questionnaire
responses of the sampled Union producers, was used in
(115) With regard to all other exporters in India, the
order to establish the total Union production for the
Commission first established the level of cooperation.
investigation period.
The comparison between Eurostat import data and the
volume of exports to the Union of the product
concerned reported for the investigation period by the
(118) It should be mentioned that one Union producer related
cooperating companies or groups with exports of the
to an Indian exporting producer and which opposed the
product concerned to the Union during the investigation
initiation of the investigation is also included in the defi
period shows that the cooperation of Indian exporting
nition of the Union industry. On this basis, the total
producers was very high. Given this high level of cooper
Union production was estimated to be around 139 141
ation, the subsidy rate for all non-cooperating companies
tonnes during the IP. This figure includes the production
is set at the level for the company with the highest
of all Union producers that made themselves known and
individual rate, i.e. 4,32 %.
the estimated production volume of the rest of the Union
producers, which did not come forward in the investi
4. UNION INDUSTRY
gation.
4.1. Union industry
4.3. Sampling of Union producers
(116) The like product was manufactured by 27 Union
producers. They are deemed to constitute the Union
(119) As indicated in recital (14) above six regarding the Union
industry within the meaning of Article 9(1) and
producers were included in the sample representing
Article 10(8) of the basic Regulation and will hereinafter
46,5 % of the estimated total Union production of the
be referred to as the ‘Union industry’.
like product.

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5. INJURY
between 2010 and the IP, the import volume from India
continued increasing significantly by 22 % in the same
5.1. Union consumption
period.
(120) Union consumption was established on the basis of the
total sales volume of the Union industry on the Union
(124) The market share of subsidised imports from India has
market and the total imports. The year of 2009 was
increased significantly by 40
% during the period
marked by unprecedented high prices of nickel, the
considered.
main raw material used to produce the product
concerned and the like product, and the global negative
effects of the financial crisis, which together led to a
5.2.2. Prices of imports and price undercutting:
particularly low level of Union consumption in that
year. However, the market situation improved, as
(125) As explained above in recital (22) one party expressed
shown in the table below and Union consumption
concerns regarding the fact that the anti-subsidy ques
increased by 50 % between 2009 and the IP.
tionnaire did not allow to distinguish in particular
certain types of the product concerned, which in their
view are different.
2009 2010 2011 IP
(126) This concern was addressed in the questionnaire by
Consumption (in 131 436 187
280 196
476 197
327
enlarging the so-called product control numbers (PCN)
tonnes)
in ordrer to clearly identify the relevant types in the
investigation in particular for the price comparison
Index
100 142 149 150
(2009 = 100)
exercise. At this stage, the investigation revealed that
Indian exporting producers only exported limited quan
Source: Eurostat, complaint and questionnaire replies
tities of these highly technical types. Nevertheless, it is
pointed that the changes made in the PCN ensured that
prices of certain product types were compared directly
with the prices of similar product types.
5.2. Imports into the Union from the country
concerned
(127) The table below shows the average price of subsidised
(121) The import volumes of the cooperating companies, that
imports
based on the sample were found not to have benefited
from the subsidy schemes within the meaning of
Article 3(1)(a)(ii) and Article 3(2) of the basic Regulation
2009 2010 2011 IP
during the investigation period, were excluded from the
total imports from India. Since the import data relating
Average price 100 118 137 135
to the product concerned refer to two companies, it was
(Index)
considered appropriate for confidentiality reasons to
Source: Eurostat and questionnaire replies
show them in indexed form.
5.2.1. Volume and market share of the imports concerned
(128) The average import prices from India increased by 35 %
during the period considered, but they remained below
(122) During the period considered subsidised imports into the
the sales prices of the Union industry during the same
Union from the cooperating exporting producers were
period (see recital (145) below). This explains the surge
found to have developed in terms of volume and
in import volume and the significant increase by 40 % in
market share as follows:
the market share held by Indian exporters in the same
period.
2009 2010 2011 IP
(129) In order to determine the price undercutting during the
IP, the weighted average sales prices per product type of
Volume (Index) 100 172 218 210
the sampled Union producers charged to unrelated
Market share
100 121 146 140
customers on the Union market, adjusted to an ex-
(Index)
work level, were compared to the corresponding
weighted average prices per product type of the
Source: Eurostat, complaint and questionnaire replies
subsidised imports from the two Indian producers that
were sampled and received countervailable subsidies
above de mininis level to the first independent
customer on the Union market, established on a CIF
(123) Subsidised import volumes from India increased
basis, with appropriate adjustments for post-importation
considerably by 110 % over the period considered. The
costs.
increase was particularly marked between 2009 and
2010 when imports from India surged by 72 % and
when the Union consumption increased by 42 %.
(130) The result of the comparison, when expressed as a
However, whilst consumption only increased by 5 %
percentage of the sampled Union producers’ turnover

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during the IP, showed a weighted average undercutting
actual subsidy margin and recovery from past subsidis
margin of 12,5 % by the subsidised imports from the
ation, for which the data was collected at the level of the
country concerned on the Union market. The lower
total Union industry and on the basis of (b) micro-
prices of the subsidised imports compared to the
economic indicators, namely indicators such as average
Union ones during the period considered, explain the
unit prices, unit cost, profitability, cash flow, investments,
significant increase in Indian import volume and in the
return on investment and ability to raise capital, stocks
market share held by the imports from India between
and labour costs, for which the data was collected at the
2009 and the IP.
level of the sampled Union producers.
5.3. Economic situation of the Union industry
(134) It is noteworthy that all available information concerning
5.3.1. Preliminary remarks
the Union industry including information provided in the

complaint, data collected from the Union producers
(131) In accordance with Article 8(4) of the basic Regulation,
before and after the initiation of the investigation, and
the examination of the impact of the subsidised imports
the questionnaire responses of the sampled Union
from India on the Union industry included an evaluation
producers, was used in order to establish the macro-
of all economic indicators having a bearing on the state
economic indicators and in particular the data pertaining
of the Union industry during the period considered.
to the non-sampled Union producers.
(132) As mentioned in recital (14), sampling was used for the
(135) The micro-economic indicators were established on the
examination of the possible injury suffered by the Union
basis of information provided by the sampled Union
industry.
producers in their questionnaire replies.
(133) For the purpose of the injury analysis, the Commission
5.3.2. Macro-economic indicators
distinguished between macro-economic and micro-
economic injury indicators. In this regard, the
(a) Production, production capacity and capacity utili
economic situation of the Union industry is assessed
sation
on the basis of (a) macro-economic indicators, namely
indicators such as production, production capacity,
(136) The trends for Union production, production capacity
capacity utilisation, sales volume, market share and
and the utilization of the capacity developed as follows
growth, employment, productivity, magnitude of the
during the period considered:
2009 2010 2011 IP
Production volume (tonnes) 105
646 140
363 138
795 139
141
Index (2009 = 100) 100 133 131 132
Production capacity
244 236 246
324 245
922 246
599
(tonnes)
Index (2009 = 100) 100 101 101 101
Capacity utilization 43
% 57
% 56
% 56
%
Index (2009 = 100) 100 132 130 130
Source: Complaint, questionnaire replies
(137) Union production increased by 32 % during the period considered reflecting to a certain extent the
positive evolution of consumption. Production volumes, however, stagnated between 2010 and
the IP.
(138) Whilst capacity utilization improved and increased by 13 percentage points during the period
considered, production capacity remained fundamentally stable during the period considered.
(b) Sales volume, market share and growth
(139) The trends concerning sales volumes, market share and growth developed as follows during the
period considered:

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2009 2010 2011 IP
Sales volume (tonnes) 88
796 124
641 124
007 124
217
Index (2009 = 100) 100 140 140 140
Market share 67,6
% 66,6
% 63,1
% 62,9
%
Index (2009 = 100) 100 98 93 93
Source: Complaint, questionnaire replies
(140) After a considerable increase between 2009 and 2010, in
(d) Magnitude of the actual subsidy margin and recovery
the context of an increasing consumption, the sales
from past subsidisation
volume to unrelated customers slowed down and did
not benefit from the continued increase in demand
(143) The subsidy margins of two of the sampled Indian
(4,9 % between 2010 and 2011). This is also reflected
exporting producers are above the de minimis level (see
in the upward trend of closing stocks, which increased
recital (113) above). Given the sector of the product
overall by 41 % during the period considered as shown
concerned, the volume, market share and prices of the
in recital (153) below. Furthermore, the Union industry
subsidised imports from India, discussed above, the
market share decreased by 4,7 percentage points during
impact on the Union industry of the actual subsidy
the period considered despite the steady increase of 50 %
margin cannot be considered to be negligible.
in consumption.
(144) It is recalled that in 1999 anti-dumping and anti-subsidy
(141) As indicated in recital (120) above, the Union
countervailing measures were imposed on the product
consumption was growing with 50 % between 2009
concerned. However, given the time lap between the
and the IP, while the volume of subsidised imports
expiry of the measures that were introduced in 1999
increased significantly, by 110 % during the same
and the current investigation, there is no data available
period, as indicated in recital (122)(123) above. The
to assess the effect of the past subsidization ( 1 ). The
growth of the Union market between 2009 and the IP
investigation in any case did not bring forward any
was therefore partially absorbed by subsidised imports,
evidence that the industry is still recovering from the
while the Union sales of the Union industry grew by
past subsidisation.
40 % during the same period. This shows that Union
industry could not fully benefit from the growth in
5.3.3. Micro-economic indicators
Union consumption due to the increasing market share
of subsidised imports.
(e) Average unit selling prices on the Union market and
unit cost of production
(c) Employment and productivity
(145) During the period considered the average unit selling
price and the cost of production of the Union
2009 2010 2011 IP
producers developed as follows:
Number of
1 726 1
687 1
729 1
747
employees
2009 2010 2011 IP
Index
100 98 100 101
Average unit
2 988 3
833 4
185 4
018
(2009 = 100)
selling price in
the Union to
Productivity
61 83 80 80
unrelated
(unit/employee)
customers
Index
100 128 140 134
Index
100 136 131 130
(2009 = 100)
(2009 = 100)
Unit cost of 3 542 3
931 4
127 4
011
Source: Complaint, questionnaire replies
production (EUR/
tonne)
Index
100 111 117 113
(2009 = 100)
(142) Notwithstanding the difficult financial situation described
in recitals (147) - (152) below, the employment of the
Source: Questionnaire replies
Union industry remained relatively stable during the
period considered. Given the increased production
volume (see recital (136) above), productivity as
( 1 ) Council Regulation (EC) No 1599/1999, OJ L 189, 22.7.1999,
measured as output in tonnes per person employed per
p. 126; Council Regulation (EC) No 1600/1999, p. 19, OJ L 189,
year increased by 30
% during the same period
22.7.1999, p. 19 and Council Regulation (EC) No 1601/1999, OJ
L 189, 22.7.1999, p. 1 Council Regulation (EC) No 1599/1999 of
suggesting that the Union industry made significant
12 July 1999 and Council Regulation (EC) No 1601/1999 of
efforts to improve its efficiency.
12 July 1999, OJ L 189 22.7.1999

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(146) The average sales prices of the sampled Union producers
increase in sales price did not allow the Union industry
to unrelated customers in the Union increased by 34 %
to achieve a reasonable level of profit.
over the period considered. The rise reflects the general
increase in the cost of raw material experienced by the
industry during the same period. In 2011 and during the
(f) Profitability, cash flow, investments, return on
IP the Union producers could only moderately increase
investments and ability to raise capital
the prices to cover the increasing costs of production,
enough just to keep profitability slightly above 1 % in
(147) During the period considered the profitability, the cash
2011 and at break-even level in the IP. Thus, as the
flow, the return on investment and their ability to raise
figures show in the table above, even a significant
capital of the Union producers developed as follows:
2009 2010 2011 IP
Profitability of sales in the Union to
– 18,5 % –
2,6
% 1,4
% 0,2
%
unrelated customers (% of sales turnover)
Cash flow (EUR) –
19
790
367 –
226
207 7
778
576 5
096
869
Investments (EUR) 4
653
604 8
436
096 4
552
443 4
156
522
Index (2009 = 100) 100 181 98 89
Return on investments –
68,8
% –
11,2
% 6,7
% 0,8
%
Source: Questionnaire replies
(148) The profitability of the sampled Union producers was
(151) The evolution of profitability and cash flow during the
established by expressing the pre-tax net profit of the
period considered limited the ability of the sampled
sales of the like product to unrelated customers as a
Union producers to invest in their activities and
percentage of the relevant turnover. In 2009, the
undermined their development. As a consequence, the
sampled Union producers were loss making but started
ability of the Union producers to raise capital and
to recover in 2010 in line with the increase by 50 % in
finance costs was hindered. Although the sampled
consumption described in recital (120) above. However,
Union producers managed to make some investments
even if profitability slightly increased, profit levels at
in 2010, they dropped thereafter and in particular
0,2 % were still far below a reasonable level of profit
during the IP when they decreased by 51 % compared
ability in the steel sector. Indeed, the target profit margin
to 2010 levels. Moreover, even if the return on
was provisionally set at 5 %, because it is considered that
investment related to the like product, expressed as the
it corresponds to the margin that could be reasonably
profit in percentage of the net book value of investments,
achieved by an industry of this type in the sector of the
became positive in 2011, it decreased considerably, by
product investigated under normal conditions of
5,9 percentage points during the IP, reaching a low level
competition, i.e. in the absence of subsidised imports,
of 0,8 %.
on sales of the like product in the Union as indicated
by the Union industry. Furthermore, this 5 % is a pre-tax
profit margin which was considered as an appropriate
(152) In light of the above, it can be concluded that the
minimum in other investigation into similar products
financial performance of the sampled Union producers
in the same sector.
remained somewhat fragile during the IP.

(g) Stocks
(149) During the IP the sampled Union producers managed to
break even; however, the price pressure exerted by
(153) The level of stocks of the sampled Union producers
subsidised imports prevented them from aligning their
increased by 41 % during the period considered; their
prices with costs and thus to achieve satisfactory
increase coincided with losses in market share, in
results. This situation is also explained by the fact that
particular during the IP.
the product under investigation is considered to be a
commodity, and thus prices are the main factor, which
is driving customer’s choices.
2009 2010 2011 IP
Closing stocks 4 395 5
289 5
469 6
214
(tonnes)
(150) Cash flow, which is the ability of the industry to self-
finance its activities and which was calculated on the
Index
100 120 124 141
basis of operations, was negative until 2010. Although
(2009 = 100)
it improved in 2011, it decreased by 34 % between 2011
Source: Questionnaire replies
and the IP.

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(h) Labour costs
Union industry, were also examined to ensure that the
possible injury caused by these other factors was not
(154) The average labour costs of the sampled Union producers
attributed to the subsidised imports.
increased modestly during the period considered, and
therefore they do not represent a determining factor in
the rise of cost of production.
6.2. Effect of the subsidised imports
(160) The investigation showed that the Union consumption
2009 2010 2011 IP
increased by 50 % over the period considered and at
the same time the volume of imports originating in
Average labour 52 356 57
182 55
907 54
509
India more than doubled. On the other hand, the
costs per
increase of subsidised imports coincided with a
employee (EUR)
slowdown in the sales volume of the Union industry to
Index
100 109 107 104
unrelated parties between 2010 and the IP.
(2009 = 100)
Source: Questionnaire replies
(161) With regard to the price pressure prevailing on the
Union market during the period considered, it was
found that the average import prices from India
remained constantly lower than the average sales prices
5.4. Conclusion on injury
of the Union industry. By undercutting the Union
industry on average by 12,5 % during the IP, Indian
(155) The investigation showed that the Union industry did not
subsidised imports increased their market share from
fully benefit from the increase in consumption during the
2009 to the IP by 40 %, whilst the market share of
period considered and in particular during the IP.
the Union industry decreased by 4,7 percentage points
Initially, between 2009 and 2010, most of the injury
(from 67,6 % in 2009 to 62,9 % in the IP). The loss in
indicators pertaining to the Union industry largely
market share reveals that the Union industry could only
improved but, subsequently, its economic situation
benefit from the increased consumption to a limited
stagnated or even deteriorated.
extent.
(156) Indeed, in the context of a booming market, certain
indicators such as production and sales volume of the
(162) In view of the increasing cost of production, the Union
industry tried to increase the unit price to unrelated
Union industry increased significantly between 2009 and
customers as shown in recital (145) above. However,
2010 but then registered a slowdown from 2010
due to the price pressure exerted by the increasing
onwards. This situation occurred despite a continued
volumes of subsidised Indian imports as stated above,
increase in consumption.
the price increase was not sufficient to sustain the
growing costs, thus the Union industry could not reach
(157) Furthermore, the injury indicators related to the financial
satisfactory profit levels that could be considered
performance of the Union industry such as cash flow,
necessary for this particular industry.
investment and profitability were seriously affected by
the price pressure which prevailed in the Union
market, in particular during the IP. The Union industry
(163) Based on the above, it is concluded that the surge of
was not able to increase its prices sufficiently in order to
subsidised imports from India at prices constantly under
cover its costs of production between 2009 and 2010.
cutting those of the Union industry have had a deter
Profitability was improving between 2009 and 2011 by
mining role for the material injury suffered by the Union
making a slight profit of 1,4 % in 2011; however, it
industry.
started deteriorating again during the IP when it
reached only a breakeven level. This means that the
ability of the Union industry to raise capital and
6.3. Effect of other factors
recover was also undermined.
6.3.1. Non subsidized imports
(164) The table below shows the development of the non-
(158) In light of the foregoing, it is provisionally concluded
subsidised export volume and prices during the period
that the Union industry suffered material injury within
considered. Their volume represented less than one third
the meaning of Article 8(5) of the basic Regulation.
of Indian exports during the IP and followed the same
trend as the subsidized imports.
6. CAUSATION
6.1. Introduction
2009 2010 2011 IP
(159) In accordance with Article 8(5) and (6) of the basic
Volume (Index) 100 172 218 210
Regulation, the Commission examined whether the
subsidised imports from India had caused injury to the
Average price 100 118 137 135
Union industry to a degree sufficient to be considered as
(Index)
material. Known factors other than the subsidised
Source: Questionnaire replies
imports, which could at the same time be injuring the

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(165) Based on these facts, it is considered that the possible negative impact the non-subsidized imports
may have had on the Union market was not such as to break the causal link between the subsidised
imports, from India and the injury suffered by the Union industry during the IP.
6.3.2. Imports from third countries
Country 2009 2010 2011 IP
The PRC Volume
(tonnes) 8
129 10
853 14
360 16
403
Index (2009 = 100) 100 134 177 202
Market share (%) 6,2
% 5,8
% 7,3
% 8,3
%
Index (2009 = 100) 100 94 118 134
Av. price 1
914 2
607 2
835 2
508
Index (2009 = 100) 100 136 148 131
2009 2010 2011 IP
Switzerland Volume
(tonnes) 8
094 10
700 9
187 9
115
Index (2009 = 100) 100 132 113 113
Market share (%) 6,2
% 5,7
% 4,7
% 4,6
%
Index (2009 = 100) 100 93 75 75
Av. price 3
423 4
063 4
475 4
360
Index (2009 = 100) 100 119 131 127
The Republic of Korea
Volume (tonnes) 4
900 6
775 6
355 6
266
Index (2009 = 100) 100 138 130 128
Market share (%) 3,7
% 3,6
% 3,2
% 3,2
%
Index (2009 = 100) 100 97 87 85
Av. price 3
717 4
165 4
761 4
627
Index (2009 = 100) 100 112 128 124
Total of all third
countries except India
Volume (tonnes) 25
793 33
586 35
749 37
712
Index (2009 = 100) 100 130 139 146
Market share (%) 19,6
% 17,9
% 18,2
% 19,1
%
Index (2009 = 100) 100 91 93 97
Av. price 3
609 4
214 4
748 4
483
Index (2009 = 100) 100 117 132 124

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(166) Apart from the subsidised imports from India that
market in the same period. Based on this, it can be
constituted 35 % of all imports into the Union market
concluded that the export activity of the Union
during the IP, there were other sources of imports,
industry could not be a potential cause of material injury.
including the People’s Republic of China, Korea and Swit
zerland, that had to be examined in the context of the
causal link.
6.3.4. The economic crisis and prices of raw materials
(173) As mentioned in recital (120) above, consumption in
(167) The investigation showed that the average sales prices of
2009 was particularly low due to the exceptional high
Korean and Swiss exporting producers remained above
price level of nickel and the effects of the economic
the sales prices of the Indian exporting producers and
crisis. This situation certainly explains the particularly
those of the Union industry during the period considered
bad financial state of the Union industry in 2009.
and in particular during the IP. Moreover, their market
However, it is noteworthy that in the situation of
share decreased by 0,5 and 1,6 percentage points
growing consumption from 2010 onwards the
respectively during the IP.
performances of the low-priced subsidised imports
contrast with that of the Union industry.
(168) The average price from the People’s Republic of China
was below the price level of the Union industry and that
(174) The investigation showed that even during the general
country’s market share showed an increasing trend
economic recovery, the Union industry was unable to
during the period considered. However, the investigation
benefit from the growing consumption and was loosing
showed that the product mix represented by the Chinese
market share throughout the period considered, whereas
imports is different and that Chinese products are not in
the subsidised Indian exports gained more market share.
direct competition with the ones of the Union industry
or those of Indian origin in the Union market. It was
therefore considered that the Chinese exports could not
(175) Therefore, although the economic crisis and the increase
have had a significant impact on the core product types
in the prices of the raw materials may have contributed
sold by the Union industry in the Union market. Hence,
to the Union industry’s poor performance, overall, it
any effect the imports from China may have had on the
cannot be considered to have an impact such as to
injury suffered by the Union industry was minimal.
break the causal link between the subsidised imports

and the material injury that the Union industry suffered
during the IP.
(169) Nevertheless, an exporting producer claimed that imports
of stainless steel wires from the People’s Republic of
6.4. Conclusion on causation
China, the Republic of Korea and Switzerland should
have been included in the scope of this investigation.
(176) It has been demonstrated that there was a substantial
increase in the volume and market share of the
subsidised imports originating in India in the period
(170) In addition to the facts and considerations given above, it
considered (by 110 % and by 40 % respectively). In
should be noted that, at initiation stage and up to now,
addition, it was found that these imports were constantly
there is no evidence of subsidisation, injury and or causal
undercutting the prices charged by the Union industry on
link which would have justified the initiation of an anti-
the Union market and in particular during the IP (on
subsidy proceeding concerning imports originating in the
average by 12,5 %).
abovementioned countries. Moreover, even if there would
be evidence to justify investigating other imports, a
difference in treatment which consists of opening an
(177) This increase in volume and market share of the
anti-subsidy proceeding against Indian imports only
subsidised imports from India coincided with the slow
would not qualify as discriminatory. The claim that
development of the financial situation of the Union
these countries should have been included in the scope
industry in particular as of 2010. Thus, despite the
of the investigation is therefore not founded and should
recovery in consumption, the Union industry was
be rejected.
unable to pass on the increase in cost of production to
its customer to a satisfactory level and consequently
financial indicators such as profitability, cash flow and
(171) On the basis of above, it is concluded that exports from
investment remained at low levels.
third countries did not contribute significantly to the
injury suffered by the Union industry.
(178) The examination of the other known factors which could
have caused injury to the Union industry revealed that
6.3.3. Export performance of the Union industry
these factors were not such as to break the causal link
established between the subsidised imports from India
(172) The total exports of the product concerned by the Union
and the injury suffered by the Union industry.
industry represented 8,5 % of total production in the IP.
This picture is mirrored by exports to unrelated
customers by the sampled Union producers whose
(179) Based on the above analysis, which had distinguished and
exports represented 7 % of production in the IP and
separated the effects of all known factors on the situation
prices were 36 % higher than the one in the EU
of the Union in industry from the injurious effects of the

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subsidised exports, it is provisionally concluded that the
situation. The imposition of measures would enable the
subsidised imports from India have caused material
industry to maintain and further develop its efforts to be
injury to the Union industry within the meaning of
cost efficient.
Article 8(5) of the basic Regulation.
(187) Should measures not be imposed, further losses in
market share could be expected and the Union industry’s
7. UNION INTEREST
profitability would deteriorate.
7.1. General considerations
(180) In accordance with Article 31 of the basic Regulation it
(188) It is, therefore, provisionally concluded that the
has been examined whether, despite the provisional
imposition of anti-subsidy measures on imports orig
finding of injurious subsidisation, compelling reasons
inating in India would be in the interest of the Union
exist for concluding that it is not in the Union interest
industry.
to adopt measures in this particular case. The analysis of
the Union interest was based on an appreciation of all
7.3. Interest of users
the various interests involved, including those of the
Union industry, importers, and users.
(189) Questionnaires were sent to nine users in the Union.
Only three replied to the questionnaires representing
around 6 % of total imports from India of the product
7.2. Interest of the Union industry
concerned during the IP. They are present in sectors
regarding food processing including commercial
(181) The Union industry is composed of 27 known producers
kitchens and catering, home appliances, automotive
representing all of the Union production of the like
industry.
product. The producers are located in different Member
States of the Union, employing directly 1 747 people in
relation to the like product during the IP.
(190) On average, purchases from India constituted around
67 % of their total purchases of the product concerned,
and India represented the exclusive source of supply only
(182) One Union producer, representing a relatively small share
for one user. During the IP, the average percentage of the
of the Union production and having a related company
turnover incorporating the product concerned repre
in India opposed the initiation of the investigation. As
sented 54 % of their total turnover.
mentioneed in recital (22), it also argued that the highly
technical products should not be covered and that it was
not in the Union interest to impose the same measures
(191) The investigation showed that, during the IP, the average
on this product type.
profitability of all cooperating users in the sectors which

use the product concerned was above 9 % on turnover.
(183) As mentioned in recital (126) this concern was addressed
(192) The likely effect of the proposed measures was assessed
in the questionnaire by enlarging the PCNs which clearly
on the basis of questionnaire replies received from the
identified these types in the investigation. However, at
users and the total Union market for the product
this stage, the investigation revealed that highly
concerned and the like product. Assuming the worst
technical products were covered by the investigation
case scenario for the Union market, i.e. that no price
and that Indian exporting producers only exported
increase could be passed on to the distribution chain
limited quantities of these product types. Hence, the
and that the users would continue purchasing from
concerns expressed by this producer were not considered
India in previous volumes, the impact of the duty on
to be founded and its claim were rejected.
the users’ profitability would mean a decrease of
around 0.2 percentage points.
(184) It has been established that the Union industry suffered
material injury caused by the subsidised imports from
(193) It has to be noted that one user had a neutral position
India. It is recalled that the Union industry could not
regarding the investigation, because it considers that the
fully benefit from the growing consumption and the
imposition of measures will have no significant effect on
financial situation of the Union industry remained fragile.
the market prices as the potential price increase would be
absorbed by the distributors.
(185) It is expected that the imposition of countervailing duties
(194) Another user expressed concerns that, if imposed,
will restore fair trade conditions on the Union market,
measures would hit also certain product types that are
allowing the Union industry to align its prices of the like
no longer produced in the Union. The investigation
product to the costs of production.
showed, however that the product types reffered to by
the said user are still produced in the Union and that the
demand of those types of stainless steel grades is not
(186) It can also be expected that the imposition of measures
significant. Moreover, it should be noted that the
will enable the Union industry to regain at least part of
Union producers did not produce at full capacity
the market share lost during the period considered, with
during the period considered, and therefore if demand
a positive impact on its profitability and overall financial
increases the production could follow accordingly.

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EN
8.5.2013 Official
Journal
of
the
European
Union L
126/39
(195) It should be pointed out that since the product
found and the amount of duty necessary to eliminate the
concerned is standardised in terms of sector and use,
injury suffered by the Union industry.
users could easily change their sources of supply as far
as the product quality, or price is concerned. The
imposition of measures should not preclude the possi
(204) When calculating the amount of duty necessary to
bility for importing the product concerned from other
remove the effects of the injurious subsidisation, it was
countries and even from India once trade distorting
considered that any measure should allow the Union
effects due to subsidization have been removed.
industry to cover its costs of production and obtain a
profit before tax that could be reasonably achieved by an
(196) Taken the above into consideration, even if certain users
industry of this type in the sector under normal
are likely to be impacted more negatively than others by
conditions of competition, i.e. in the absence of
the measures on Indian imports, the overall impact on
subsidised imports, on sales of the like product in the
users is considered limited.
Union.
7.4. Interest of importers
(205) Therefore, the injury elimination level was calculated on
(197) Limited cooperation was obtained from unrelated
the basis of a comparison of the weighted average price
importers. Nine importers provided sampling
of the subsidised imports, as established for the price
information, but only one cooperated. This company
undercutting calculations in recital (130) above, and the
accounted for around 7 % of total imports from India
non-injurious price of the Union industry for the like
during the IP. The company opposes the imposition of
product. The non-injurious price was established by
measures since India is by far its most important
adding to the cost of production a reasonale profit
supplier. Although the imposition of measures would
level. The target profit margin was provisionally set at
have a negative impact on its profitability due to the
5 % as stated in recital (148).
higher costs to be incurred, the importing company
should be in a position to pass on at least part of the
increased cost to its customers.
(206) Any difference resulting from this comparison was then
expressed as a percentage of the average total CIF import
price see recital (208).
(198) Furthermore, importers could shift to other sources
including the Union industry and other exporting coun
tries.
8.2. Provisional measures
(199) On this basis, it is provisionally concluded that the
(207) In the light of the foregoing, it is considered that, in
imposition of countervailing measures will not have
accordance with Article 12(1) of the basic Regulation,
substantially negative effects on the interest of importers.
provisional countervailing measures should be imposed
in respect of imports originating in India at the level of
the lower of the subsidy and injury margins, in
7.5. Conclusion on Union interest
accordance with the lesser duty rule.
(200) In view of the above, it is provisionally concluded that
overall, based on the information concerning the Union
interest, there are no compelling reasons against the
(208) On the basis of the above, the countervailing duty rates
imposition of measures on imports of the product
have been established by comparing the injury and
concerned from India.
subsidy margins. Consequently, the proposed provisional
countervailing duty rates are as follows:
(201) Moreover, when considering the overall impact of the
anti-subsidy measures on the Union market, the
positive effects, in particular on the Union industry,
Injury
Provisional
appear to outweigh the potential negative impacts on
Company
Subsidy
margin
margin
countervailing
duty rate
the other more limited interest groups.
Rajaraatna Metal Indus
4,3 % 17,2
% 4,3
%
tries
8. PROPOSAL FOR PROVISIONAL COUNTERVAILING
MEASURES
Venus group 3,1
% 26,1
% 3,1
%
(202) In view of the conclusions reached with regard to
Viraj Profiles Vpl. Ltd. 1,5
% 32,1
% 0,0
%
subsidisation, injury, causation and Union interest,
provisional countervailing measures should be imposed
Cooperating non-
3,8 % 20,4
% 3,8
%
in order to prevent further injury being caused to the
sampled companies
Union industry by the subsidised imports.
All other companies 4,3
% 26,1
% 4,3
%
8.1. Injury elimination level
(209) As concerns the parallel anti-dumping investigation,
(203) For the purpose of determining the level of these
purusant to Article 24(1), second subparagraph of the
measures, account was taken of the subsidy margins
basic Regulation and Article 14(1) of Council regulation

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L 126/40
EN
Official Journal of the European Union
8.5.2013
(EC) No 1225/2009 of 30 November 2009 on
HAS ADOPTED THIS REGULATION:
protection against dumped imports from countries not
members of the European Community ( 1 ) no product
shall be subject to both anti-dumping and coutervailing
Article 1
duties for the purpose of dealing with the one and the
same situation arising from dumping and from export
1. A
provisional
countervailing
duty
is
hereby
imposed
on
subsidisation. As concerns the subsidy schemes, as stated
imports of wire of stainless steel containing by weight:
under recitals (29) to (112), all schemes refer to export
subsidisation. The relevant provisional anti-dumping duty
— 2,5 % or more of nickel, other than wire containing by
rates of the cooperating producers concerned will be
weight 28 % or more but not more than 31 % of nickel
adjusted accordingly in the parallel anti-dumping investi
and 20 % or more but not more than 22 % of chromium,
gation.
— less than 2,5 % of nickel, other than wire containing by
(210) The individual company countervailing duty rates
weight 13 % or more but not more than 25 % of
specified in this Regulation were established on the
chromium and 3,5 % or more but not more than 6 % of
basis of the findings of the present investigation.
aluminium,
Therefore, they reflect the situation found during this
investigation with respect to these companies. These
duty rates (as opposed to the country-wide duty rate
currently falling within CN codes 7223 00 19 and 7223 00 99
applicable to 'all other companies') are thus exclusively
and originating in India.
applicable to imports of the product concerned orig
inating in India and produced by the companies and
thus by the specific legal entities mentioned. Imported
2. The
rates
of
the
provisional
countervailing
duty
applicable
product concerned produced by any other company
to the net, free-at-Union-frontier price, before duty, of the
not specifically mentioned in the operative part of this
product described in paragraph 1 and produced by the
Regulation, including entities related to those specifically
companies below shall be:
mentioned, cannot benefit from these rates and shall be
subject to the duty rate applicable to 'all other
companies'.
Company
Duty
TARIC
(%)
additional code
(211) Any claim requesting the application of these individual
Raajratna Metal Industries, Ahmedabad, 4,3 B775
company countervailing duty rates (e.g. following a
Gujarat
change in the name of the entity or following the
Venus Wire Industries Pvt. Ltd, Mumbai, 3,1 B776
setting up of new production or sales entities) should
Maharashtra
be addressed to the Commission ( 2 ) forthwith with all
relevant information, in particular any modification in
Precision Metals, Mumbai, Maharashtra 3,1 B777
the company's activities linked to production, domestic
and export sales associated with, for example, that name
Hindustan Inox Ltd., Mumbai, Maharashtra 3,1 B778
change or that change in the production and sales
Sieves Manufacturer India Pvt. Ltd., Mumbai,
3,1 B779
entities. If appropriate, the Regulation will accordingly
Maharashtra
be amended by updating the list of companies benefiting
from individual duty rates.
Viraj Profiles Vpl. Ltd., Thane, Maharashtra 0,0 B780
Companies listed in the Annex 3,8 B781
(212) In order to ensure a proper enforcement of the anti-
subsidy duty, the residual duty level should not only
All other companies 4,3 B999
apply to the non-cooperating exporting producers but
also to those producers which did not have any
exports to the Union during the IP.
3. The release for free circulation in the Union of the
product referred to in paragraph 1 shall be subject to the
provision of a security equivalent to the amount of the
9. FINAL PROVISION
provisional duty.
(213) In the interests of sound administration, a period should
be fixed within which the interested parties which made
4. Unless
otherwise
specified,
the
provisions
in
force
themselves known within the time limit specified in the
concerning customs duties shall apply.
notice of initiation may make their views known in
writing and request a hearing. Furthermore, it should
be stated that the findings concerning the imposition
Article 2
of countervailing duties made for the purposes of this
Regulation are provisional and may have to be recon
1. Without
prejudice
to
Article
30
of
Council
Regulation
sidered for the purposes of any definitive findings,
(EC) No 597/2009, interested parties may request disclosure
of the essential facts and considerations on the basis of which
this Regulation was adopted, make their views known in writing
( 1 ) OJ L 343, 22.12.2009, p. 51.
( 2 ) European Commission, Directorate-General for Trade, Directorate H,
and apply to be heard orally by the Commission within one
N105, 8/20 1049 Brussels, Belgium.
month of the date of entry into force of this Regulation.

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EN
8.5.2013 Official
Journal
of
the
European
Union L
126/41
2. Pursuant
to
Article
31(4)
of
Council
Regulation
(EC)
No
597/2009,
the
parties
concerned
may
comment on the application of this Regulation within one month of the date of its entry into force.
Article 3
This Regulation shall enter into force on the day following that of its publication in the Official Journal of the
European Union.
Article 1 of this Regulation shall apply for a period of four months.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 3 May 2013.
For the Commission
The President
José Manuel BARROSO

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L 126/42
EN
Official Journal of the European Union
8.5.2013
ANNEX
Indian cooperating exporting producers not sampled
TARIC Additional Code B781
Company name City
Bekaert Mukand Wire Industries Lonand,
Tal.
Khandala,
Satara
District,
Maharastra
Bhansali Bright Bars Pvt. Ltd. Mumbai,
Maharashtra
Bhansali Stainless Wire Mumbai,
Maharashtra
Chandan Steel Mumbai,
Maharashtra
Drawmet Wires Bhiwadi,
Rajastan
Garg Inox Ltd Bahadurgarh,
Haryana
Jyoti Steel Industries Ltd. Mumbai,
Maharashtra
KEI Industries New
Delhi
Macro Bars and Wires Mumbai,
Maharashtra
Mukand Ltd. Thane
Nevatia Steel & Alloys Pvt. Ltd. Mumbai,
Maharashtra
Panchmahal Steel Ltd. Dist.
Panchmahals,
Gujarat

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Document Outline

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