The Hindu Business Line : Dumping duty on lead acid batteries to be discontinued

THE Designated Authority in the Anti-Dumping and Allied Duties wing of the Department of Commerce has recommended discontinuation of the anti-dumping duty it recommended and imposed in December 2001 on all imports of lead acid batteries from Bangladesh, China, South Korea and Japan.

In its recent notification, after undertaking a mid-term review probe, the authority held that originally Exide Industries Ltd and Amara Raja Batteries Ltd sought the application for anti-dumping probe on behalf of domestic industry, which together qualify the standing in terms of the provisions of the anti-dumping rules.

In its elaborate mid-term review after obtaining public disclosure statement from the exporters, importers and domestic industry, the authority held that the import from the subject countries has decreased in absolute terms during the period of investigation (PoI). In terms of market share in imports, the share of subject countries in this probe has decreased from 59.62 per cent during 2000-01 to 41.85 per cent during the PoI.

The authority contends that another mid-term review investigation concerning imports of lead acid batteries originating in or exported from Chinese Taipei, Singapore and Hong Kong is under way having the same period of investigation. The market share in import from these countries has also decreased from 30.61 per cent during 2000-01 to 3.02 per cent during the PoI.

On the other hand, the sale of domestic industry has increased from 76,60,033 batteries to 1,28,54,661 batteries during the PoI as compared to the base year. The sales in volume terms of the domestic industry have also jumped by 67.81 per cent and in value terms by 21.50 per cent. The installed capacity of the domestic industry too has increased since 2000-01 by 49.48 per cent with both the constituents of the domestic industry increasing their installed capacity. The production of the domestic industry has also increased by 62.33 per cent. As regards capacity utilisation, the domestic industry is able to utilise its capacity to the extent of 87.54 per cent during the PoI compared to the base year of 80.61 per cent.

The authority noted that the share of imports from the subject countries has diminished in a situation when the domestic demand has increased substantially. The market share of the domestic industry has increased from 81.60 per cent in 2000-01 to 84.59 per cent.

The authority opined that the landed value of imports from the subject countries is higher than the next sales realisation of the domestic industry for the subject goods during the PoI, thereby not undercutting the selling price of the domestic industry.

The undercutting margin was within a range of - 8 per cent to - 86 per cent during the PoI.

Further, Exide Industries, which constitutes the major proportion of the domestic industry, has been consistently improving its profitability and during the PoI, it has achieved the best of its performance in the past 10 years. The company has achieved a return on capital employed of about 20.41 per cent during the PoI as compared to 13.82 per cent during the base year.

In the case of Amara Raja, the company was selling huge quantities of industrial batteries to the telecom sector. During the PoI, the demand for the batteries in the telecom industry went down with resultant reduction in the price of batteries to all time lows which was aggravated by the excess capacity in the battery industry.

Hence, the authority held the domestic industry has not suffered material injury due to dumped imports and discontinuation of anti-dumping duties on the subject goods from the subject countries was unlikely to lead to the recurrence of injury to the indigenous industry.

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