Re-quantification of duties through midterm review: Indian approach
Authors: Aastha Gupta, Joint Partner and Salil Arora, Associate
In India, midterm reviews are governed by the provisions of Rule 23 of the Anti-Dumping Rules. The Directorate General of Trade Remedies (DGTR) usually conducts midterm reviews if:
- there is a change in circumstances due to which continuation of duties is no longer warranted;
- there is a change in circumstances due to which the quantum of duty needs to be modified; or
- there is a need for clarifying the product scope further, or to modify the product scope to exclude any particular product type.
The DGTR used to conduct midterm reviews even for situations where there was a change in the name of the exporter. However, by virtue of Trade Notice 12/2018, the DGTR simplified the procedure for requesting name changes. Under this Notice, the DGTR allowed certain types of name changes to be considered without the need to conduct a comprehensive midterm review.
In the past, when an interested party requested the re-quantification of duty, the DGTR also examined the need for continuation of duty in any midterm review that was initiated pursuant to the request. For example, in the case of caustic soda imported from Saudi Arabia, Korea and the United States, domestic producers sought a midterm review requesting the enhancement of duty. However, in the final findings dated 7 July 2011, the DGTR did not only examined the need for re-quantification of duty, but also whether the continuation of duty was warranted.
Recently, through an office memorandum dated 18 June 2019, the DGTR prescribed that any interested party could seek re-quantification of duty or alteration of form of duty through a review, and that the review would entail an examination that included, among other things:
- dumping margin;
- injury margin;
- subsidy margin; and
- landed price.
Pursuant to this memorandum, JJF Castings Limited, Maxion Wheels Aluminium India Private Limited and Steel Strips Wheels Limited filed an application for the initiation of a limited midterm review investigation, requesting the re-quantification of the quantum of duty.
Based on the prima facie evidence provided by the applicants, the DGTR initiated a midterm review limited to the need for examining the quantum of anti-dumping duty. Since in the preceding investigation, the DGTR had conducted sampling and determined duty for all cooperative producers based on the dumping margin of one exporter, the Dicastal Group, the scope of review was limited only to the Dicastal Group and other cooperative non-sampled exporters.
In its final findings dated 30 August 2022, the DGTR noted that since the investigation was a limited midterm review for re-quantification and enhancement of anti-dumping duty imposed on the exports of the Dicastal Group, the product scope could not be reviewed. The DGTR also concluded that the examination of aspect of injury to the domestic industry was outside the scope of the limited midterm review.
The DGTR also noted that, while the Dicastal Group did not participate in the mid-term review, the non-sampled cooperative producers that were awarded duties based on the margins determined for the Dicastal Group in the previous investigation did participate in the review. These producers could not be punished for non-cooperation of the Dicastal Group. They were hence awarded duties based on their responses.
However, where the volume of exports by an exporter was too low, it was considered that such volume of exports could not form the basis for determining whether re-quantification of duty was warranted. Therefore, the existing duty on these exporters remained.
As regards the Dicastal Group, the group was treated as non-cooperative and awarded higher duties.
The investigation was particularly interesting in its conclusion, with the following aspects setting it apart from other investigations, including midterm reviews, usually conducted by the DGTR:
- The scope of the review was restricted to the re-quantification of dumping margin and injury margin, and no examination of injury to the domestic industry was conducted.
- The review considered only the sampled and non-sampled cooperative exporters of the previous investigation within its scope.
- Where the volume of exports by an exporter were low, the DGTR found that the same could not form a basis to examine whether the re-quantification of duty was warranted.
[This article was originally published in the International Trade Newsletter of the International Law Office, at https://www.lexology.com/Commentary/international-trade/50f0a942-4cc5-49d8-9b52-fbdfec4373b0]