European Commission levies provisional anti-dumping duty on optical fibre cables from India

The European Commission Directorate General for Trade has levied provisional anti-dumping duty - ranging between 8.7% and 11.4% - on nearly a dozen Indian optical fibre cable makers, while exempting imports from HFCL Ltd and its subsidiary HTL Ltd.

According to an order issued on 14 June, a duty of 8.7% has been levied on exports from Birla Cable Ltd, Universal Cables Ltd and Vindhya Telelinks Ltd to the European Union. As per the order, Sterlite Technologies and Sterlite Tech Cables Solutions Ltd will incur 11.4% duties on their exports while a 9.9% duty has been levied on Aberdare Technologies Private Ltd, Aksh Optifibre Ltd, Apar Industries Ltd, Polycab India Ltd, UM Cables Ltd, and ZTT India Private Ltd. All other exporters will incur a duty of 11.4%.

“This decision is a huge achievement for us and speaks volumes about the trust that we have garnered globally for our fair-trade practices and transparency of processes. We firmly believe that this decision will enable us to play a central role in Europe’s digital transformation,” Mahendra Nahata, managing director at HFCL, said in a statement to BSE Monday.

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Probe started last year

The order follows an investigation by the European trade agency that began in October last year into complaints by European optical fibre cable (OFC) industry, represented by Europacable, about dumping by Indian exporters.

During the middle of November 2023, notices were sent to Indian manufacturers where European Commission requested initial sales data and extensive data on manufacturing, sales, exports, and pricing for October 2022 – September 2023 from export producers.

As per the statement by HFCL, the information and data were verified by European Commission with intensive validation conducted at the premises of all relevant Indian manufacturers by sending its officials to India in April. This was done to determine whether Indian manufacturers were pricing their products for export to Europe lower than their domestic sales prices or below their cost, it added.

The decision to levy anti-dumping duty comes on the back of levies being imposed on OFC imports from China in November 2021. The duties have since been increased.

Dumping impacts the price of that product

In international trade parlance, dumping happens when a country or a firm exports an item at a price lower than the price of that product in its domestic market. Dumping impacts the price of that product in the importing country, hitting margins and profits of local manufacturing firms.

Global trade norms allow a country to impose tariffs on dumped products to provide a level-playing field to domestic manufacturers vis-a-vis foreign producers and exporters. This also ensures fair trading practices.

Sterlite Technologies Ltd said in a statement to Mint that the levy was only a preliminary disclosure and would be imposed after due reviews and consultation with the company.

"It is important to clarify that this is an initial step of the process, which will be followed by thorough consultation and review," a spokesperson said.

“With our Optical Fibre Cable and Optical Connectivity manufacturing in Italy, we have been a trusted partner in the European region for over two decades, working hand in hand with the local service providers to further their country’s fiberisation ambitions. We are constructively engaging with the EU authorities and are confident that a comprehensive evaluation will further reinforce our steadfast commitment towards fair competition and advancement of Europe’s digital connectivity goals.”