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Mahesh

22/06/24 07:25 AM IST

European Commission imposed provisional anti-dumping duties on Indian optical fiber cable makers

In News
  • The European Commission’s Directorate General for Trade imposed anti-dumping duty on Indian optical fibre cable manufacturers. 
Why these actions ?
  • Optical fibre cables are a pivotal commodity for facilitating telecommunications and broadband coverage.
  • Representing the industry union of optical fibre cable (manufacturers), Europacable in October 2023 observed that imports of single-mode optical fibre (SMOF) cables from India had increased both in absolute terms and market share.
  • These lower-priced imports, the complainant said, had a negative impact on the quantities sold, the level of prices charged and on the market-share held by European manufacturers.
  • Europacable said that the situation resulted in “substantial adverse effects on the overall performance and the financial situation” of the industry.
  • The allegations were based on a comparison of the domestic prices with the export prices (ex-factory pricing) of the products when sold for export to the Union.
  • The complainant said that the dumping margins calculated on this basis are “significant for the country concerned (India).” 
  • Thereafter, in November the same year, the Commission found “sufficient evidence to justify the initiation of a proceeding.”
  • The investigation scrutinised the allegations about dumping and injury between October 1, 2022, to September 30 the next year. 
Anti-Dumping Duty
  • Anti-dumping duties have been provisionally levied in the range of 8.7% of 11.4% on Indian cable manufacturers.
  • Birla Cable, Universal Cable and Vindhya Telelinks will face an anti-dumping duty of 8.7%. Polycab India, ZTT India, Aberdare Technologies, Apar Industries, UM Cables and Aksh Optifibre would be encountering an anti-dumping duty of 9.9%. Sterlite Technologies and Sterlite Tech Cables Solutions face a duty of 11.4%.
  • However, these are provisional measures, and companies have access to legal recourse. 
  • HFCL emerged as the only Indian manufacturer to have been exempted from the provisional anti-dumping duty, a fact further corroborated by its communications with stock exchanges.
  • “HFCL’s products have been preferred by European telecom operators, as they meet the quality, reliability and safety standards, are commercially viable, and guarantee a sustainable supply for the construction of Europe’s telecom infrastructure,” .
  • It also mentioned having “long-term engagements” with some of the region’s leading telecom operators and ISPs.  
Trade & Business Dynamics
  • As per data from the World Bank’s World Trade Integrated Solution, China was the biggest import partner (to the EU) for optical fibre cables in 2023.
  • This was followed by India, U.S., Morocco and U.K. Globally, the top exporters of the commodity were China, U.S., EU, Mexico and Hong Kong — in that order. Considering India’s placement in this ecosystem, the anti-dumping duties could potentially translate to cost implications for European consumers.
  • Back in 2021 when the Commission acted against China, it said that with the demand for cables expected to increase, the measures would ensure distributors have a larger competing market.
  • “This is an opportunity for them to keep and develop their business even if their prices increase due to the anti-dumping duties,”.
  • These dynamics, however, could not be realised because China undercut prices further. Back then, concerns also emanated about importers being able to switch suppliers in a relatively short time— it would be “costly” and “time consuming.”
  • The Commission, however, derived confidence from the array of importing countries and earlier resilience to find new suppliers during the 2017-18 shortage. 
  •  India’s exports (in terms of value) of optical fiber cables declined 11.21% to $47.8 million in FY 2023-24.
  • In fact, in May last year, India’s Directorate General of Trade Remedies (DGTR) had also initiated an anti-dumping investigation scrutinising China, Indonesia and South Korea.
  • The investigation observed that because of an increase in the volume of low-priced dumped goods, the domestic industry has not been able to sell the article in significant quantities in the domestic market. This has translated into an inventory pile-up. 
Source- The Hindu

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