Directorate General of Trade Remedies, Ministry of Commerce & Industry, Government of India with Case No. CVD (01) – 04/2023 has issued an initiation notification for a countervailing duty investigation concerning imports of "Textured Tempered Coated and Uncoated Glass" originating in or exported from Vietnam. Here are the highlights on what has been initiated, why, and who all should be concerned. If you would like to discuss your case, contact our International Trade & WTO desk.
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What has been initiated in the countervailing duty investigation concerning imports of "textured tempered coated and uncoated glass" from Vietnam?
M/s Borosil Renewables Limited,(hereinafter referred to as the “applicant”), has filed an application before the Designated Authority (hereinafter referred to as the 'Authority’), on behalf of domestic industry, in accordance with the Customs Tariff Act,1975 as amended from time to time (hereinafter referred as the 'Act’) and the Customs Tariff (Identification, Assessment, and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules, 1995, as amended from time to time (hereinafter referred to as the 'Rules’), seeking initiation of countervailing duty investigation by alleging subsidization of textured tempered glass whether coated or uncoated”, originating in or exported from Vietnam (hereinafter referred to as the 'subject country’).
Allegation of subsidization
The applicant has alleged that the producers/exporters of the subject goods in the subject country have benefitted from the actionable subsidies provided at various levels by the government of the subject country, including the government of different provinces and municipalities in which producers/exporters are located, and other public bodies. The applicant has relied upon the relevant laws, rules, regulations and other notifications of the relevant government agencies and public bodies as available in the public domain and in the determination of other investigating authorities who had conducted comprehensive investigations of such schemes and concluded the existence of countewailable subsidy programs.
Consultation
In terms of Article 13 of the Agreement on Subsidies and Countervailing Measures (ASCM) pre-initiation consultations were held on 26.12.2023 with the representatives of the Government of Vietnam. The comments received from the Vietnamese government have been taken on record and the same will be duly taken into consideration during the course of the investigation.
Subsidy programs
The prima facie evidence provided by the applicant shows that the producers and exporters of the subject goods in the subject country have benefitted from a number of subsidy schemes/programs, granted by the government of Vietnam and/or their respective public bodies as listed below. The alleged subsidies consist of direct transfer of funds and potential direct transfer of funds or liabilities; government revenue that is otherwise due is foregone or not collected; provision of goods and services for less than adequate remuneration; etc.
Import duty exemption on imports of raw materials for enterprises in non-tariff zones |
Import duty exemption on imports of machinery and equipment |
Reduction of corporate income tax |
Exemption and reduction of land & water rent |
Investment support |
Investment credit by Vietnam Development Bank |
It has been alleged that the above-mentioned schemes are subsidies since these involve a financial contribution from the government of Vietnam or other regional or local, including public bodies and confer a benefit on the recipient(s). These schemes are also alleged to be limited to certain enterprises or groups of enterprises and/or products and/or regions and therefore specific and countervailable.
The Designated Authority reserves the right to investigate other subsidies, which may be found to exist and availed by the producers and exporters of the subject goods9 during the course of the investigation.
Allegation of injury and causal Link
The applicant has provided prima facie evidence with respect to the injury suffered by the domestic industry because of the subsidized imports from Vietnam. The volume of the subject imports from the subject country has increased in both absolute as well as in relative terms. The capacity utilization of the domestic industry has declined. The price suppression and depression caused by the dumped imports have been preventing the domestic industry from increasing its prices to recover the full cost and achieve reasonable rate of return. The subject imports have an adverse impact on the profitability parameters of the domestic industry due to which the cash profits, PBIT and ROCE are negative throughout the injury investigation period. There has also been an increase in the inventory levels of the domestic industry. Thus, the evidence provided by the applicant prima facie shows injury to the domestic industry caused by the alleged subsidized imports from Vietnam.
Initiation of the investigation
On the basis of the duly substantiated application by the domestic industry, and having satisfied itself, on the basis of prima facie evidence submitted by the applicant substantiating the subsidization and consequent injury to the domestic industry, the Authority hereby initiates an anti-subsidy investigation into the alleged subsidization and consequent material injury to the domestic industry in accordance with Section 9 of the Act read with Rule 6 of the Rules, to determine the existence, degree, and effect of alleged subsidization and to recommend the amount of countervailing duty, which if levied would be adequate to remove the injury to the domestic industry.
Domestic Industry & Standing
Rule 2(b) defines domestic industry as follows: "domestic industry’ means the domestic producers as a whole of the like article or domestic producers whose collective output of the said article constitutes a major proportion of the total domestic production of that article, except when such producers are related to the exporters or importers of the aIleged subsidised article, or are themselves importers thereof, in which case such producers shall be deemed not to form part of domestic industry”
The application has been filed by M/s Borosil Renewables Limited. As per the application there is one more producer in India, viz. M/s Gobind Glass & Industries Ltd. apart from the applicant during the POI proposed by the applicant. However, post filing of the application, the Authority has received support letters from four more domestic producers namely M/s Triveni Glass, M/s Vishakha Renewables, M/s Emerge Glass and M/s Gold Plus Glass Ltd., who have recently commenced the production of the product under consideration. Hence, during the POI adopted by the Authority there are five more producers of the PUC apart from the applicant and the applicant still accounts for a major proportion of the total production in India.
The applicant has not imported the subject goods from the subject country. The applicant is also not related to any the importer or the exporter of the subject goods.
Since the production of the applicant accounts for a major proportion of the total production of the subject goods in India, the applicant satisfies the standing and constitutes domestic industry within the meaning of Rule 2(b) of the CVD Rules, 1995 and the application satisfies the requirements of Rule 6(3) of the CVD Rules, 1995.
Product under consideration
The product under consideration in the present application is “textured toughened (tempered) glass with a minimum of 90.5% transmission of thickness not exceeding 4.2 mm (including tolerance of 0.2 mm) and where at least one dimension exceeds 1500 mm, whether coated or uncoated” (hereinafter also referred to as “textured tempered glass” or “TTG” or “subject goods” or “product under consideration” or “PUC”). The product is also known by various names such as solar glass, low iron solar glass, solar glass low iron, solar photovoltaic glass, high transmission photovoltaic glass, tempered low iron patterned solar glass, etc. in the market parlance.
Textured tempered glass is used as a component in solar photovoltaic panels and solar thermal applications. The level of transmission can be achieved by keeping the iron content low, typically less than 200 ppm. The transmission level goes up by about 2%-3% when coated with an anti-reflective coating liquid.
The parties to the present investigation may provide their comments on the PUC and propose product control numbers (PCNs), if any, within 15 days of circulation of the nonconfidential version of the application filed before the Authority as indicated in paragraph 24 of this initiation notification.
Like Article
The applicant has stated that there are no significant differences in the article produced by the applicant and exported from the subject country. The article produced by the applicant and imported from Vietnam are comparable in terms of physical and chemical characteristics, manufacturing process and technology, functions and uses, product specifications, pricing, distribution and marketing, and tariff classification of the subject goods. The subject goods and the article manufactured by the applicant are technically and commercially substitutable. The applicant has claimed that consumers of the PUC are using the subject goods and the article manufactured by the applicant interchangeably. Thus, for the purposes of initiation of the present investigation, the subject goods produced by the applicant are being treated as like article to the product being imported from Vietnam.
Country involved
The application has been filed in respect of alleged subsidization of the subject goods originating in or exported from Vietnam. Therefore, the subject country for the present investigation is Vietnam.
Period of Investigation
The applicant has proposed 1st July 2022 to 30th June 2023 (12 months) as the period of investigation (hereinafter also referred to as 'POI’). However, the Authority has considered the POI as 1st January 2023 to 31st December 2023 (12 months). The injury information has been provided for the POI and three preceding years, i.e., 1 April 2020 to 31 March 2021, 1 April 2021 to 31 March 2022, 1 April 2022, to 31 March 2023.
Contact Partner: Anu MongaEmail: anu.monga@anantlaw.com Mobile: +91 98112 64474 Landline: +91 11 4302 6688 Connect on LinkedIn |