Parties are often unsure about how to react to notices from the The Directorate General of Trade Remedies (DGTR) seeking participation in the investigation.
The Directorate General of Trade Remedies (DGTR) in India is the nodal governmental agency for conducting trade remedial investigations. It is an investigative body that examines complaints of unfair trade by foreign exporters and recommends imposition of trade remedial measures, such as anti-dumping duty, countervailing duty and safeguard duty, or physical import restraints in case of import surges. The expectation of the DGTR is cooperation from the parties to the investigation in terms of providing requisite data and information that may be needed to fairly arrive at a conclusion on whether trade remedial measures is at all required to correct distortions of trade caused due to any unfair trade practice of foreign exporters.
In any typical trade remedy investigation, the interested parties are the domestic industry manufacturing a product that submits a complaint about an unfair practice, providing data and information as mandated by DGTR evidencing the cause for action on a preliminary basis. Such a complaint after an initial examination by the DGTR is made public in case the investigation is initiated. DGTR seeks information from foreign exporters of that product to India, Indian importers and users, consumer organizations and the interested public at large. A question arises on how to react to the notices from the DGTR seeking participation in the investigation. Should one participate and offer data and information for examination that may be confidential in nature, or simply not respond and react if the trade remedial measure is finally imposed.
Participation in the investigation offers numerous advantages to the cooperating exporters, producers, importers and users. Depending on the nature of interest that a party to the investigation may have, the magnitude of advantages would vary. A participating producer exporter of a product subject to investigation will have the opportunity to prove that it is not involved in dumping or illegal subsidization. In the event of being able to prove nil dumping, a producer-exporter will not be subject to any duty. Even if the exporter has made dumped sales in the country of import, participation confers an opportunity to limit the remedial duty only to the extent of dumping and resultant injury. In contrast, non-participation may result in significantly higher remedial duty, since the DGTR will rely on the data and information that is provided by the complainant’s domestic industry.
As a matter of practice, the DGTR presumes that non-participating exporter or producer may have the highest incidence of dumping and consequent injury to the domestic industry. Further, in the absence of contesting claim, the DGTR cannot decline the dumping and injury claims of the domestic industry. Therefore, cooperating exporters and producers can safeguard themselves against the duty determined on the basis of adverse inference.
Notably, a nil or lower duty on a producer or exporter gives comparative advantage over those who are subject to a higher duty. This effectively means that exporter/producer with lower duty will have higher demand and better market access as opposed to those who are subject to relatively higher incidence of duty. Non-participating exporters will lose its market share to cooperating ones with lower duties. Thus, participating parties will have commercial edge over non-participating in terms of capturing the market.
