Telecom service companies heave a sigh of relief.

As a result of the court ruling, the decision to impose a provisional anti-dumping duty of 236 per cent on imports will be nullified.

The Andhra Pradesh High Court has set aside the anti-dumping investigation initiation order by the Union Government on import of SDH (Synchronous Digital Hierarchy) equipment by the telecom industry. The equipment also finds use in IT and IT-enabled Services (ITES) companies.

SDH is an international standard used for combining multiple voice, video and data signals into a single stream for transmitting over optical fibre cable. They are available in different sizes, depending on capacity. While STM-1 has 155 Mbps capacity, STM-4 has 622 Mbps, STM-16 has 2.5 Gbps and STM-64 10 Gbps.

Acting on a petition by the Hyderabad-based Vuppulamritha Magnetic Components Ltd (VMC), the Court also set aside the preliminary findings of the designated authority in September 2009, which found that the subject goods from China and Israel had entered the Indian market at prices less than normal values in their domestic markets.

The findings also ruled that the dumping margins of the subject goods were substantial and that the domestic industry suffered losses.

As a result of the court ruling, the decision to impose a provisional anti-dumping duty of 236 per cent on imports will be nullified. Telecom service companies feel that it will mean a big relief for them.

The initiation of anti-dumping investigation early last year was the result of a complaint from Tejas Networks, a telecom products and research company, which demanded such investigation into import of certain telecom equipment. Tejas alleged that foreign manufacturers had dropped prices between 60 per cent and 75 per cent over their quoted prices in one year, posing a threat to the domestic industry.

Responding to an invitation by the designated authority, several telecom service providers including Tata Teleservices and BSNL argued against the levy of the anti-dumping duty on imports. The issue has also a bearing on some IT and ITES companies.

Tata Teleservices had written to the Ministry of Finance in October 2009, stating that no examination had been undertaken to determine if there were other producers in India for such parts, components and accessories, while recommending the duties.

Interestingly, the Government-owned BSNL wanted the authorities not to proceed with the investigation which might hurt healthy competition.

It said the complainant had no locus standi to seek investigation.

In a letter to the Ministry of Commerce and Industry, it pointed out that while Tejas had been dealing with one STM product, it had sought investigation into another STM product.

The legal tangle, however, is not likely to get over soon, with people following the issue feeling that the High Court order might be challenged.

K.V. Kurmanath

Hyderabad, March 12