India: Finance Ministry rejects plan to impose safeguard duty on optical fibre

16/04/2021 12:00 - 72 Views

The finance ministry has rejected a recommendation by the Directorate General of Trade Remedies (DGTR) under the commerce ministry to impose a 10% safeguard duty on importing single-mode optical fibre that is used mainly to provide broadband services.

“The central government examined the recommendation of the designated authority (DGTR) and decided not to impose the safeguard measure," India informed the World Trade Organization (WTO) on 30 March.

Domestic producers Sterlite Technologies Ltd and Birla Furukawa Fibre Optics Pvt. Ltd had complained about the surge in fibre imports in July 2019.

The DGTR investigated the matter and, in August 2020, recommended a 10% safeguard duty for one year to protect the domestic industry from serious injury caused by increased imports.

Optical fibre is imported from countries, including China, Japan, the US and South Korea. Imports of optical fibre increased by 271% in 2018-19 and 243% in January 2019 to June 2019 from the base year 2016-17. In 2020, China remained the top exporter of optical fibre to India, followed by Japan, South Korea and the US.

While anti-dumping duty is imposed against a specific country if there is a sudden drop in the price of an imported item, safeguard duty is not country-specific, and a sudden surge in imports irrespective of a price drop is considered to be a fit case to safeguard interests of domestic industry.

The applicants had submitted that imports of optical fibre increased significantly in 2018-19 and had remained at the increased levels in the most recent period of January-June 2019.

They claimed that they were not able to compete with the imports and regain their market share, forcing them to close down or keep part of their production facilities idle, and requested imposition of provisional safeguard duty to mitigate their injury.

Source: Mint