J.K. Dadoo, Joint Secretary (Anti Dumping and Subsidies), Ministry of Commerce, GoI |

The constant scrutiny that comes with heading one of the most controversial departments of Ministry of Commerce can weigh even the best down. But when The Dollar Business caught up with J. K. Dadoo, Joint Secretary (Anti Dumping and Subsidies), we found him to be anything but weighed down as he spoke, with an amazing air of confidence and clarity. Excerpts from the interview:

Interview by Steven Philip Warner & Vanita Peter D’souza | The Dollar Business

TDB: India has initiated more anti-dumping investigations than any other country in the world. Reports are also doing the rounds that at a recent WTO meeting, US and EU accused India of overdoing safeguard action. Where do you stand on this issue?

J. K. Dadoo (JKD): Anti-dumping duties imposed by us cannot be compared with that by any other country since the situation is very different. Each order that you pass, goes to the WTO. The WTO has not found any order by us inaccurate, incorrect or inappropriate. Whatever comes through by way of WTO directions, is sent to us for comments. At the same time, we send all our filed final findings to WTO regularly and they look at them. What is important is what the world regulator says.

TDB: Not surprisingly, the maximum number of anti-dumping duties imposed by India has been against Chinese products. Does this stem from the fear of ‘Made in China’ and the big threat that it poses to the now and then of India’s manufacturing sector?

JKD: Why would we consciously do that? If the domestic industry is hurt by Chinese dumping, they come to us with an application and relevant data indicating what is the extent of the injury. We look at such applications. Once the domestic industry submits an application with all the necessary data, we take approximately 3-6 months to decide whether we will be able to take up the case. If we are not satisfied, we reject the application. We ask the applicants multiple questions and they also have to submit multiple sets of documents. First, we want to be prima facie sure about two things – (a) that dumping is taking place based on the data given by the domestic industry; and (b) that the data is verifiable with the Directorate General of Commercial Intelligence and Statistics (DGCI&S). Based on this, we check whether injury is taking place or not. If we are convinced both are happening, i.e., dumping and consequential injury, we initiate the case. This is because it is all about injury.

TDB: Do you think anti-dumping duties are against free market principles?

JKD: I am not saying anything about free markets. The data points, which the domestic industry comes to me with, are seen very carefully. We don’t want to create a situation where the entire market is affected. We ensure that anti-dumping duties don’t deter people from exporting or importing. The only purpose of anti-dumping duty is to stop dumping, if it causes injury.

TDB: Do you involve the government of the country/ manufacturer/ exporter against which anti-dumping investigations are initiated?

JKD: The external government is informed, but it is up to them to come and represent themselves. A lot of them come through their embassies here. A lot of them send their lawyers. But we don’t go hunting around for them. We inform their embassies about the cases we have initiated and welcome their representation. They have three options on representation – either their embassies can come or their government experts can come; or their lawyers can come. Sometimes, we have representation from one of the three, sometimes from all three.

TDB: Following prolonged investigation, the Ministry of Commerce’ proposal to the Ministry of Finance to impose anti-dumping duties on solar cell imports from Malaysia, US, China and Taiwan was overlooked. This, despite complaints from many Indian solar panel manufactures. Why?

JKD: We only recommend the duty. The right to accept or reject it is with the Ministry of Finance. We have never been told that we were wrong. If you have seen our order on solar cells, you will notice that it ran into 150 pages. Never in the past had we have got such a complicated case, nor did we have such a long order. Everything that any stakeholder had to say is there in the order. So, nobody can say he/ she was not heard.

We had received several complaints and counter complaints in this case. We are hardcore professionals. We will look at the merit of very case in terms of costing. In this case, the costing data was indicating that dumping was taking place and was taking place substantially. The dumping margins varied from country to country. So, we had recommended a very small duty against United States and a much larger duty against manufacturers in other countries. 

 

Now, the point is why these exporters are not cooperative. If they have nothing to hide, they should come out with all their data. The fact that they are non-cooperative means I have to impose more duties as I am not getting the data. The duty was low on American manufacturers because they cooperated and provided us with all the data that we had asked for. The point I am trying to make is, we are under no pressure or influence from any source. I am clarifying this because this case stretched on for about 18 months. There was also an attempt to create an impression that it was done by the previous government (UPA), which is incorrect.

TDB: Once imposed, the anti-dumping duty on an item lasts fairly long. How do you decide when should it be revoked?

JKD: The law is clear about this and the duty is, normally, imposed for five years. But the law also says we can do a mid-term review. A mid-term review, as per law, can start any time after one year of imposition. Normally, we don’t encourage it after one year. We want the duty to be there for at least two years, before reviewing. But if there is a pressing case, where the evidence is very clear about damages, then we don’t mind a review earlier.

The second review is done one year before the completion period, i.e., after the fourth year. It is called the ‘sunset review’. As the sun is going to set on the duty after the fifth year, one can file a review application, so that we get a year to decide whether it is appropriate to continue the duty. These are the legal provisions and we follow them.

TDB: In recent times, many steel manufactures in India have complained about the rise in steel imports from China, which has forced many of them to go for price cuts. Shouldn’t you look at imposing anti-dumping duty on long steel as was the case with certain varieties of cold rolled flat steel products coming from China in the past?

JKD: We don’t initiate a case on our own. The onus is always on the domestic industry to provide us with the data. Even though the law allows us to initiate on our own, we normally don’t do it as then the entire onus is on us. That’s a very tricky thing to do. How do I get all the information about a particular case? In case of steel, I don’t recall how many cases we have investigated. But whenever the domestic industry has come forward and indicated that dumping is taking place and causing injury, we have initiated investigations.

TDB: Since the start of 2013, there has not been a single instance of imposition of anti-dumping on goods originating from China. How much has the WTO got to do with this?

JKD: This simply means although prima facie we were sure that dumping was taking place when we initiated the cases, we didn’t get enough insight from the data that was provided to us. We are not playing a game here. The reason is that this has repercussions on a large population. There might be an importer, providing employment to 10,000-15,000 people. We can’t impose a duty and sabotage their work. Anti-dumping is a very serious business. The initiation process, itself, takes about three months and that’s where our rigour comes from. A lot of people don’t understand anti-dumping. They think it’s a remedy for everything, which it is not. For example, we have not imposed any anti-dumping duty on toys and no toy manufacturer has, so far, come forward and claimed he/she is getting hurt. May be these toy manufactures are importing themselves. So, if they are importing, they are not part of the industry. It’s a tricky business. As far as WTO is concerned, we are bound to follow its laws and procedure. All our rules are in line with what the WTO says.

TDB: Moving away from anti-dumping, questions have also been raised about the ASIDE scheme. The concern is that despite total sanctions under the scheme rising, many states and union territories have been left behind. Where do you stand on this?

JKD: Under ASIDE, we have a total budget of Rs.800 crore and we have a formula for allocations. So, right at the beginning of a financial year, we allocate 80% of that money – Rs.640 crore – to all the states. We look at the previous four years export data to arrive at this formula. Therefore, if you are a good exporter state, you will get a good share from the kitty. There is only one exception. If what we have given to you in the past has not been spent or if you do not send us the utilisation certificates, then we hold back the money. The reason is simple – money is already available to you, first spend it and then come to us.

I agree that some states feel they are not getting enough. But the point is if the bigger states are exporting more, then their requirements are also more. So, how can we neglect their demands?

 

TDB: We don’t have a system to make states more accountable for their export performance. Should it be made mandatory for states to declare exports as a priority sector?

JKD: We have asked each state to develop an export strategy. The Chief Secretary of each state has been asked by its Chief Minister, the Union Commerce Minister and the Commerce Secretary to develop an export strategy. 10 states have already done it and they have their export strategies in place. The remaining states will also do it. I hope, we will receive them in the next couple of months.

Secondly, we are also asking each state to appoint an Export Commissioner. This, since if you want to coordinate between all stakeholders, the first thing you require is a list of all exporters. Who will prepare this list? There has to be an export commissioner to look after this. Six states have already appointed export commissioners and others will appoint one soon. If a state doesn’t know who its exporters are, then obviously you can’t boost exports. What we are saying is have a strategy, have a commissioner and then push for more exports. Each state should do this since that’s how we reduce our CAD and that’s where the economy of that particular state gets a boost.

 

 

TDB: Export promotion in the North-East is another problem area. Do you think the government is doing enough to encourage the North-Eastern states to export more?

JKD: Apart from giving money to North-Eastern states under ASIDE, we also have an export development fund for the North-East. The main problem in the North-East is logistics. Let’s say, you produce something in Dimapur. But if there is no road connectivity between Dimapur and Guwahati, how do you shift your goods to the nearest area? How do you export them? These are infrastructure related issues and the states need to come forward and do the needful. We are also asking states to prepare projects by which exports can be boosted. But we get very few proposals. They need to create detailed project reports. At the same time, we have provided a lot of money to the North-East in the past, but haven’t got utilisation certificates. Fortunately, a lot of this has been resolved over the past two years.