Anti-dumping investigation concerning imports of Untreated Fumed Silica from China PR & Korea RP.

To be published in Part-I Section I ofthe Gazette olladia Ertraordinary F. No.6/40/2020-DGTR Government of India Ministry of Commerce & Itrdustry Department of Contmerce Directorate General of Trade Remedies Jeevan Tara Building, Parliament Street New Delhi Dated: 20fi September, 2021 NOTIFICATION FINAL FINDINGS

Case No. AI) on - 35/2020

Sub: Anti-dumping investigation concerning imports of 'Untreated Fumed Silica" originating in and exported from China PR and Korea RP. A. BACKGROUNI) OF THE CASE F. No. 6i40l2020-DGTR: Having regard to the Customs Tariff Act, 1975, as amended from time to time and the Customs Tariff (Identification, Assessment and Collection of Anti- Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1 995, as amended from time to time thereot The Desigrrated Authority (hereinafter referred to as the "Authority'') received an application from lWs Cabot Sanmar Limited (hereilafter also referred to as "the applicant" or "the petitioner" or "the domestic industry") in accordance with the Customs Tariff Act, 1975, as amended from time to time (hereinafter also referred to as the Act) and the Customs Tariff (Identification, Assessment and Collection of anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, as amended from time to time (hereinafter also referred to as 'the Rules" or "the AD Rules") thereof for imposition of anti-dumping duty on the imports of "Untreated Fumed Silica" (hereinafter also referred to as "the product under consideration" or "the PUC" or "the subject goods") from China PR and Korea RP (hereinafter also referred to as the "subject countries"). 2. And whereas, the Authority, on the basis of a duly documented application and sufficient prima-facie evidence submitted by the applicant, issued a public notice vide Notification No. 6/40/2020-DGTR dated 22nd Septernber, 2020 published in the Gazette of India, Extraordinary, initiating the subject investigation in accordance with Rule 5 of the AD Rules to determine the existence, degtee and effect of the alleged dumping of the subject goods, originating in or exported from the subject countries and to recommend the amount of anti-dumping duty, which if levied, would be adequate to remove the alleged injury to the domestic industry. I Page | 1

B. PROCEDURE 3. The procedure described hereinbelow has been followed with regard to the investigation: a. The Authority notified the Embassies of the subject countries in lndia about the receipt of the application before proceeding to initiate the investigation in accordance with Sub-Rule (5) of Rule 5 supra. b. The Authority issued a public notice vide notification dated 22nd Septonber, 2020, published in the Gazette of lndia, Extraordinary, initiating an anti-dumping investigation concerning imports ofthe subject goods from the subject countries. c. The Embassies ofthe subject countries in India were informed about the initiation of the investigation in accordance with Rule 6(2) of the Rules. d. The Authority sent a copy of the initiation notification to the Govemment of the subject countries, through their Embassies in India, known producers/exporters from the subject countries, known importers/users and the domestic industry as per the addresses made available by the applicant and requested them to make their views known in writing within the prescribed time limit. e. The Authority provided a copy of the non-confidential version of the application to the known producers/exporters and to the Govemments of the subject countries, through their Embassies in lndia in accordance with Rule 6(3) of the Rules supra. f. The Authority made available the non-confidential version ofthe evidence presented by the various interested parties. A list of all the interested parties was uploaded on DGTR's website. Due to inaccessibility of the public file in the wake of global pandernic of COVID-l9, all the interested parties were asked to shme the non- confidential version of all their submissions with all the other interested parties via emails. C. The Authority, upon requests, granted extension of time to the interested parties to file their response to the questionnaire as well as the submissions. The time limit was extended up to 16th Decernber, 2020. h. The Authority sent Exporter's Questionnaire to the following known producers/ exporters in the subject countries in accordance with Rule 6(4) of the AD Rules: i. IWs Henan Xunyu Chernical Co., Ltd, China PR ii. M/s Shandong Zhonghai New Material Group Co., Ltd, China PR iii. M/s Guanzhou GBS High Tech & lndustry Co Limited, China PR iv. IWs Keysu Industrial Co. Ltd, Korea RP ln response to the initiation of the subjrc! investigation, the following exporters/producers have filed the exporter's questionnaire response, and made submissions during the course ofthe investigation: l. ii. iii. iv. M/s Shandong Dongyue Silicone Material Co., Ltd., China PR M/s Wacker Chemicals Fumed Silica (Zhargiiagang) Co. Ltd, China PR M/s Wacker Chernicals (China) Co Ltd, China PR M/s OCI Company Ltd, Korea RP Page | 2

M/s UNID Global Corporation, Korea RP j. The Embassies of the subject countries in India were also requested to advise the exporters/producers from their respective countries to respond to the questionnaire within the prescribed time limit. A copy of the letter and questionnaire sent to the known producers/exporters was also sent to them along with the names and addresses of the known producers/exporters from the subject countries. k. The Authority sent questionnaire to the following known importers or users of subject goods in India, calling for necessary information in accordance with Rule 6(4) of the Rules: i. IWs Aay Cee Enterprises ii. M/s Adinath Healthcare iii. NLrs Amit Trading company iv. IWs B.P Chernicals v. Ivl/s H.R. Organo Chern Pvt Ltd. vi. IrrVs Jaychern Marketing vii. lWs K.P. Manish Global ingredients Pr4 Ltd. . viii. M/s Kenda Farben lndia Pvl. Ltd. ix. IWs Keshav Hichem Pvt. Ltd. x. I,7s Nikeon Corporation xi. IWs Nisha Chernicals xii. M/s Prakash Chemicals Pvt. Ltd. xiii. IWs Uma Chemicals xiv. lWs Zydex lndustries l. In response to the initiation ofthe subject investigation, the following importers/users have responded by filing questionnaire response, and made submissions during the course of the investigation: i. M/s Jay Chem Marketing, Mumbai ii. M/s CJS Specialty Chernicals Private Limited iii. IWs Wacker Metroark Chemicals Pvt Ltd m. The Period of Investigation ('POf) for the purpose of the present investigation is from 1$ April, 2019 to 3l't March, 2020 (12 months). The injury analysis period covers l't April, 2016 - 3l't March,2017; ls April 2017 - 31't March 2018; l't April 2018 - 3l't March,2019 and the POI. n. Request was made to the Directorate General of Commercial Intelligence and Statistics (DGCI&S) to provide the transaction-wise details of imports of the suiiject goods for the past three years, and the period of investigation, which was received by the Authority. The Authority has relied upon the DGCI&S data for computation of the volume and price of the impons. o. The non-injurious price (NIP) was determined based on the optimum cost of production and the cost to make and sell the subject goods in India as per the information fumished by the domestic industry and in accordance with Generally Accepted Accounting Principles (GAAP) and Annexure III to the Rules. Such non- Page l3

injurious price has been considered to ascertain whether anti-dumping duty lower than the dumping margin would be sufficient to remove injury to the domestic industry. p. Due to the worldwide outbreak of COVID-19 pandernic and consequent restrictions ofmovernent imposed by different countries, including India, the physical inspection through on-the-spot verification of the information was not carried out. Desk verification of the information provided by the applicanUproducers/exporters, to the extent deemed necessary, was carried out. Only such verified information, with necessary rectification, to the extent deemed necessary, has been relied upon for the purpose of this final findings. q. In accordance with Rule 6(6) of the AD Rules and Trade Notice No. 0l/2020 dated lOth April, 2020, the Authority conducted an oral hearing through video conferencing on 27fi May,2021 to provide opportunity to the interested parties to present relevant information orally before the Authority. All the parties that attended the public hearing were advised to file written submissions of the views expressed orally, followed by rejoinders, if any. They were also advised to share the non-confidential versions of their submissions with the other parties by email. The arguments made in such wriften submissions and rejoinders received from the interested parties have been considered, to the extent deemed necessary, for the purpose ofthis investigation. r. The information provided by the interested parties on confidential basis was examined with regard to the sufficiency of the confidentiality claim. On being satisfied, the Authority has accepted the confidentiality claims, wherever warranted, and such information has been considered as confidential and not disclosed to the other interested parties. Wherever possible, parties Foviding information on confidential basis were directed to provide sufficient non-confidential version of the information filed on confidential basis. s. In accordance with the Rules, the Authority disclosed the essential facts of the case that would form the basis of its findings in the form of a disclosure statement on 1.09.2021 and the interested parties were allowed time up to 7.09.2021 to comment on the same. The comments of the interested parties, to the extent relevant, have been considered by the Authority and have been addressed in this finding. t. Wherever an interested party has refused access to or has otherwise not provided necessary information during the course of the present investigation, or has significantly impeded the investigation, the Authority has considered such parties as non-cooperative and recorded the final findings on the basis ofthe facts available. u. "'**' in the final findings represents information fumished by an interested party on confidential basis and so considered by the Authority under the Rules. v. The exchange rate for the POI has been taken by the Authodty as US$ 1 : Rs. 71.65. C. PRODUCT I,]NDER CONSIDERATION AI\D LIKE ARTICLE 4. At the stage of the initiation, the product under consideration was defined as follows: "3. The product under constderation in the application is "untreated fumed silica". Synthetic silica manufactured from a vapour phase flame hydrolysis of a silane Page l4

compound, is popularly lotown as fumed silica. This type of synthetic silica is dffirentfrom other silica by its functionality and manufacturing process and the raw materials needed. While other synthetic silicas are made from silicate solution in a liquid phase, fumed silica is manufactured in d gas phase at a very high temperature. 4. Fumed silica is classified as untreated fumed silica and treated fumed silica. Untreated fumed silica is made by the Jlame hydrolysis of Chlorosilane feedstock in an orygen hydrogen flame at temperdtures of 1800 deg C. This process allows production of the silica with unique structure comprising of chain like aggregates dnd agglomerates. 5. Untreated fumed silica has a large specific surface area. Depending upon its surface area values such as 150 or 200 or 300 or 380 m2/gm the untreated fumed silica is classified as different grades suitable for different applications. The most popular grade is 200m2/gm, used in variety of applicdtions. 6. It is free-flowing powered product, used for wide applications. Untreated Fumed Silica improves free Jlow properties in solid systems and used as free flo're and tableting agent in pharmaceuticals and an anti-caking agent in foods and agrochemicals. It is also used as a carrierfor liquidflavours andfragrances. Product concerned is solid in terms of net weight expressed in terms of kg or MT. 7. Fumed Silica or Silicon di-oxide is classified under Chapter 28, subheading 281 I 2200. The untreated fumed silica being imported into India under different HS codes also under subheading 28112190,2839100 of Chapter 28 and j4049090 of Chapter 34 of the Customs tarif Act. 1975. Customs classification is only indicative in nature and not binding on the scope of the investigation. " .lViews of the other interested parties c 5. The following submissions have been made by the other interested parties regarding the product under consideration and the like article a. The PUC can easily be substituted by precipitated silica in agro chemicals as a filler, and by precipitated silic4 stearates, tri calcium phosphates, sodium silicate in food industry as anticaking agent and by precipitated silica in the pharmaceutical industries. b. The responding exporters have not produced oi exported pharma grade PUC to India. c. The varieties ofthe PUC sold by the domestic industry are neither directly comparable nor fully interchangeable with those sold by the responding exporters. d. Conhary to the claim of the domestic industry in the hearing, grade N20p is not pharma quality. The suffrx '!" denotes that the material is packed and not that the material is of pharmaceutical quality. e. A single digit PCN/segrnent be introduced in the present case to differentiate between pharma and non-pharma./technical quality. Page l5

f. The import segregation methodology provided by the domestic industry shows that it has included grades of hydrophobic fumed silica (treated fumed silica), that is PM- 09L and PM-20L. g. In segregating imports, the domestic industry has treated AERODISP W 7520, SIPERNAT 310, MSP-005 as imports of product under consideration, whereas these do not relate to the subject goods. h. The domestic industry has considered the terms SIO2 and Unidentified as those relating to product under consideration, whereas such terms may be either heated or untreated fumed silica. i. No PCN methodology is required to be considered in the present case. j. As per the domestic industry's own admission, the pharmaceutical quality PUC undergoes stringent testing; is of a higher specification and is held to be of higher standards. k. The operating or running cost of a plant manufacturing pharmaceutical quality PUC is sigrrificantly higher as compared to the technical grade. l. Pharma grade PUC cannot be produced at a plant that has authorization to produce only technical grades. C,2. Views of the domestic industrv 6. The following submissions have been made by the domestic industry regarding the product under consideration and the like article: a. The product under consideration in the present investigation is "Untreated Fumed Silica". Untreated fumed silica and heated fumed silica me two types of fumed silica and are also known as "Colloidal Silicon Dioxide'7 "Fumed Silicon Dioxide". b. The product is mainly used for pharma and non-pharma applications. However, there is no difference in the raw material or the production/manufacturing process of the product under consideration whether used in pharma or non-pharma grade. The only major difference between the two is that pharma grade requires more stringent testing and higher specifications. However, this is not a result of any difference in the production process. It is only a result ofquality testing. There is no material difference in the cost ofthe production of pharma or non-pharma grade. c. None ofthe interested parties have suggested the PCNs, barring distinction ofpharma and non-pharma grade. d. The product has no substitute. "Precipitated silica" cannot replace "fumed silica" in many applications. Precipitated silica has low purity and is less efficient than fumed silica. There is huge difference between the two. e. The goods produced by the applicant are like article to the imported goods as they are comparable in terms of chemical & technical characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution & marketing and tariff classification ofthe goods, and are technically and commercially substitutable. Page | 6

C.3 Examination bv the Authoritv 7 . The product under consideration as defined in the notice of initiation is 'hntreated fumed silica". Unheated fumed silica is a synthetic, amorphous, colloidal silicon dioxide that is generally regarded as unique in the industry because of its unusual particle characteristics. Synthetic silica, manufactured from a vapour phase flame hydrolysis of a silane compound, is popularly known as fumed silica. The interested parties have contended that unheated fumed silica is the same as the other kinds of silica, i.e., "Precipitated silica". These interested parties have, however, not established that these two kinds of products are the same product in terms of their functionality, manufacturing process, raw materials, firnctions & uses, production technology, plant & equipment, costs and prices. The domestic industry submitted that while other synthetic silicas are made from silicate solution in a liquid phase, fumed silica is manufactured in a gas phase at a very high temperature. It is also seen from the import data that there are sigrificant differences in the price of these two t)?es of products. 8. Fumed silica can be two types - treated and untreated. Unlike untreated silica which is hydrophilic, heated silica undergoes heatrnent with various chemicals to make it hydrophobic. The domestic industry submitted that treated fumed silica can be produced either by further processing of untreated fumed silica, or even undertaking entire production activities at the same time. It is seen from the import data that there are sigrrificant differences between the price ofuntreated fumed silica and treated fumed silica. The scope of the product under consideration is only untreated fumed silica. 9 . The product under consideration is made by the flame hydrolysis of chlorosilane feedstock in an oxygen hydrogen flame at ternperatures of 1800 degree C. This process allows production of the silica with unique structure comprising chain like aggregates and agglomerates. 10. Untreated fumed silica has a large specific surface area. Depending upon its surface area values such as 150 or 200 or 300 or 380 m2lg, the untreated fumed silica is classified into different grades suitable for different end applications. It is free flowing powered product, used for wide applications. Untreated Fumed Silica improves free-flow properties in solid systems and is used as free flow and tableting agent in pharmaceuticals and an anti-caking agent in foods and agrochemicals. It is also used as a carrier for liquid flavours and fragrances. 11. The product under consideration is classified under Chapter 28, under the tariff code 28112200. However, untreated fumed silica is also being imported under other HS codes, such as 28112190, 28391900 and 34049090. The customs classification is only indicative and not binding on the scope of the investigation. Further, the product does not have dedicated customs classification and a number of other products which are beyond the scope ofthe present investigations have also been imported under these classifications. Page l7

12. It has been contended that exporters/producers have not produced./exported pharma grade untreated fumed silic4 while the domestic industry has produced and supplied the product both for pharma and non-pharma applications. The Authority notes that the import data clearly shows the imports of pharma grade untreated fumed silica from the subject countries. It is not material that the responding exporters should have exported all the grades of the product under consideration. Further, the domestic industry submitted that there is no material difference in the cost of production of pharma grade and non-pharma or technical grade untreated fumed silica. The raw materials, the production/manufacturing process ofuntreated fumed silica produced whether used in pharma or non- pharma grade are the same. The only major difference between the two is that pharma grade requires more stringent testing and higher specifications. The other interested parties contended that since pharma application product requires more stringant testing, it should be classified as a different product t1pe. The Authority notes that the contention of the domestic industry that there is no difference in the product process and the cost of production of the two grades, and the only difference in the testing and more stringent specifications, the Authority considers the two are not required to be considered as separate PCNs. The Authority considers that separate PCN for the two grades are appropriate only when the product has materially different cost ofproduction. Further, the Authority notes that there is no consistent difference in the price ofpharma and non-pharma grade product.
13. With regard to import segregation, the Authority notes that the product under consideration does not have dedicated customs classification. Further, imports have been made by using a large number ofdifferent descriptions and even the grade names of the suppliers. Despite this, the interested parties have pointed out towards only one entry in the name ofN20p in the year 2017-18 as not pertaining to the product under consideration. PM-09L, and PM- 20L, AERODISP W 7520, and SIPERNAT 310, and MSP-005 have not been treated as subject untreated fumed silica. As pointed out by the other interested parties, the terms SIO2 and Unidentified are indeed generic terms that could pertain to both treated or untreated fumed silica. The Authority, however, notes that treated fumed silica is priced much higher than untreated fumed silica.
14. In view of the foregoing, the Authority concludes that the product under consideration remains the same as was defined in the initiation notification. D. SCOPE OF THE DOMETIC INDDUSTRY AND THE STANDING D.lViews of the other interested parties
15. The following are the submissions made by the other interested parties with regard to the scope of the domestic industry and the standing: The petitioner Cabot Sanmar Limited and Cabot HengYeCheng Performance Materials (Inner Mongolia) Co., Ltd. are directly or indirectly controlled by Cabot Corporation, USA and as such are related to each other. a. Page | 8

b. The domestic industry has not provided complete information regarding its related parties and exports made to India by its related parties to other non-subject countries. c. Cabot Sanmar Ltd is a joint venture between Cabot Corporation of USA and Sanmar Group, lndia. Cabot Corporation has manufacturing plants that produce fumed metal oxides in Germany, among other countries. d. Cabot Corporation added capacity of 80,00,000 KGs through a new fumed silica manufacturing site in Wuhai, China PR. It is a j oint venture of Cabot Corporation with Inner Mongolia Hengyecheng Silicone Co. Ltd which was not disclosed by the domestic industry. D.2Views of the domestic industrv 16. The following are the submissions made by the domestic industry with regard to the scope of the domestic industry and its standing: a. The application has been filed by IWs Cabot Sanmar Limited. The applicant is the sole producer of the subject goods in India. b. The applicant has not imported the subject goods from the subject countries. The applicant has imported Fumed Silica from its Joint Venhre partner Cabot Corporation, USA ofnon-PUC category, which is of special pharma grades for certain customers. c. The applicant is not related to any importer or exporter of the product under consideration within the meaning of Rule 2(b). d. Mongolia Hengyecheng is a joint venture between Cabot China Limited and Mongolia Hengyecheng Silicone Co., Ltd (HYC). HYC is not related to Cabot Sanmar Ltd, the Indian entity. D.3Examination the Authoritv I 7. Rule 2(b) of the AD Rules defines domestic industry as under: "domestic industry means the domestic producers as a whole engaged in the manufacture of the like article and any activity connected therewith or those whose collective output of the said article constitutes a major proportion of the total dotnestic production of that article except when such producers are related to the exporters or importers of the alleged dumped article or are themselves importers thereof in such case the term 'domesic industry'may be constnted as referring to the rest ofthe producers". I 18. The application has beerr fi1ed by lWs Cabot Sanmar Limited. The applicant is the sole producer of the subject goods in India. The applicant is a 50:50 joint venture between Sanmar Group, India and Cabot Corporation, USA. The Authority notes that under Rule 2(b), only the following are relevant. Page | 9

a. relationship of the applicant with exporter or importer of the product under considsration. b. exports made by the related entity. c. exports made during the investigation period. d. exports made from the subject countries only. 19. All other relationship, such as relationship with the producers of the product under consideration in subject countries or other countries, or exports made prior to the investigation period are entirely irrelevant to decide the eligibility under Rule 2(b). In any case, mere exports of the product by affiliates in the POI does not mean that the domestic producer should be disqualified and treated as ineligible domestic industry. 20. With regard to the contention that Mongolia Hengyecheng Performance Materials (Inner Mongolia) Co., Ltd. is related to Cabot Sanmar Limited, the Authority notes that Cabot Sanmar Limited is a 50:50 joint venture between Sanmar Group, India and Cabot Corporation, USA. Mongolia Hengyecheng Performance Materials (Inner Mongolia) is a 20:80 joint venture between Cabot Corporation, USA and Inner Mongolia HengYeCheng Silicone Co., Ltd., China. Thus, while Cabot Corporation USA holds 50% shareholding in the applicant, it holds only 20% holding in Inner Mongolia HengYeCheng Silicone. There are no exports of the product under consideration by lnner Mongolia HengYeCheng Silicone to India during the period of investigation. Further, even if the two parties are related parties, the mere fact of relationship is insufficient to consider the domestic producer as ineligible. 21. ln view of the foregoing, the Authority finds that the applicant has neither imported the product under consideration from the subject countries, nor is related to the exporters who have exported the subject goods in the POI or the importers who have imported the subject goods in the POI. Accordingly, the Authority holds that the applicant is an eligible domestic industry within the meaning of Rule 2@) of the Rules. The application satisfies the criteria of standing in terms of Rule 5(3) of the Rules and the applicant constitutes domestic industry under the Rules. E. CONFIDENTIALITY E.lViews of the other interested parties 22. T\e following submissions have been made by the other interested parties with regmd to confidentiality: a. The application filed is grossly incomplete and insufficient. Excessive confidentiality has been claimed. Costing information under Formats A to L and vmious policies such as purchase, sales, accounting have been kept confidential. b. The domestic industry has also failed to provide adequate non-confidential summary of the costing information. Page 110

c. Domestic industry has not disclosed complete information regarding imports from related parties. d. The applicant has falsely claimed that the indexed version of information by the opposing parties has not been made available. E.2Views of the domestic industry 23. T\e following submissions have been made by the domestic industry regarding confidentiality: a. The applicant has disclosed all the essential information in the non-confidential version of the application in accordance with Rule 7 of the Rules and as per Trade Notice No. 10/2018 dated 7m September, 2018. Indexed information has also been provided wherever possible, which would allow an analysis of the injury parameters. b. The applicant has provided entire actual information to the Authority. Considering the confidentiality of the data, the applicant has not shared such actual confrdential data with other interested parties, as this is business sensitive information and would cause prejudice to the domestic industry. c. The non-confidential version ofthe responses shows that the interested parties have filed grossly deficient responses even after being given an extension to fi1e sufficient aad complete information. d. The foreigr producer and the importer have claimed excessive confidentiality with regard to shareholding structure, production process, value chain, production facilities, related parties, name ofraw materials, procurement ofraw materials, list of products produced and/or sold, name of the holding company, shareholding details, channel of marketing in the home mmket and for exports to lndia. e. The exportem have not even provided the information on indexed basis. f. The applicant has been denied sufficient details to permit a reasonable understanding ofthe information provided to the Authority. The applicant cannot even determine the extent to which information has been provided and whether any reliance can be placed on the same. As a result, the applicant is severely handicapped and unable to comment on the response fi1ed by the exporter. E.3 Examination bv the Authoritv 24. Various submissions on confidentiality made by the applicant as well as the other interested parties during the course of the investigation, to the extent considered relevant by the Authority, have been exalnined and addressed as follows. 25. The Authority made available the non-confidential version of the hformation provided by various interested parties to a1l the other interested parties. 26. With regard to confidentiality of information, Rule 7 of the Rules provide as follows: PaBe I 11.

"Confidential inforrnation: (1) Nowithstanding anything contained in sub-rules (2), (j) and (7)of rule 6, sub-rule(2) of rule 12,sub-rule(4) of rule 15 and sub-rule (4) of rule 17, the copies ofapplications received under sub-rale (l) of rule 5, or any other information provided to the designated authority on a confidential basis by any party in the course of intestigation, shall, upon the designated authority being satisfied as to its confidentiality, be treated as such by it and no such information shall be disclosed to any other party without specific authorization of the party providing such information. (2) The designated authority may require the parties providing information on confidential basis to furnish non-confidential summary thereof and if, in the opinion of a party providing such information, such information is not susceptible of summdry, such party may submit to the designated authorily d statement of reasons why summarization is not possible. (3) Notwithstanding anything contained in sub-rule (2), if the designated authority is satisfied thdt the request for confidentiality is not watanted or the supplier of the information is either unwilling to make the information public or to duthorise its disclosure in a generalized or sumrnary form, it may disregard such information. " 27 . Ttrc information provided by the interested parties on confidential basis was examined with regard to sufficiency of the confidentiality claim. On being satisfred, the Authority has accepted the confidentiality claims, wherever warraated, and such information has been considered confidential and not disclosed to the other interested parties. Wherever possible, the parties providing information on confidential basis were directed to provide sufficient non confidential version of the information filed on confidential basis. The Authority made available the non-confidential version of the evidence submitted by various interested parties. The non-confidential version of the information related to imports, performance parameters and injury parameters of domestic industry has been made available to all the interested parties. Business sensitive information has been kept confidential as per practice. The Authority also holds that costing information is in the nature of confidential information and the Authority has been consistently allowing confidentiality on costing information wherever warranted. Wherever information is for the injury period, the applicatron contains the same either on actual or indexed basis. F. MISCELLANEOUS SUBMISSIONS F.l Views of lhe other interested parties 28. The following submissions have been made by other interested parties: a. The application does not contain adequate evidence of dumping or injury to justif, the initiation of the investigation. b. If high rate of anti-dumping duty is recommended on imports from the subject countries, the imports fiom the subject countries would stop. Page | 12

c. ln 2021, there has been a global shortage of silicon metal leading to increase in prices of the PUC which in tum led to an increase in the average price of imports. Majority of the downstream end-users are facing significant cost increases across industries. d. The applicant did not comment on why it is completely dependent on the import of its key raw material liom China PR despite availability of altematives. e. Many downstream customers have begun shifting from fumed silica to precipitated silica for cost savings. f. The present application is filed with an intention to restrict imports from unrelated entities in Korea RP and China PR while safeguarding the imports that are made from related entity/ties in Germany and other countries. g. Imposition of an unwarranted anti-dumping duty on the imports from Korea RP will not be in public interest and will only drive out a small and legitimate source of import competition. h. Imposition of anti-dumping duty on the PUC will also increase the cost of production of paracetamol tablets (e.9., Dolo-650 mg) that are currently in huge dernand and are being administered to Covid-19 patients. F.2 Views of the domestic industrv 29. The following submissions have been made by the domestic industry: The contention of the interested parties with regard to insufficient information and evidence in the application is without legal and factual basis. In fact, the investigation was initiated only after the Authority satisfied itself with regard to accuracy and adequacy of the information submitted by the domestic industry regarding dumping, injury & causal link. a F.3 Examination by the Authoritv 30. The Authority notes that the applicant filed a duly substantiated application based on which the present investigation was initiated. The present investigation was initiated based on the data/information provided by the domestic industry and after prima facie satisfoing that there is sufficient evidence of dumping, injury and causal link. The application contained all the information relevant for the purpose ofinitiation ofthe investigation. 3 l . As regards the submission of the interested parties that the anti-dumping duty will lead to stoppage of imports from the subject countries, the Authority notes that anti-dumping measures are intended to ensure fair trade and pro{ride level-playing field to all the stakeholders. These measures do not restrict imports nor cause an unjustified increase in cost of the eventual end products. The purpose of anti-dumping duty is not to give any kind of undue advantage to the domestic producers or cause any undue hardship to the consumers ofthe product. A consumer cannot seek, as a matter ofright, access to a product at dumped prices, particularly when such dumping is found to have caused injury to an established industry in India. The purpose of anti-dumping duty is to remove unfair trade Page 113

causing injury to the domestic industry. However, fair competition in the lndian market will not be reduced by the imposition of anti-dumping measures. The imposition of anti- dumping duties would not affect the availability of the product to the consumers at fair prices. 32. The Authority considers that the present investigation is an original investigation and post POI developments cannot be selectively considered for the final determination' consideration of the post PoI data implies calling every information for that period. Further, the Rules provide for periodic review. In case an interested party consider that there have been material changes after the investigation period, an interested party can seek review ofproposed measures' 33. As regards the dependency of the domestic hdustry on the imports in respect of the raw material, the Authority notes that it is not necessary for any domestic producer to source all the raw materials within the Indian market. Nor absence of some raw material in the domestic market or sourcing of the same from the intemational market can deprive a domestic producer from seeking reliefunder the Rules in case the investigation shows that dumping has caused injury to the domestic industry. 34. As regards the switch over of consumers from fumed silica to precipitated silica for alleged cost savings, the Authority notes that the investigation has shown that the demand for the product has hcreased over the injury period. Further, the possibility of a switch over in any case should not cause prejudice to any consumer from the proposed measures. The consumers can switch over to such other altemative input. 3 5 . The Authority finds that exports by related entities of the domestic industry are extrernely negligible. It is, therefore, without fachral basis that the proposed measure was sought with an intention to restrict imports from the unrelated entities while safeguarding the imports that are made from related entity/ties in Germany and other countries' 36. As regards submissions on the possible adverse effect of proposed measures on paracetamol, the Authority notes that the interested parties thernselves have contended that the domestic industry supplies significant volumes of pharma grade and imports from the third countries me largely ofpharma grade. It is also noted that a significant proportion of demand (about 30%) is met by non-subject imports. ln fact, the imports from non-subject countries (1 198 MT) are higher than the imports from the subject countries (869 MT)' G. DETERMINATION OF NORMAL VALUE RT PRICE AI\D DUMPING . EXPO MARGIN Market Economv Treatment Met). Normal Value. Export Price & Determination Of Dumpin Marsm G.l Views of the other interested Darties 37. The following submissions have been made by the other interested parties: a. The normal value, the export price and the dumping margln should be determined based on the hformation provided by the producers/exporters. Page 114

b. Pharma and non-pharma products should be segregated for determination of the normal value and non-injurious price, as only non-pharma grade is imported whereas the domestic industry is producing both. c. India must fulfil its obligations under relevant agreements to recogrize China's fulI market economy status and stop using the "surrogate country" approach in anti- dumping investigations against China. d. The petitioner and the Authority should provide a legal interpretation and evidence that would permit the continued disregard of Chinese prices and costs and the use of special methodologies in this case for normal value establishment. e. The WTO Agreements as they stand now, do not provide any legal basis for the continued disregard ofChinese producers' prices/costs for normal value establishment in anti-dumping investigations. After 1lth Decernber, 2016, the burden ofproofhas shifted to the petitioner and on lndia to establish that the costs and prices of the Chinese companies are still marred by non-market economy conditions. f. There is a higher degree of competition between the local sellers in China PR when compared to the lndian Market wherein the applicant themselves hold more than 500/o market share. g. The responding exporters request disclosure ofthe acnral claims made by the domestic industry with regard to freight, commission and port expenses. h. The Authority should calculate the normal value by taking into account the foreign producers' factors of production at a minimum and using the input costs in lndia for those factors of production. i. A1l post manufacturing expenses such as selling, distribution, marketing and general administration are also incurred by importers and importers are making reasonable profits. j. The normal value, the export price and the dumping margin should be determined based on the information provided by the producers/exporters participating in the investigation. k. Since Korea is only exporting technical grade to India, the normal value as defined for Korea should also be applicable for imports from China PR. l. Considering EU or Japan for determination of the normal value would be incorrect as the EU exports rcarly 65%o of the PUC in the pharma grade and only 35% in the technical grade. m. Since Korea RP is a subject country, the Authority should rely on the domestic or constructed price based on the data of the Korean exporters. n. The Authority's reliance on the domestic industry's cost of production with adjustrnents is also bound to artificially inflate the normal value as the domestic industry appears to have incurred high and unwarranted costs in the POI, causing injury to the domestic industry. G.2 Views of the domestic industry 38. The following submissions have been made by the domestic industry with respect to determination of the normal value, the export price and the dumping margin: Page 115

a. China should be considered as a non-market economy in line with the position taken by the Authority in previous cases, and by the investigating Authorities in other countries. b. The cost and price of the Chinese producers cannot be relied upon for determination of the normal value, and accordingly the normal value should be determined in accordance with the provisions of par:a 7 of Annexure I of the Rules' c. Apart from India, the product under consideration is majorly produced and exported from China PR, Korea RP, the European Union and Japan. The average price from European Union to India should be considered for normal value of China. d. The applicant could not find price of the subject goods in the domestic market of Korea RP as the product does not have a dedicated code. The normal value in Korea has been determined based on the estimates of the cost of production in Korea, duly adjusted with selling, general and administrative expenses. e. The export price is based on transaction wise import data provided by DGCI&S. The export prices have been adjusted for ocean freight, marine insurance, commissioq inland freight expenses, port expenses, bank charges and VAT (only for China). f. The Authority can only consider the information provided by producers/exporters for determination of export price if the same is complete in all respect. g. Since there is no difference in the cost of the pharma grade and the non-pharma grade of the PUC, separate dumping and injury margin analysis for these two grades is not necessary. Also, the normal value and the dumping margin are determined for the PUC, i.e., untreated fumed silica and not for different applications. G.3 Examination bv the Authoritv 39. The Authority has dealt with the contentions raised by the other interested parties hereunder. Under Section 9A(l)(c) ofthe Act, normal value in relation to an article means: (i) the comparable price, in the ordinary course oftrade, for the like article when meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section (6); or (ii) when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either- (a) comparable representative price of the like article when exported from the exporting country or territory or an appropriate third country as determined in accordance with the rules made under sub-section (6); or the cost ofproduction of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section (6): Page | 16

(b)Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transsh@ed through the country of export or such drticle is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin 40. The Authority had sent questionnaires to the known producers/exporters from the subject countries, advising than to provide information in the form and manner prescribed by the Authority. The following producers/exporters have participated in the present investigation: a. lWs Shandong Dongyue Silicone Material Co., Ltd., China PR b. IWs Wacker Chernicals Fumed Silica (Zhangiiagang) Co. Ltd, China PR c. IWs Wacker Chemicals (China) Co Ltd, China PR d. IWs OCI Company Ltd., Korea RP e. M/s UNID Global Corporation, Korea RP 41. The Authority has examined the submissions made by the interested parties with regard to the determination of the normal value, the export price and the dumping margin and holds as follows: a. The interested parties contended that there is a sigrificant price difference between pharma and non-pharrna grades and only non-pharma grade has been imported from the subject countries whsreas pharma grade has been supplied from Japan and EU. The Authority, therefore, examined the imports and sales data of the domestic industry. The table below shows the imports of pharma and non-pharma grades from various countries. Volume KG Application Country 2016-t7 20t'7-18 2018-t9 2019-20 Non-Pharma China 5,51,',l7t 5,00,400 5,46,804 6,42,738 Korea 1,00,480 1,08,985 67,2t0 1,33,120 Japan 2,25,360 3,16,460 3,04,920 3,73,320 EU 2,47,793 2,72,461 1,47,215 1,25,107 Other Countries 1,061 1,540 r,269 10,794 Total Non- Pharma 11,26,465 tt,99,846 10,67,418 12,85,079 Pharma China 6,400 19,200 84,400 92,680 EU 5,07,390 5,37,864 6,21,980 6,82,t41 Other Countries' 1,504 6,236 7,855 7,728 1t Total Pharma 5,15,294 5,63,300 7,14,235 7,8t,949 Grand Total r6,4t,7s9 t7,63,146 17,81,653 20,67,028 Rate (Rs/KG) Application Country 2016-t7 20t7-18 2018-19 2019-20 Non-Pharma China 239 245 300 285 Page 117

320 332 Japan 338 307 355 366 384 EU 369 602 891 477 Other Countries 954 289 317 311 292 Total Non-Pharma 284 302 315 Pharma China 291 353 384 393 EU 378 1,841 896 1,020 1,088 Other Countries 390 381 357 381 Total Pharma 341 320 310 343 Grand Total Korea 280 266 326 292 b. As regards the segregation of pharma and non-pharma grade products, the Authority notes that the normal value is determined based on the import price of non-pharma grade alone. It is noted that the product has been majorly produced and exported from China PR, Korea RP, the European Union and Japan in the period of investigation (POI). There is import of pharma and non-pharma products from the EU. The prices of pharma grade are higher than the non-pharma grade. The applicant has claimed that the average export price from the EU to India should be considered for determining the normal value for China PR. However, the other interested parties have contended that considering the EU for determination of normal value is incorrect as the EU exports nearly 65% of the PUC in the Pharma grade at higher price and only 3 5 % in the technical grade. The interested parties have also contended that as only non-pharma grade is imported from China and the prices of pharma grade are higher than the non-pharma grade, the pharma and non-pharma products should be segregated for determination of the normal value and the non-injurious price even if the domestic industry is producing both. The Authority considers that the normal value cannot be determined on the basis ofcost or price in EU as the pharma grade prices are higher in the EU. It is also noted that the majority of the imports from China are of non-pharma grades. Therefore, the normal value is determined based on the import price ofnon-pharma grade alone. c. As regards the difference in dumping margin between Chinese and Korean producers, the Authority notes that the dumping margin is the difference between normal value and export price and, therefore, its quantum depends on both t}re normal value and the expot price. d. As regards the request for disclosure of actual claims of the domestic industry with regard to the price adjustments, the Authority notes that the export price has been determined after considering the price adjustments reported by the other responding exporters. The Authority has not considered the amount of price adjustrnent made by the domestic industry. e. As regards the consideration of factors of prpduction of the Chinese producers, the Authority considers that the normal value has not been determined on the basis of cost of production in lndia but on the basis ofprices of non-pharma grade from Japan. f. None of the interested parties have given any justification why the normal value cannot be determined on the basis ofexport price from Japan to lndia. Further, since Korea RP is one ofthe subject countries, the normal value cannot be determined on the basis ofcost or price in Korea RP or export price from Korea RP. Page 118 I

G.3.1. Determination of Normal Value and Export Price Normal Value for China PR Market Economy Status for Chinese Producers 42. Tlte Authority notes the following relevant provisions with regard to determination of normal value for China PR. "7. In case of imports from non-market econotny countries, normal yalue shall be determined on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other countries, including India, or where it is not possible, on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted, if necessary, to include a reasonable profit margin. An appropriate market economy third country shall be selected by the designated authority in a reasonable manner [keeping in view the level ofdevelopment ofthe country concerned and the product in questionl and due account shall be taken of any reliable information made available at the time of the selection. Account shall also be taken within time limits; where appropriate, ofthe investigation if any made in similar matter in respect of any other market economy third country. The parties to the investigation shall be idormed without unreasonable delay the aforesaid selection of the market economy third country and shall be given a reasonable period of time to offer their comments. 8. (I) The term "non-market economy country " means any country which the designated authority determines as not operating on market pinciples of cost or pricing structures, so that sales of merchandise in such country do not reJlect thefair value of the merchandise, in accordance with the criteia specified in subparagraph (3). (2) There shall be a presumption that any country that has been determined to be, or has been treated as, a non-market economy country for purposes of an antidumping investigation by the designated authority or by the competent authority of any WO member country during the three-year period preceding the investigation is a non- market economy country. Provided, however, that the non-market economy country or the concerned firms from such country may rebut such a presumption by providing information and evidence to the designated authority that establishes that such country is not a non-market e1onomy country on the basis of rhe crireria specifed in I sub-paragraph (j) (j) The designated authority shall consider in each case the following criteria as to whether: (a) the decisions of the concerned firms in such country regarding prices, costs and inputs, including raw materials, cost oftechnologt and labour, output, sales and investment, are made i response to market signals reflecting supply and demand Page 119

and without significant State interference in this regard, and whether costs of major inputs substantially reJlect market values; (b) the production costs and financial situation of such firms are subject to significant distortions carried over from the former non-market economy system, in particular in relation to depreciation ofassets, other write-offs, barter ade and payment via compensation ofdebts; (c) such firms are subject to bankruptcy and property laws which guardntee legal certainty and stability for the operation of the firms, and (d) the exchange rate conversions are carried out at the market rate. Provided, however, that where it is shown by sfficient evidence in writing on the basis ofthe criteria specified in this paragraph that market conditions prevail for one or more such firms subject to anti-dumping investigations, the designated authority may apply the principles set out in parographs I to 6 instead of the principles set out in pardgraph 7 and in this paragraph. (4) Notwithstanding, anything contained in sub-paragraph (2), the designated authority may treat such country as market economy country which, on the basis of the latest detailed evaluation ofrelevant criteria, which includes the criteria specified in sub paragraph (3), has been, by publication of such evaluation in a public document, treated or determined to be treated as a market economy country for the purposes of anti-dumping investigations, by d country which is a Member of the ll'orld Trade Organization. " 43. At the stage of initiation, the Authority proceeded with the presumption by heating Ctuna as a non-market economy country. Upon initiation, the Authority advised the producers/ exporters in China PR to respond to the notice of initiation and provide information whether their data./information could be adopted for the purpose of normal value determination. The Authority sent questionnaire to all the known producers/ exporters in China for providing relevant information in this regard. 44. Article I 5 of China's Accession Protocol in WTO provides as follows: "Article VI of the GATT 1994, the Agreernent on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("Anti-Dumping Agreement") and the SCM Agreement shall apply in proceedings involving imports of Chinese origin into a WTO Member consistent with the following: "(a) In determining price comparability under Article VI of the GATT 1994 and the Anti-Dumping Agreement, the importing WO Member shall use either Chinese prices or costsfor the industry under investigation or a methodologt that is not based on o rtlvt ,o^parison with domestic prices or costs in China bised on the following ntles: (i) If the producers under investigation can clearly show that market economy conditions prevail in the industry producing the like product with regdrd to the manufacture, production and sale of that product, the importing WO Member shall Page | 20

use Chinese prices or costs for the industry under investigation in determining price comparability; (ii) The importing WO Member may use a nethodology that is not based on a strict cornparison with domestic prices or costs in China if the producers under investigation cannot clearly show that market economy conditions prevail in the industry producing the like product with regard to manufacture, production and sale of that product. (b) In proceedings under Parts II, III and V of the SCM Agreement, when addressing subsidies described in Articles La(Q, 1a@), 14(c) and l4(d), relevant provisions of the SCM Agreement shall apply; however, if there are special dfficulties in that application, the importing WO Member may then methodologies for identifying and tneasuring the subsidy benefit which take into account the possibility that prevailing terms and conditions in China mdy not always be available as appropiate benchmarlrs. In applying such methodologies, where practicable, the importing WO Member should adjust such prevailing terms and conditions before considering the use of terms and conditions prevailing outside China. (c) The importing WO Member shall notify methodologies used in accordance with subparagraph (a) to the Comnittee on Anti-Dumping Practices and shall notify methodologies used in accordance with subparagraph (b) to the Committee on Subsidies and Countervailing Measures. (d) Once China has established, under the national law of the importing WO Member, that it is a market economy, the provisions of subparagraph (a) shall be terminated provided that the importing Member's national law contains market economy criteria as of the date of accession. In any event; the provisions of subparagraph (a)(ii) shall expire 15 years after the date of accession. In addition, should China establish, pursuant to the national law of the importing WO Member, that market economy conditions prevail in a particular industry or sector, the non- market economy provisions of subparagruph (a) shall no longer apply to that industry or sector-" 45. The Authority notes that while the provisions of Article 15 (a)(ii) of China PR's Accession Protocol have expired with effect from l lth December, 2016, the provision under Article 2.2.1 .l of the anti-dumping Agreement read with obligation under l5(a)(i) of the Abcession Protocol require criterion stipulated in Parai8 of the Annexure 1 of anti- dumping Rules to be satisfied through the information/data to be provided in the questionnaire issued by the Authority. The Authority notes that no producer or exporter from China has submitted information desired by the Authority. Therefore, the normal value for these producers/exporters are required to be determined in terms ofprovisions of Para 7 of Annexure- 1 of Anti-Dumping Rules. Page | 21

46. The applicant has claimed that China PR should be treated as a non-market economy, and the normal value should be determined in terms of para-7 of the Annexure I ofthe Rules. The product has been majorly produced and exported from China PR, Korea RP, the European Union and Japan in the period of investigation (PO!. There is import of pharma and non-pharma products from the EU. The prices of pharma grade are higher than the non-pharma grade. The applicant has claimed that the average export price from EU to India should be considered for determining the normal value for China PR. However, the other interested parties have contended that considering EU for determination of normal value is incorrect as the EU exports nearly 65% of the PUC in the Pharma grade and only 35% in the technical grade. The interested parties have also contended that as only non- pharma grade is imported from China and the prices of pharma grade are higher than the non-pharma grade, the pharma and non-pharma products should be segregated for determination of the normal value and the non-injurious price even if the domestic industry is producing both. 4'7. The normal value for the purpose of the initiation was constructed on the basis ofcost of production of the domestic industry with due adjustment for selling general & administrative (SGA) expenses alrd reasonable profit. None of the producers/ exporters from China have provided information in the form and manner prescribed for the determination of the normal value on the basis of their own datalinformation.
47. The Authority considers that the normal value is required to be determined in accordance with para 7 ofAnnexure I of the Rules, which reads as under: "In case of imports from non-market economy countries, normal value shall be determined on the basis if the price or corxtructed value in the market economy third country, or the price from such a third country to other countries, including India or where it is not possible, or on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted i"f necessary, to include a reasonable profit margin. An appropriqte market economy third country shall be selected by the designated authority in a reasonable manner, keeping in view the level of development of the country concerned and the product in question, and due account shall be talcen of any reliable information made available at the time of selection. Accounts shall be taken within time limits, where appropriate, of the investigation made in any similar matter in respect of any other market economy third country. The parties to the investigation shall be informed without dny unreasonable delay the aforesaid selection of the market economy third country and shall be given a reasonable peiod of time to offer their comments. "
48. The Authority notee that the normal value for a country considered as ei non-market economy is required to be computed in accordance with para 7 and 8 ofAnnexure-I ofthe Rules. ln the instant case, since none of the exporters have filed questionnaire response in this regard for claiming individual normal value, the options under para 7 of Annexure-I to Rules need to be explored. Para 7 lays down hierarchy for determination ofnormal value and provides that normal value shall be determined on the basis ofthe price or constructed value in a mmket economy third country, or the price from such a third country to other countries, including lndia, or where it is not possible, on any other reasonable basis, Page | 22

including the price actually paid or payable in India for the like product, duly adjusted, if necessary, to include a reasonable profit margin. 50. The Authority considers that the normal value cannot be determined on the basis of cost or price in Europe as necessary information has not been made available by any of the interested parties aad also the pharma grade prices are higher in the EU. It is also noted that the majority of the imports fiom China are of non-pharma grades. It is seen that the imports from Japan are mainly of non-pharma grade and thus comparable to the grade being imported from China. Funher, while there were some imports of pharma gade from China also, in any case, consideration of the export price from Japan to India would be appropriate. It is noted that the volume of imports from Japan is quite significant when compared with the import volumes from China and the imports are spread over the investigation period. Further, there are imports ofthe product not only in the POI but also over the injury period. Further, this also represents the price paid or payable in India. In view of the same, the Authority considers that the normal value in respect of China can be most appropriately determined on the basis of the export price from Japan to lndia. Since this is a CIF export price, the same has been adjusted for the expenses from CIF to ex- factory. The normal value has thus been determined at ex-factory level, by deducting expenses such as ocean freight, marine insurance, commission, bank charges, port expenses and inland freight from the CIF export price from Japan to India. The normal value determined is shown in the dumping margin table below G.3.2 Export price for China PR Exoort orice for Shandone Donsvue Silicone Material C Ltd.. China PR o.. 51. During the POI, Shandong Dongyue Silicone Material Co., Ltd., has directly exported *** MT of PUC to India of invoice value *** US$. Shandong Dongyue Silicone Material Co., Ltd., has claimed adjustment on account of ocean freight, insurance, inland transportation, port and other related expense, credit expenses, packing expenses and bank charges and the same have been allowed by the Authority. Accordingly, the export price at ex-factory level for Shandong Dongyue Silicone Material Co., Ltd., China PR is determined as above and the same is shown in the dumping margin table below. Export price for Wacker Chemicals Fumed Silica (Zhangi ) Co Ltd and Wacker Chemicals (China) Co Ltd. 52. The Wacker Group [(a) Wacker Chemicals Fumed Silica (Zharyliagang) Co., Ltd (producer); (b) Wacker Chemicals (China) Co., Ltd. (exporter) and (c) Wacker Metroark Chernicals Pvt. Ltd. (related user)] filed questionnaire response. The Authority notes that Wacker Chernicals (China) Co., Ltd. has exported the product under consideration manufactured by Wacker Chernicals Fumed Silica (Zhangiiagang) Co., Ltd to India during the POI. 53. It was noted that Wacker Chernicals (China) Co., Ltd. has exported *++ Kgs of the product under consideration valued at USD *** to unrelated customers in India and *** Kgs ofthe Page 123

product under consideration valued at USD +** to a related user, i.e., Wacker Metroark Chernicals Pvt. Ltd. in India. The Authority has noted that Wacker Metroark Chemicals P\4. Ltd. consumes the product and does not resell the product under consideration. The per unit price to unrelated customers was USD *** per Kg and to Wacker Mehoark Chemicals Pvt. Ltd. was USD *** per Kg. The Authority notes that the Wacker Chemicals (China) Co., Ltd. recorded a profit for exports to India. 54. Accordingly, the Authority computed the ex-factory export price taking into account exports to both related and unrelated customers. From the net invoice value, the Authority deducted the ocean freight, insurance, inland freight, port and other related expenses, packing cost, credit cost, bank charges, and commission as verified by the Authority. Accordingly, the export price at ex-factory level for Wacker Chemicals Fumed Silica (Zhangiiagang) Co., Ltd determined as above and the same is shown in the dumping margin table below. Non-coooeratins rters from China PR 5 5 . The export price in respect of the other exporters from China PR has been determined as per the facts available in terms of Rule 6(8) of the Rules. The ex-factory export price as determined is shown in the dumping margin table below. G.3.3 Normal Yalue for Korea RP OCI Companv Limited and UNID Global Corporation 56. OCI Company Ltd ("OCI") is engaged in the production of the subject goods in Korea RP and has sold the subject goods directly in the domestic market. During the period of investigation, OCI has sold the subject goods in the domestic market to unrelated parties only. The domestic sales are in sufficient volumes when compared with exports to India. During the course of verification, it was noted that OCI is captively producing the main raw material, Silicon Tetrachloride ("STC") which is used in the production of the PUC and is being treated as by-product. STC, used in the production of the PUC, is transferred from OCI's polysilicon plant using the benchmark prices prevailing in China PR. China PR is one ofthe subject countries in the present investigation, and is being treated as non- market economy country. The Authority, therefore, has not adopted the price of the raw material as claimed by OCI and replaced the same by raw material costs of the domestic industry. Rest all other costs as claimed by OCI have been accepted. The revised cost of sales ofthe PUC has been considered for ordinary course oftrade test. 57. To determine the normal value, the Authority conducted the ordinary course of trade test using the cost of sales determined as abcve to determine profit making domestic sales transactions. It was noted that OCI has sold +** MT of the subject goods having total invoice value of KRW ***. It is noted that OCI has sold subject goods both in bulk and packed forms in the domestic market, while it has exported the subject goods to lndia in packed form only. Thus, for fair comparison, the Authority has taken only the packed sales into account for determination of the normal value for OCL Page | 24 I

58. The Authority examined whether the profifmaking transactions are more than 8070 or not. If the profitmaking transactions are more than 80%, all transactions h the domestic sales are to be considered for the determination of the normal value and in cases where profit making transactions are less than 80%, only profitable domestic sales are to be taken into consideration for the determination of the normal value. In the present case, the profit- making transactions were more than 80% and, therefore, all the domestic sales transactions have been considered for the determination of the normal value. OCI has claimed adjustments for inland transportation, warehouse expenses, credit cost and packing cost and the same have been allowed by the Authority. Accordingly, the normal value at ex- factory level has been determined and the same is shown in the dumping margin table below. Normal Value for non-cooperadEglleduee$/exportersjfrou Korea RP
59. For all the non-cooperative producers/exporters from Korea RP, the Authority has determined the normal value at ex-factory level on the basis ofbest available information and the same is shown in the dumping margin table below. G.3.4 Export price for Korea RP Export price for OCI Companv Limited and UNID Global Corporation
60. During the POI, OCI has exported the subject goods directly to lndia as well as indirectly through an umelated Korean trader, namely, IJNID Global Corporation ("UNID'). OCI and UNID have provided all the relevant information in the requisite formats. It is noted from the response that during the POI, OCI has directly exported *** MT of the subject goods to India having total invoice value of USD ***. OCI has exported **'r' MT through UNID having total invoice value of USD **t!. OCI has claimed adjustments on account of inland freight, ocean freight, port and other related expenses, overseas insurance, custom broker fees, packing expenses, credit cost, bank charges and duty drawback. Al1 the adjustments have been allowed by the Authority except duty drawback. OCI has exported the subject goods to India in packed form only. Thus, the Authority has taken only the packed sales into account for determination ofthe export price. The ex-factory export price is as determined is given in the dumping margin table. Non- E orters from Korea RP 61 . For the non-cooperating exporters from Korea RP, the Authority has computed the expdrt price on the basis of best available information in terms of Rule 6(8) of the Rules and the same is shown in the dumping rnargin table below. G.3.5 Dumpine Marsin
61. The dumping margin determined for all the producers/exporters from China PR and Korea RP is shown in the dumping margin table below. Page 125

Dumping Marein Table H. ASSESSMENT OF INURY AI\D CAUSAL LINK H.l Views of the other interelted pafties 63. The following submissions have been made by the other interested parties with regard to injury and causal link: a. There is no causal link between the imports from Korea RP and China PR and the injury to the domestic industry. Injury if any has been caused by other factors. b. There is no correlation between the performance of the domestic industry and the imports from Korea RP. There is no increase in the imports from Korea RP and the imports from Korea RP are of non-pharma grade PUC. c. The domestic industry's performance and production have improved during the injury period. d. Price undercutting is as a result of difference between non-pharma grade exported by I the respondents and the product grades (pharml erade and non-pharma grade) sold by the domestic industry. e. It is an industry-wide known fact that pharma grade is sold at a sigrrificantly higher price than the non-pharma grades. f. The domestic industry is suffering from increase in capacity and a consequent increase in fixed cost. g. The decline in sales is attributable to the decline in domestic captive consumption. SN Subject Countries Normal Value Export Price Dumping Margin Amount % Range (US$/]vIT) (US$A,IT) (US$/IvIr) (o/o) (Range) A China PR 1 Shandong Dongyue Silicone Material Co., Ltd. 50-60 2 Wacker Chernicals Fumed Silica (Zhangii agang) Co Ltd., Wacker Chernicals (China) Co Ltd. & Wacker Metroark Chemicals Pvt. Ltd. 10-20 J All others 60-70 B Korea RP I OCI Company Limited & UNID Global Corporation Less than 2% 2 Al1 others 10-20 PaBe 126

h. The imports from non-subject countries with significant market share should not have been excluded from the scope of the present investigation. knports from Japan constitutes 18.06% and European Union constitutes 39.05% ofthe total imports ofPUC in the POI. This is significantly higher than the 6.44%o share of Korea RP. Volume of the imports from Japan increased appreciably. i. Imports of the subject goods and the raw materials from China PR by the domestic industry should be examined. j. lmports have remained at the same level in the POI as compared to the base year as well as the previous year. k. Iflow price imports were causing price suppression or depression in the lndian market, it would have either forced imports from the non-subject countries to reduce their prices or caused a decline in the imports from the third countries. l. lrnports excluding Korea RP constitute more than 93vo of the total imports during the irjury period. m. Imports from the subject countries have increased with the increase in demand. n. Untreated fumed silica is being substituted with precipitated silica in food, agro chernicals and local pharmaceuticals sectors which has led to decrease in the sales. o. The hends of price fiom the subject countries and the domestic industry have been increasing during the POI as compared to the base year 2016-17. p. The selling prices of mmginal operators in lndia is reflective of the low level of mmketing and sales overheads undertaken. q. The overall contribution (sales less CIF value) as eamed by the importer in India has rsrnained consistently high and in line with the industry standards. r. lncrease in the prices of silicon metal has further led to increases in the import price of the PUC with the latest import CIF value at Rs. ** * from China PR. The trend of import prices of the PUC from China PR is in direct, positive and near perfect correlation with the import price of silicon metal for the applicant. s. Capacity and domestic sales of the petitioner are increasing very frequently and with the increase in the capacity, the capacity utilization declined. t. A simple analysis of the financial statements of the applicant clearly shows that there is no injury to the domestic industry. u. The applicant has failed to specify as to why the import price from China PR should not be considered as a Non-Injurious Price (NIP) as defined under the Rules. v. The Desigrated Authority must also consider the impact on the domestic industry as a function of the overall equipment efEciency. w. The applicant has tried to distort the import data for untreated fumed silica from China PR vis-ir-vis European Union by consolidating the import irrespective of the grade, quality or application. x. The applicant's cost of production has been increasing despite a fall in raw material prices and a rise in the cost ofsales while the importers have faced increasing prices of the PUC. y. The applicant has incurred high depreciation and interest costs incurred during the course of the injury period. PaBe | 27 i

z. It is unclear as to how the captive consumption can be negative. It can be at best zero but not negative. aa. The applicant has requested for a cumulative assessment of injury to the domestic industry but has failed to provide any evidence or justification for the same. bb. The import price fell with a decline in the cost ofsales. However, the sales realization managed to rernain steady despite a small decline in the cost ofsales. cc. The applicant has faced healthy year-on-year growth throughout the injury and investigation period. dd. The applicant has not suffered losses during the entire injury period. ee. Pharmaceutical quality sales account for a decent part of the domestic industry's sales and cannot be co-mingled with the non-pharmac€utical quality. ff While there has been an increase in the volume of imports from China PR, the applicant continues to hold the majority of the market share in the domestic market. The volume indicators of the domestic industry also developed positively. gg. The domestic industry has not cited any reasons for import ofsubject goods from USA or the share of such imports as a oZ of total imports. hh. The applicant did not comment on why it is completely dependent on import of its key raw material fiom China PR despite the availability of altematives. ii. The issues mentioned in the Annual Reports of the petitioning company are not reflected anywhere in the petition such as market growth, intemal problems and impact of the pandemic COVID-19. jj. In 202l, there is a global shortage of silicon metal leading to increases in prices of the PUC which led to an increase in the average price of imports and the majority of downstream end-users are facing significant cost increases across industries. kk. Approximately 53% of the transaction-by-transaction import data from China has been treated as unknown, indeterminate or non-PUC data. ll. The overall market share for Jaychern Marketing along with other marginal operators does not exceed the acrual growth in the market demand in India. mm. The applicant must showcase the level of dumping margin and iljury margin separately for pharma grade and technical grade for apple{o-apple comparison. nn. The applicant has contradicted its own statements. In Para 29 ii (b), the applicant states "Whereas demand for the product increased by 4Yo..." whtle in Para 31 the applicant has stated "The demand for the subject goods has increasedby 25%...". oo. The applicant is claiming a reduction in the domestic sales during the POI but fails to mention the near halting of the entire automotive industry which is one of the major downstrearn consumers of the subject PUC. pp. A reduction in domestic market share from over 760/o to over 50% does not showcase any injury but rather showcases the establishment ofa free and open market economy. qq. The applicant continues to hold a higher profit as o/oage ofsales compared to the average ofthe chernical industry in lndia. rr. Despite a CPI ofover 557o since April, 2013, the pharmaceutical industry has only been able to increase its prices by an average 18%o on account oflow WPI. PaBe 128

ss. While making a material injury analysis, the Authority is required to evaluate the trend of the injury factors and indices and not merely make an end-point to end-point comparison of data. H.2 Views of the domestic iniurv 64. The submissions made by the domestic industry with regard to injury and causal link are summarized as below: a. The domestic industry has suffered injury due to dumping of the product under consideration as can be seen from the information contained in the application. b. The injury to the domestic industry is required to be assessed on a cumulative basis. c. Demand or apparent consumption of the subject goods has hcreased throughout the injury period. d. The volume of imports from the subject countries in absolute terms has increased tkoughout the injury period. Whereas the demand for the product increased by 4%, the subject imports inaeasdby 260/o. e. The imports fiom the subject countries in relation to production & consumption in tndia has declined from the base year 1n2017-18 and then increased till the POI. f. Imports are sigrificantly undercutting the prices ofthe domestic industry in the market. g. The cost of sales has increased fiom the base year in 2018-19 and slightly declined in the POI whereas selling price has declined from the base year in 20 1 7- 1 8 and thereafter increased till the POI. Comparison of cost of sales and landed price of imports of the subject countries shows that the landed price of imports is much below the level ofcost of production of the domestic industry for the product concerned. The selling price of the subject goods has not increased commensurate with the cost thereof. h. The subject goods have had a suppressing and depressing effect on the prices of the domestic industry. i. The subject imports are at prices sigrrificantly below the non-lnjurious price of the domestic industry, thus resulting in siguificant price underselling/ injury margin. j. The domestic industry has increased its capacity over the injury period. k. The production of the domestic industry has increased initially with addition of capacities but declined in the POI. l. The capacity utilization of the domestic industry has declined fiom the base year in 201'? -18, increased in 2018-19 and again declined in the POL m. The domestic sales ofthe domestic industry have declined in the period ofinvestigation. The market share of domestic industry has increased from the base year to 2018-19 and steeply declined in the POI even below the levels in the irase year. The imports have not only prevented the domestic industry from achieving its potential market share but also resulted in a decline in market share of the domestic industry from 76% to only 46%. n. Inventories increased by 123% in the POI when compared to the base year and inventory holding period during the period of investigation is the highest. o . The profitability of the domestic industry has declined sigrrificantly from the base year to 2017-18 and thereafter increased till POI. Cash profit and profit before interest have Page 129

also followed the same trend. The retum on investment has declined in 2017-18 as compared to base year thereafter rernained low till the POL p. The domestic industry is not able to compete with the cheaper priced imports from China PR and Korea RP and compelled to lower the supply price hence the profitability eroded and has lost its market to cheaper priced imports from China PR and Korea RP. q. The employment has been stable throughout the injury period except for a slight decline in the POI. r. The wages have increased throughout the injury period. However, wages are not solely dependent on the subject goods' performance. s. The productivity per day and productivity per employee has increased throughout the injury period except slight decline in the POI. t. The performance of the domestic indusry has deteriorated over the period. Both the volume and price parameters have shown deterioration in the period of investigation. u. The dumping margin is not only more than de-minimis but also substantial. The impact of dumping on the domestic industry is adverse. v. The domestic industry has recently increased its production capacities. The ability of the domestic industry to raise capital investrnent will be jeopardized if the subject imports from the subject countries remain unaddressed. w. The raw material prices over the period increased and but the import prices declined. x. There is no captive consumption involved and the products produced are sold in the market. Quality defective products generated during the period are shown as captive consumption. They are very negligible and vary between (0.1% -0.2%) of sales quantity. Captive consumption is negative as there is a reversal of consumption and net generation of C grade stock (quality defective products) reported as captive consumption in the data. Dwing the year 201 8- 19, the domestic industry has reprocessed *** Kgs ofC grade stock to normal untreated stock. y. The legal requirement for causal link is existence of "a" causal relationship and not existence of "the" causal link between dumped imports and injury. z. The import price from tle rest of the world shows the kind of prices prevailing for the product. It is also indicative of higher costs in these countries as compared to lndia. aa. The petitioner has *** direct consumers and *** dealers. The 10 dealers are in tum selling to a number of consumers. Such a lmge consumer base is not catered through individual price offers and negotiations. It can be catered only through price lists and application of the same. The domestic industry has lost sales to a number of customers who have either started or increased their sourcing from imports. bb. Under anti-dumping Agreement and the Indian anti-dumping rules, 3% of dumped imports to total is considered as significant and the affected domestic industry can seek relief under the antidumping law. In the present case, the imports from the Korea RP enjoy a significant share in the total imports ald demand. cc. The performance in the Annual Report is not indicative of the performance of the product under consideration as the applicant is a multi-product company. The applicant is not facing injury in treated fumed silica. Arurual Report shows that the profitability has eroded due to unfair pricing by exporters of the subject countries and also the market share dropped in the POI. Performance of the company mentioned is only Page 130

regarding the impact of COVID 19 lockdown in the month of March 2020 and not for the complete POI. dd. One of the key raw materials of PUC is Metallurgical Grade Silicon which is not available in India. China is the largest producer of Metallurgical Grade silicon in the world. The other major countries exporting MG Silicon are Norway, USA and South Africa. The applicant does import MG Silicon from these countries also. ee. The year 2021 is not the period of investigation and being original investigation, the Authority need not analyze the post POI data either for the product under consideration or the raw material prices. ff. The demand is more than the capacity of the domestic industry despite which the sales of the domestic industry have come down. Thus, the only factor responsible for the domestic industry's prices is the import prices ofthe product. gg. The data provided in the application establishes that injury is not due to other factors. hh. The subject countries account for 42%o ofthe total imports into the country. Other than that, the imports from European Union and Japan account for 57Yo of the total imports. However, the imports from the EU and Japan not only are at much higher prices than the subject imports, but also above the selling price of the domestic industry. ii. Conhaction in dernand has not caused injury to the domestic industry. jj. The performance of the domestic industry has been segregated between the domestic and export operations and the export performance is not a cause of injury to the domestic industry. kk. There has been no material change in the pattern of consumption of the product under consideration. ll. No trade restrictive practice, which could have conhibuted to the injury to the domestic industry. mm.The technology for the production process for producing product under considsration has not undergone any significant development. Possible developments in technology are not a cause of injury to the domestic industry. nn. The data provided relates only to the performance of the subject goods. Therefore, the injury suffered cannot be attributed to the performance of the other products that are behg produced and sold by the domestic industry. oo. The domestic industry imports raw materials from suppliers located in China PR. Those suppliers are not related to the domestic industry. pp. Price depression suffered by the domestic industry is due to dumped imports which has resulted in decline in profits, profit before interest, cash flow and retum on capital employed. qq. There is significant price underselling due to low priced dumped lmports as the landed price of imports are significantly below the non-injurious price of the domestic industry. rr. Market share of the domestic industry has decreased even though demand for the subject goods has been rising in India. ss. The producers in the subject countries reduced price to retain their volume and market in the country. Resultantly, the domestic industry was prevented from maintaining its market share even after commencing commercial production. Page | 31

II.3 Examination bv the Authority H,3.1 Cumulative Assessment 65. Article 3 of WTO Agreement and Annexure II of the Rules provides that in case where imports of a product from more than one country are being simultaneously subjected to anti-dumping investigations, the Authority will cumulatively assess the effect of such imports, in case it determines that: a. The margin of dumping established in relation to the imports from each country is more than two percent expressed as percentage of export price and the volume of the imports from each country is three percent (or more) ofthe import of like article or where the export of individual countries is less than three percent, the imports collectively account for more than seven percent of the import of like article, and b. Cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic articles. 66. In order to ascertain whether cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic articles, the following parameters have been examined: - a. Products supplied by different parties are like articles and are comparable in properties. b. Domestically produced products and imported products are interchangeable. c. There is direct competition between the domestic product and the imported product and inter-se between the imported product. d. Consumers are using domestic material and imported material interchangeably ald exporter and domestic industry have sold the same product to same set of customers. e. Import price from subject countries have moved in tandern. 67. The Authority notes that: a. the subject goods are being dumped into India from the subject countries. The margins of dumping from each of the subject countries are more than the de minimis limits prescribed under the Rules. b. the volume of imports from each of the subject country is individually morc thar,3%o of the total volume of imports. c. cumulative assessment of the effects of import is appropriate as the exports from the subject counkies not only directly compete with the like articles offered by each of thern but also the like articles offered by the domestic industry in the Indian market. 68. In view of the above, the Authority considers it appropriate to cumulatively assess the effects of dumped imports of the subject goods from China PR and Korea RP on the domestic industry. 69. Rule 11 ofRules read with Annexure II provides that an injury determination shall involve examination of factors that may indicate injury to the domestic industry, ".... taking into Page 132

account all relevant facts, including the volume of dumped imports, their effects on prices in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles....". In considering the effect of the dumped imports on prices, it is considered necessary to examine whether there has been a significant price undercutting by the dumped imports as compared with the price of the like article in lndia, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price hcreases, which otherwise would have occurred, to a significant degree. For the examination of the impact of the dumped imports on the domestic industry in India, indices having a bearing on the state of the industry such as production, capacity utilizatioq sales volume, inventory profitability, net sales realization, the magnitude, and margin of dumping, etc. have been considered in accordance with Annexure II of the Ru1es. H.3.2 Volume effect of the dumped imports on the domestic industrv a Assessmeut of demand/apparent consumption 70. For the purpose ofthe present investigation, the Authority has taken into consideration the demand or apparent consumption of the product in India as the sum of domestic sales of the lndian Producers aad imports from all sources. 71 . It is seen that the dernand of the product under consideration has continuously increased over the injury period. b. Import volumes from the subject countries 72. With regard to the volume of the Jumped imports, the Authority is required to consider whether there has been a significant increase in dumped imports fiom the subject countries, either in absolute terms or relative to production or consumption in India. For the purpose of injury analysis, the Authority has relied on the hansaction-wise import data procured from DGCI&S. The volume of imports of the subject goods from the subject country has been analysed as under: SN Particulars Units 2016-17 2017-18 2018-19 POI 1 Domestic industry sales KG Indexed 100 t23 130 t20 2 Sales of other domestic producers KG 3 Imports from Subject Countries KG 6,58,651 6,28,585 6,98,414 8,68,538 a China PR KG 5,58,t71 5,19,600 6,3t,204 7,35,418 b Korea PR KG 1,00,480 1,08,985 67,2t0 1,33,120 4 Imports from Other Countries KG 9,83,108 tt,34,561 10,83,239 1t,98,4 90 5 Total Demand KG Indexed 100 115 119 t23 SN Particulars Units 2016-17 2011-18 2018-19 POI 1 Imports from Subject Countries KG 6,58,651 6,28,585 6,98,414 8,68,538 Page 133

a China PR KG 5,58,r71 5,19,600 6,31,204 7,35,418 b Korea PR KG 1,00,480 1,08,985 67,2t0 1,33,120 2 Imports from Other Countries KG 9,83,108 1t,34,561 10,83,239 11,98,490 J Total lmports KG 16,41,759 1 7 6J 146 t7,81,653 20,67,028 73. It is seen that the volume of imports from the subject countries declined in 2017-18 and thereafter increased ti1l the POI. Further, the increase in the POI was quite sigrificant. Whereas the dernand increased merely by 4%o in the POI as compared to the preceding year, the import volumes increased by 260/o. ln absolute terms, whereas the demand increased by 1,27,958 kgs, the subject imports increasedby 1,7 0,124 kgs. It is also noted that the dumping margin is de-minimis in the case of the only responding producer- exporter from Korea RP. Subject Countries imports in relative terms c 74. It rs seen tlat: a. the imports from the subject countries declined in relation to gross imports in 2077 -78 and increased thereafter till the POI b. the imports in relation to production, consumption and sales of the domestic industry declined in 2017-18 and increased thereafter till the POI. c. the increase in imports in relation to gross imports, production, consumption in India and sales of the domestic industry in the POI was higher than the levels prevailing in the POI. II.3.3 Price effect of the dumoed imDorts 75. In terms of Annexure II (ii) of the Rules, with regard to the effect of the dumped imports on prices, it is required to be analyzed whether there has been a significant price undercutting by the dumped imports as compmed to the price of the like products in lndia, or whethd the effect of such imports is otherwise to depress prices or prevent price increases, which otherwise would have occurred, to a significant degree in the normal course. i SN Particulars Units 2016-17 2017-18 2018-19 POI Subj ect Countries import in relation to: 1 Total imports into India % Indexed 100 89 98 105 2 Indian Production % lndexed 100 '76 78 t04 J Domestic Sales o/o lndexed 100 78 8l 110 4 Consumption % Indexed 100 83 89 10'7 Page 134

a. Price Undercutting 76. For the purpose of price undercutting analysis, the net selling price of the domestic industry has been compared with the landed value of the imports from the subject countries. While computing the net selling price ofthe domestic industry, all taxes, rebates, discounts and commissions have been deducted and sales realization at ex-works level has been compared with the landed value of the dumped imports. Accordingly, the undercutting effects of the dumped imports from the subject countries has been worked out as follows: 77. It is seen that landed price of the subject goods fiom the subject countries is at prices materially below the selling price of the domestic industry in the POI. Price undercutting is positive and significant for both the subject countries. b. Price suppression and depression 78. In order to determine whether the dumped imports are depressing the domestic prices and whether the effect of such imports is to suppress prices to a sigrificant degree or prevent price increases which otherwise would have occurred in normal course, the changes in the costs and prices over the injury period, have been compared as below: 79. It is seen that: a. the landed price of imports from the subject countries was lower than the cost of sales of domestic industry in the POI. b. whereas both cost and price have increased over the injury period. c. In the POI, prices are depressed as compared to 2018-19. SN Particulars Units POI China PR Korea RP Subject Countries I Landed price Rs/KG 302 292 301 ) Net sales realization Rs/KG 3 Price undercutti ng Rs/KG 4 Price undercutting 70 5 Price undercutting Range 10-20 20-30 20-30 SN Particulars Units 2016-17 2017-18 2018-19 POI 1 Cost of Sales Rs/KG Indexed 100 109 109 112 2 Selling Price Rs/KG Indexed 100 94 105 106 3 Average Landed Price from subject countries Rs/l(G 264 268 325 310 Indexed 100 102 t23 117 H.3.4. Economic parameters of the domestic industry Page 135

80. Annexure II to the AD Rules requires that the determination of injury shall involve an objective examination ofthe consequent impact ofdumped imports on domestic producers of such products. With regard to consequent impact of dumped imports on domestic producers of such products, the Rules further provide that the examination of the impact ofthe dumped imports on the domestic industry should include an objective and unbiased evaluation ofall relevant economic factors and indices having a bearing on the state of the industry, including actual and potential decline in sales, profits, output, market share, productivity, rerum on investments or utilization of capacity; factors affecting domestic prices, the magnifude of the margin of dumping; actual and potential negative effects on cash flow, iaventories, employment, wages, growth, ability to raise capital investments. The various injury pararneters relating to the domestic industry are discussed herein below. The Authority has examined the injury parameters objectively taking into account various facts and arguments made by the interested parties in their submissions. a. Production. caDacity. sales and caDacity utilization
81. Capacity, production, sales and capacity utilization ofthe domestic industry over the injury period are as follows. Since the domestic industry has used the production facilities for production of untreated fumed silica as well as treated fumed silica, the Authority has evaluated the performance of the domestic industry in respect of both, individually and thereaft er collectively.
82. It is seen that: a. The domestic industry hcreased its capacities in the year 2017-18 and then again in the POI. It is seen that the demand for the product is increasing sigrr.ificantly. Further, capacities with the domestic industry are lower than the demand for the product in the country. With SN Particulars Unit 201G17 2017-18 2018-19 POI 1 lnstalled Capacity Plant KG Indexed 100 t46 146 151 2 Production Quantity Plant KG Indexed 100 125 1 5I 142 3 Capacity Utilisation % lndexed 100 85 103 94 4 Production Quantity PUC KG Indexed 100 126 t37 126 5 Production Quantity NPUC KG lndexed 100 104 313 324 6 Sales Quantity a Domestic KG Indexed 100 t23 130 120 b Export KG Indexed 100 ' c Captive Consumption KG ( ) lndexed 100 48 (s5) 89 Page 135

the rising capacities, the domestic industry has been able to cater to higher degree of dernand for the product in the country in the POI as compared to the base year. b. Production of the domestic industry for the untreated fumed silica increased till 2018-19 but declined in the POI. Production of treated fumed silica, however, increased throughout the injury period. However, the decline in the production in the POI was so sigrificant that gross production of the plant declined in the POI. The decline in production for untreated fumed silica is despite i-ncrease in demand for the product. Further, the decline in production is despite increase in capacity. c. The capacity utilization declined in 2017-18, increased in 2018-19 and thereafter declined in the POL The production had increased in 2017-18 and the decline in the capacity utilization was lmgely due to inqease in the capacity. Even if the capacity addition of the domestic industry in the POI is ignored, it is seen that the capacity utilization was lower than both the base year and the preceding year. d. Domestic sales increased consistently till 2018-19, but declined significantly in the POI even though the demand/consumption increased. The domestic industry suffered a decline of l0% in the POI as compared to the previous year. Demand in this period increased by 4o/o aad the subject imports increasedby 26%o. e. The Authority examined the trends in exports and captive consumption by the domestic industry. It is seen that the domestic industry had no exports, barring in 2018-19. Further, the captive consumption is nothing but processing of untreated fumed silica to treated fumed silica. The negative captive consumption in 2018-19 is due to accounting treatments and reversal of some captive consumption. However, captive consumption of untreated fumed silica is only ***o/i (cumulative for the injury period). b. Market share in demand 83. Market share of the domestic industry and of the imports is shown in the table below 100 84. It is seen that: a. The mmket share of the subject imports declined in 2017-18 and increased thereafter till the POI. The share of subject imports in the POI was higlrer than the base year. b. The market shme of domestic industry increased till 2018-19 and declined sigrificantly in the POI. The share of domestic industry in the POI was lower than the base year. c. The decline in the market share of the domestic industry is despite increase in capacity by the domestic industry. SN Particulars Unit 20tGt7 2017-18 201&19 POI I of domestic industry % lndexed 100 107 110 97 2 Import from subject countries % Indexed 100 83 89 107 3 Import from Other countries o/o Indexed 100 1 0I 93 99 4 Total Dernand % 100.00% 100.00% 100.00% 100.00% Indexed 100 r00 100 Page 137

d. The imports from the non-subject countries are significart but they are not causing injury because they are priced very high in comparison to the imports from the subject country. c. Profit/Loss. Cash Flow. Return on Capital Emploved 85. Profitability, retum on investment and cash profits ofthe domestic industry over the injury period is given in the table below: 86. It is seen that: a. The profits of the domestic industry declined significantly in 2017 -18, increased in 2018- 19 and again declined in the POI. b. The cash profits and ROCE declined sigrrificantly in 2017-78, increased in 2018-19 and thereafter declined in POI. c. Even when profits, cash profits and ROCE increased in the POI, the same were below the levels prevailing in the POI. d. While ROCE decline could be partly attributed to increase in capital employed, the profit before interest has remained aimost at the same levels. Thus, even when the domestic industry has doubled the capital employed over the injury period, it has eamed the same leve1 ofprofits. e. Whereas the domestic industry increased its capacity over the injury period and consequently its production and sales increased over the injury period, its profit before tax, profit before interest and cash profits were almost at the same levels in the POI as were prevailing in the base year. Despite 20Vo increase in domestic sales over the injury period, the profit before tax was lower than base year, whereas profit before interest was almost at the same level and cash profits increased by 7%0. SN Particulars Unit 2016-17 2017-18 2018-19 POI 1 Cost of Sales Rs/KG lndexed 100 109 109 112 2 Selling price Rs/KG Indexed 100 94 105 106 J Profit before tax Rs/KG Indexed 100 37 88 83 4 Total Profit before Tax Rs.Lacs Indexed 100 45 115 99 5 Total Profit before interest Rs.Lacs Indexed 100 63 1t'7 100 6 Cash Profit Rs.Lacs Indexed 100 59 12 1 106 ,7 Capital employed Rs.Lacs Indexed 100 237 188 203 8 Retum on capital ernployed % Indexed 100 27 62 49 PaBe 138

87. The interested parties have contended that whereas the domestic industry has claimed decline in profits, its Annual Report shows increase in profits. The Authority, therefore, examined the profitability of the domestic industry in respect of the PUC, other products and overall company's operations. The Authority notes that the domestic i-ndustry is engaged in production of only rurtreated fumed silica and treated fumed silica. Therefore, the Annual Report shows performance of these two products. The company provided information with regard to its overall operations and unheated fumed silica. The Authority, therefore, examined the performance of the domestic industry for overall operations, and segegated into untreated fumed silica and treated fumed silica. The table below shows profit4oss for the untreated fumed silica and treated fumed silica. Particular Unit 201G17 2017-18 2018-19 POI Untreated fumed silica Rs.Lacs lndexed 100 45 105 98 Treated fumed silica Rs.Lacs Indexed 100 885 2464 5186 Total for the company Rs.Iacs Indexed 100 56 135 164
88. The Authority further noted that whereas the production and the domestic sales of untreated fumed silica declined, that of treated fumed silica increased. It is thus seen that the performance of untreated fumed silica declined, whereas performance of treated fumed silica increased. The Authority notes that untreated fumed silica forms ***o/o lo ***o/o of the overall production. Further, the share of untreated fumed silica declined as compared to treated fumed silica. The performance of domestic industry has got materially impacted in respect of unheated fumed silica, whereas its performance for treated fumed silica improved, leading to overall improvement in performance of the domestic industry. d. Inventories
89. Inventory position with the domestic industry over the injury period is given in the table below:
90. It is seen that the inventories with the domestic industry declined sharply ir 2017-18. However, inventories increased thereafter rather significantly till the POI. The domestic industry is suffering from accumulation of invsntories. The inventories at the end of the POI were 39% higher than 2018-19. SN Particulars Unit 20tGt1 2017-18 201&19 POI I Opening Stock KG Indexed 100 70 90 85 1 Closing Stock KG Indexed 100 129 121 226 J Average KG Indexed 100 94 103 143 Page 139

e. EmDloYment Droductivitv and wases 91. Performance of the domestic industry with regard to employment, productivity and wages over the injury period was as follows: 92. It is seen that the number of employees has rernained constant over the injury period even though wages increased over the injury period and productivity of the domestic industry increased over the injury period. f. Growth 93. It is seen that the growth of the domestic industry in respect of various volume and price parameters was negative in the POI. Abilitv to raise capital investments 94. The Authority notes that the domestic industry has increased its production capacities. Further, the domestic industry has been profitable over the injury period. It is seen that the performance ofthe domestic industry is not impacted in respect of its ability to raise capital investments. SN Particulars Unit 20tGt7 2017-18 2018-19 POI I No of Employees Nos Indexed 100 100 100 98 2 Wages Rs.Lacs Indexed 100 103 100 t25 3 Productivity per day Kgs/Day Indexed 100 125 I 5 1 142 4 Productivity per employee NoA(gs Indexed r00 125 151 144 Particulars Unit 2016-17 20t7-18 201&r9 POI I Production % 26.26 8.30 (7.ss) 2 Domestic Sales Volume o/o 22.94 6.01 (8 I 8) 3 Capacity Utilisation % (14.96) 20.88 (8.3e) 4 Cost of sales % 8.98 0.00 2;71 5 Selling price % (s.77) 1l 1 2 1.18 6 Average stock o/o (5.78) 9.10 38.87 7 Cash Profit % (40.e1) 104.86 (12.04) 8 Retum on Capital Employed an (73.28) t33.32 (21 .03) 9 10 Profit before Interest and Tax Market share % % (36.s8) 84.77 (14.se) h. Magnitude of dumpins Page | 40

95. It is noted that the subject goods are being dumped into India and the dumping margin is positive and significant in the case of China PR. However, the dumping margin is de- minimis in the case of the only responding producer-exporter from Korea RP. i. FactorsaffeqdnLdqmesticprices
96. The examination of the import prices from the subject countries, change in the cost structure, competition in the domestic market, factors other than dumped imports that might be affecting the prices of the domestic industry in the domestic market shows that the landed value of the subject goods from the subject countries is significantly below the selling price of the domestic industry. The domestic industry is the sole domestic supplier ofthe product in the country. Landed price of imports from non-subject countries are much higher than the landed price of imports from subject countries and, therefore, could not have benchmarked the domestic prices. It is thus seen that the landed prices of subject goods from the subject countries are affecting the prices ofthe domestic industry. H.3.5 CON N N THE INJI]RY
97. The examination of the imports of the subject goods and performance of domestic industry shows that the volume of imports has increased in absolute terms as well as in relation to production and consumption in India over the injury period. The imports are undercutting the prices of the domestic industry. The price underselling is positive. The imports of the subject goods from the subject countries have resulted in price depression in the market.
98. While the capacity ofthe domestic industry has increased over the period, the production of untreated fumed silica declined h the POI, leading to decline in gross production, including treated fumed silica. Sales of the domestic industry, which were increasing till 2018-19, declined in the POI. The market share of subject imports is significant. While the market share of domestic industry increased till 2018-19, it has declined inthePOI. The capacity utilisation of the domestic industry has declined as a result of decline in production. The domestic industry has suffered in respect of profits before tax, profit before interest, cash profit over the injury period. The per unit profits generated by the PUC declined sigrificantly as compared to base year, leading to significant decline in retum on capital ernployed over the injury period. The dumping margin and injury margin are positive and sigrificant. However, the dumping margin is de-minimis in the case of the only responding producer-exporter from Korea RP. II.3.6 Iniurv Marein
99. The Authority has determined Non-Injurious Price (NIP) for the domestic industry on the basis of principles laid down in the Rules read with Annexure III, as amended. The non- injurious price of the product under consideration has been determined by adopting the information/data relating to the cost of production provided by the domestic industry and duly certified by the practicing cost accountant for the period of investigation. The non- injurious price has been considered for comparing the landed price from the subject countries for calculating the injury margin. For determining the non-injurious price, the PaBe | 41

best utilisation of the raw materials by the domestic industry over the injury period has been considered. The same treatment has been carried out with the utilities. The best utilisation ofproduction capacity over the injury period has been considered. It is ensured that no extraordinary or non-recurring expenses were charged to the cost ofproduction. A reasonable rehrm (pre-tax @ 22%) on average capital ernployed (i.e., average net fixed assets plus average working capital) for the product under consideration was allowed as pre-tax profit to arrive at the non-injurious price as prescribed in Annexure III ofthe Rules and being followed as per consistant practice of the Authority. l0O.Landed price of imports for cooperative producers/exporters from the subject countries has been determined on the basis of their questionnaire responses. For all the non- cooperative producers/exporters from the subject muntries, the Authority has determined the landed price based on facts available. 101.Based on the landed price and non-injurious price determined as above, the injury margin for producers/exporters has been determined by the Authority and the same is provided in the table below: I. NON-ATTRIBUTION ANALYSIS 102.Having examined the existence of injury, volume and price effects of dumped imports on the prices of the domestic industry, the Authority has examined whether injury to the SN Subject Countries Non- Injurious Price Landed Value Injury Margin Injury Margin Injury Margin (us$/MT) (us$/MT) (us$/MT) (%) @ange) A China PR 1 Shandong Dongyue Silicone Material Co., Ltd. 20-30 2 Wacker Chemicals Fumed Silica (Zhangjiagang) Co Ltd., Wacker Chemicals (China) Co Ltd. & Wacker Metroark Chemicals Pvt Ltd. () () (0-10) 3 All others 30-40 B Korea RP I OCI Company Limited & I-INID Global ,l Corporation I t0-20 2 All Othen 20-30 Page | 42

domestic industry can be attributed to any factor, other than the dumped imports, as listed under the Rules a. Imports from other sources lO3.Imports above de-minimis levels have been reported from Belgium, China, Germany, Japan and Korea. The Authority examined the volume, average import price and share of each of these countries. Volumes in Kgs 2016-17 2017-18 2018-19 2019-20 Belgium 2,17,320 2,42,900 1 24 000 1,04,000 China 5,58,171 5,19,600 6 3 I 204 7,35,418 Germany 5,37,862 5,67,364 6,41,595 7 03 14I Japafl 2,25,360 3,16,460 3,04,920 3,73,320 Korea 1,00,480 1,08,985 6'1,2t0 r,33,120 Average price Rs.,{Kgs 2016-17 2017-18 2018-19 2019-20 Belgium 368 354 367 381 China 239 247 300 289 Germany 378 353 384 393 Japan 338 307 320 332 Korea 280 266 326 292 Share in % 2016-17 2017-18 2018-19 2019-20 Belgium 13.24 13.78 6.96 5.03 China 34.00 29.47 35.43 35.58 Germany 32.76 32.18 36.01 34.02 Japan 13.73 t7.95 t7.tt 18.06 Korea 6.12 6.18 6.44 104.It is seen that: i. The import prices from each ofthe non-subject counkies were higher than the import price from China and Korea. ii. Since significant increase in the imports occurred in the POI, the Authority examined the trend in prices from the subject and the non-subject countries between 2018-19 and POI. It is seen that whereas import prices declined in the POI (as compared to 2018-19) from the subject countries, the import prices increased from the non-subject countries. b. Increase in demand 105.The demand of the product under consideration has increased over the injury period. Further, the domestic industry has lost market share to the subject imports in the POI, and Page 143

its production, domestic sales and capacity utilisation declined in the POI. Thus, the injury is not on account of any possible contraction in demand. c. Changes in the pattern of consumption 106.There is no evidence of any change in the pattem of consumption with regard to the product under consideration. Further, the demand for untreated fumed silica has shown increase over the injury period. The domestic industry has increased the capacities and sigrrifrcant imports are from non-subject countries as well. Therefore, there is no evidence of possible changes in the pattem of consumption that could have caused injury to the domestic industry. d. Trade restrictive practices of and competition between the foreip and domestic producers l07.There is no trade restrictive practice, which could have contributed to the injury to the domestic industry. The domestic industry is the sole domestic producer. Further, sigrrificant imports are from non-subject countries, that too from more than one source. Imports from different sources are at different prices. It is thus seen that there is enough competition within the domestic market. Imports from the subject countries have been found at dumped prices. e. Developments in technolory lO8.None of the interested parties have fumished any evidence to demonstrate significant changes in the technology that could have caused injury to the domestic industry. The domestic industry has added significant capacities over the injury period. f. Export performance 109.The injury information examined hereinabove relates only to the performance of the domestic industry in terms of its domestic market. In any case, barring 2018-19, the domestic industry does not have exports. Thus, the injury suffered cannot be attributed to the export performance of t}te domestic industry. C. Performance of other products being produced and sold by the domestic industry 110.The Authority has only considered the data relating to the performance of the subject goods. Therefore, performance of the other products produced and sold is not a possible cause of the injury to the domestic industry. J. EXAMINATION ON CAUSAL LINK 1 1 1.It is noted that other known factors listed under the Rules do not show that the domestic industry could have suffered injury due to these other kaown listed factors. It is also noted that the domestic industry has not suffered injury due to any other factor identified by the interested parties. The Authority examined whether the dumping ofthe product has caused Page | 44

injury to the domestic industry. The following parameters show that material injury to the domestic industry has been caused by dumped imports. a. Imports were undercutting the prices of the domestic industry. Further, the price undercutting is quite significant. Resultantly, the volume of imports has increased sigrificantly over the period. b. Whereas the market share of the subject impots has increased, that of the domestic industry has declined. Further, the domestic industry has lost sales volumes in the POI. Thus, the decline in market share of the domestic tdustry is due to decline in domestic sales of the domestic industry. c. The domestic industry lost domestic sales in the POI. Consequently, its production and capacity utilization declined in the POI, while inventories inqeased sigrrificantly. d. The per unit profits of the domestic industry declined over the injury period. Resultantly, the ROI declined over the injury period. e. Growth of the domestic industry was negative in the POI in both volume and price factors. f. The increase in subject imports in the POI was far beyond the increase in demand for the product in the mmket. Resultantly, the domestic industry lost market share, sales volumes, and consequently production and capacity utilization. I( POST DISCLOSTJRE COMMENTS K.l Views of the other interested parties 112.The following post-disclosure submissions have been made by the other interested parties a. The dumping mmgin determined for OCI Company Limited and UNID Global Corporation is less than 2Yo md the Authority may confirm it in the final findings. If there is any change, the Authority should issue revised disclosure statement and provide opportunity to the interested parties to offer the cornments. b. The dumping margin calculated for OCI is de minimis. Therefore, immediate termination of the investigation against OCI is warranted in the light of the Article 5.8 of the Anti-dumping Agreement & WTO Appellate Body in Mexico - Definitive anti- dumping measures on Beef and Rice. c. As per Section 9A (6A) of the Customs Tariff Act, 1975, the normal value shall be determined based on the records maintained by the producer/exporter. The Authority has disregarded the information for raw material Silicon Tehaqhloride ("STC") which OCI is captively producing. The actual records maintahed by the company reflect benchmark prices prevailing in China PR, and prices ofSTC in China PR are suitable benchmark. Funher, STC is not procured by them from China PR and, therefore, the raw material cost cannot be rejected on the ground that China PR is a non-market economy. d. The Authority may reconsider its decision regarding sq)arate PCNs for pharma and non-pharma grades to ensure 'app1e-to-apple' fair comparison ofprices and adopt PCN Page | 45

methodology for fair comparison between pharma grade PUC and non-pharma grade PUC and determine the dumping margin aad the injury margin for pharma grade PUC and non-pharma grade PUC sepmately. The observations of the Authority are inconsistent and irreconcilable with the import data of pharma grade and non-pharma grade e. The non-pharma grade cannot compete with the pharma grade PUC. The comparison of landed price of exports comprising only the non-pharma grade with the average non- injurious price of the domestic industry comprising pharma as well as non-pharma grade will show exaggerated injury margin and not reflective of the actual situation. The Authority may perform a segrnented analysis (pharmaceutical and technical quality) ofthe injury to come to an accurate frnding and not unduly punish fair imports. Such difference in the product mix leads to inaccuracy in (a) calculating and assessing ar accurate normal value and consequantly dumping margrL O) calculating and assessing an accurate non-injurious price and injury margin, (c) assessing the volume and price effects and other injury parameters and (d) assessing and establishing a causal link between the allegedly dumped imports and the irjury claimed. f A significant increase in the fixed costs of the domestic industry has led to the decline of the profitability of the domestic industry. The Authority should note the impact of high fixed costs and depreciation while assessing causal link between the imports and the injury to the domestic industry. The imports cannot be blamed for losses caused due to sudden increase in the fixed and depreciation cost. The Authority has not examined that why losses caused cannot be attributed to sudden increase in the fixed cost and depreciation cost. g. The claim of applicant that Untreated Fumed Silica is different from other synthetic Silica has been proven to be untrue as Precipitated Silica is a direct substitute in the majority ofthe applications. Precipitated silica while different in nature, its production process and the end products have the same properties and provide the same benefits to downstream users with Precipitated Silica being significantly cost effective in comparison. These common features are important to high volume industries like agrochernicals, silicon rubber, food processing industry, etc. h. The applicant has falsely claimed that the indexed version of information is not made available. This is either because the actual data relating to the imports has been considered as non-confidential or as the information was not relating to costs or capacity utilization. i. The import CIF value of the PUC is at Rs. 355 from China PR in the current year which is higher than the normal value based on CIF of imports from Japan. j. There has been significantrincrease in the landed price for the imports from China,PR from the period ofinvestigation to date. k. The applicant would be the singular benefactor of any ADD and all downsream customers will face with an undue increase in price beyond what is already faced.

1. A similar analysis should be made for all downstream customers who are currently facing additional pressures of an unsecure and uncertain supply and a widely varying dernand month-on-month. Page 146

m. The impact Analysis provided by the applicant clearly points out the additional burden on the already COVID stressed downstream customers. The supply chain costs have also increased sigrrificantly and the impact analysis is to ensure public interest for over downstream end users. n. The Authority should consider variable duty by notifuing reference price. Thus, importers like Jay Chem Marketing would be allowed the opporhrnity to not pay anti- dumping duty but rather ensure and abide by an import price higher than the set reference price. The Authority may reyise the prices to remove the dumping, or the injurious effect of dumping. o. Shandong Dongyue Silicone Material Co., Ltd has exported total 24 transactions out of which 3 transactions are on FOB and rest are of CIF. The Authority shall compute landed value of these 3 FOB transactions after converting into CIF price by adding notional impact ofocean freight and insurance to FOB values as claimed in Appendix- 3,A. of Shandong Dongyue filed with DGTR. p. The operathg or running cost of a plant manufacturing pharmaceutical quality PUC is sigrificantly higher due to the climate control, sanitation, and other manufacturing protocols which are in operation at all the times. q. Since normal value is based on the import data, the same should also be disclosed, along with the import prices from which countries have been included in determination of normal value. (Melamine from China PR case relied upon) r. The injury analysis must only contain an analysis of the 'dumped' imports and its effect on the domestic industry. s. The Authority should not recommend the imposition of any measures since the injury margin calculated for Wacker Chernicals (China) Co. Ltd, Wacker Chemicals Fumed Silica (Zhangiiagang) Co. Ltd and Wacker Metroark Chernicals Pvt. Ltd. is negative. IC2 Views of the domestic industrv 113.The following are the post-disclosure submissions made by the domestic industry: a. The imposition of anti-dumping measure on the imports of the product under consideration would be in the interests of the domestic manufacturers. Further, it is in *re consumers' interest and the public at large to have a competitive domestic industry capable of supplying the product in competition to the fair priced imports. b. The objective of imposition of the anti-dumping duty is to establish a level playing field, by removing any trade distortion by the producers in the subject countries and allowing the Indian industry an opportunity for fair competition. c. The impact of the duty on the eventual end products are miniscule. d. OCI has sold the subject goods both in bulk and packed forms in the domestic mmket, while it has exported the subject goods to India in packed form only. The Authority has taken only the packed sales into account for determination of the normal value for OCI. No PCN has been framed in the present case and such being the case, different types of the product cannot be excluded. Page | 47

e. OCI and UNID are related entities. As the sales are made to a related exporter, the export price should be determined from the selling price ofthose goods by the exporter to the independent buyers after making appropriate additional adjustments such as SGA, reasonable profit and the interest incurred by the related exporter. f. India chose to adopt lesser duty law. This is the first disadvantage created against the domestic industry. The NIP has been determined in this case by (a) changing the apportionment methods for major items of expenses and (b) by ignoring the legitimate business expenses. This has resulted in unduly low NIP and resultantly injury margin. g. The non-injurious price determined by the Authority may be reviewed, as this is too low to protect legitimate interests of the domestic industry. The cost of production reported by the applicant has been modified by the Authority without giving the proper justification for the same. ln spite, the fact that the allocation methods used by the company for calculating the COP for ADD purpose was as per the books of accounts maintained by the company and the same allocation method was used by company for inventory valuation and has been accepted by statutory auditors also. h. The selling price methodology will highly distort overhead allocation. There is no linkage between the price of the two products and the overhead expenses incurred. i. Special adhoc compensation is a component of salary paid to the ernployees and is the part of CTC of these employees. j . During Novernb er , 2019 , some of the equipments were installed and capitalised in the books. However, remaining activities to increase the capacity to *** MT were completed in March,202l atd were capitalised on 24.03.2021. k. The condensers are constructed with high end metals, and it takes long delivery period. Hance, this system was installed and commissioned in March, 2021 . l. The duty should be imposed as fixed amount expressed in terms ofUS$. I(3 Examinalisl bv the Authoritv 1l4.The Authority has examined the post disclosure submissions made by the other interested parties and notes that though most comments are reiterations which have already been examined suitably and addressed adequately in the relevant paras of the findings, the Authority examines the issues raised in the posldisclosure comments/submissions by the hterested parties and considered relevant by the Authority as below. a. With regard to the claim of domestic industry that related hader's expenses and profit should also be adjusted while calculating the ex-factory export price for OCI, it is noted that related trader's expenses and profit are required to be adjusted if the Authority adopts related trader's export price to Indian customers for working out the ex-factory export price. If the Authority adopts the price at which producer has sold the goods to the related hader for determination of ex-factory export price, then trader's expenses and profit are not required to be adjusted. The ex-factory price worked out by both the aforesaid methodologies would ultimately be same. In the present case, the Authority has adopted the sale price ofOCI to UNID for determination ofex-factory export price and therefore no adjustment for expenses incurred by IJNID and profit of UNID is Page 148

c required to be made while working out the ex-factory export price. The Authority has duly examined and noted that UNID has not incurred any loss with regard to exports of PUC to India and therefore there is no need for any adjustrnent on account of loss incurred by trader. b. With regard to the claim of domestic industry that Authority should not make packed to packed comparison for calculation of dumping margin for OCI as NIP has not been determined separately for packed and bulk products, the Authority notes that NIP has no relevance or pupose in calculation of dumping margin. NIP is used for calculation of Injury Margin. Dumping margin is the comparison of normal value and export price to lndia. In the present case, OCI has sold subject goods both in bulk and packed forms in the domestic market, while it has exported the subject goods to India in packed form only. Therefore, keeping in mind the principles of fair comparison enshrined in AD Rules, it is incumbent upon the Authority to consider only the packed sales into account for determination of the normal value for OCI. This is also in accordance with the consistent practice of the Authority. In one of the recently concluded investigation on "Rubber Chemical PX-l3" from China PR, Korea RP and USA, the Authority has adopted the same approach for calculation of dumping margin for the cooperating producer/exporter from Korea RP. As regards the contention that OCI has sold the subject goods both in bulk and packed forms in the domestic market while it has exported the subject goods to lndia in packed form only, the Authority reiterates that in order to have a fair comparison, it has taken only the packed sales into account for the determination of the normal value for OCI. d. As regards to the contention that the NIP determined is unduly low leading to ve,ry low margins, the Authority notes that the rules require the Authority to recommend ADD considering dumping margin and injury margin. If the injury margin determined is lower than the dumping margin, the Authority is required to consider such injury margin while recommending the duty. e. The non-injurious Price (NIP) based on the optimum cost ofproduction and the cost to make and sell the subject goods in India based on the information fumished by the domestic industry on the basis of Generally Accepted Accounting Principles (GAAP) and Annexure III to the Rules has been worked out so as to ascertain whether anti- dumping duty lower than the dumping margin would be sufficient to ronove injury to the domestic industry. Regarding the inconsistency in calculation of NIP, it is noted that the NIP has been calculated on the basis ofprinciples laid down under the Rules. The non-injurious price of the product under consideration has been determined by adopting the information/data relating to the cost of production provided by the domestic industry, duly certified by the practising cost accountant and examined by the Authority. Page 149

f. As regmds to the contention that there should be separate PCNs for pharma and non- pharma grades, the Authority reiterates that there is no difference in the raw material used or the production/manufacturing process involved whether for pharma or non- pharma grade. The only major difference between the two is that pharma grade requires more strhgent testing and higher specifications. However, this is not a result of any difference in the production process. It is only a result of quality testing' There is no material difference in the cost ofthe production of the pharma or the non-pharma grade g. As regmds to the contention that a sigrrificant increase in fixed costs of the domestic industry has led to decline of profitability ofthe domestic industry, the Authority notes that the causal link provision requires the investigating authorities, as part of their causation analysis, to examine all known factors other than dumped imports, which are causing injury to the domestic industry at the same time as the dumped imports. The Authority has ensured that injuries which are caused to the domestic industry by the known factors, other than dumped imports, are not 'attributed to the dumped imports'. h. As regards to the contention that precipitated silica is a direct substitute of the PUC in the majority ofthe applications, the Authority reiterates that "Precipitated silica" cannot replace "fumed silica" in many applications and the interested parties have not established that these two kinds of products are the same product in terms of their functionality, manufacturing process, raw materials, flrnctions & uses, production technology, plant & equipment, costs and prices. While other synthetic silicas are made from silicate solution in a liquid phase, fumed silica is manufactured in a gas phase at a vay high ternperature. It is also seen from the import data that there are significant differences in the price ofthese two types of products. The product has no substitute. Precipitated silica has low purity and is less efficient than fumed silica. There is huge diffsrence between the two. As regards to the contention that IWs Shandong Dongyue Silicone Material Co., Ltd. has exported a total of 24 transactions, out of which 3 transactions are on FOB basis and rest on CIF basis, the Authority notes that it has appropriately converted the FOB traasactions into the CIF prices, considering the adjustments claimed by the responding exporter. L. INDIAN INDUSTRY INTERESTS AIID OTHER ISSUES 115.Thg Authority recogrizes that the imposition of the anti-fi{mping duties might affect the price levels of the product in India. However, the fair competition in the Indian market will not be reduced by the imposition of the anti-dumping measures. On the contrary, the imposition of the anti-dumping measures would rernove the unfair advantages gained by the dumping practices, prevent the decline of the domestic industry and help maintain the availability of wider choice to the consumers of the subject goods. The purpose of anti- dumping duties, in general, is to eliminate injury caused to the domestic industry by the unfair trade practices of dumping so as to re-establish a sifuation of open and fair 1 Page | 50

competition in the lndian market, which is in the general interest of the country. knposition of anti-dumping duties, therefore, would not affect the availability of the product to the consumers. The Authority notes that the imposition of the anti-dumping measures would not restrict imports from the subject country in any way, and therefore, would not affect the availability of the product to the consumers. 1l6.The Authority considered whether imposition ofADD shall have adverse public interest. For the same, the Authority examined whether the imposition of the anti-dumping duty on imports ofthe product under investigation would be against the larger public interest. This determination is based on the consideration of the information on record and interests of the various parties, including domestic industry, the importers and the consumers of the product. ll7.The Authority issued gazette notification inviting views from all the interested parties, including the importers, the consumers and the other interested parties. The Authority also prescribed a questionnaire for the consumers to provide relevant information with regard to the present investigations, including possible effect of the ADD on their operations. The Authority sought information on, inter-alia, interchange ability ofthe product supplied by the various suppliers from different countries, ability of the domestic industry to switch sources, effect ofthe ADD on the consumers, factors that are likely to accelerate or delay the adjushnent to the new situation caused by imposition of the ADD. 1 l8.Three importers, namely, lv7s Jay Chern Marketing, Mumbai, lWs CJS Specialty Chemicals Private Limited and N{/s Wacker Metroark Chemicals Pvt Ltd have filed the questionnaire response in the mamer prescribed by the Authority. The Authority has considered the arguments of all the interested parties in the present findings and questionnaire response filed by these parties. Though the parties have contended that there shall be adverse effect ofproposed ADD on the public at large but none ofthese importers have provided any verifiable information to demonstrate the effect of the anti-dumping duty on the consumers. Further, in this regard, the Authority reiterates that the imposition of the anti-dumping measures would not restrict the imports from the subject countries in any way and, therefore, would not affect the availability of the product to the consumers. 1l9.Even though the Authority has prescribed formats for the users to quantify the impact of the ADD and elaborate how imposition of the ADD shall adversely impact thsm, it is noted that none of the interested parties have provided relevant information. It is, thus, noted that the interested parties have not established the impact of the ADD on the user industry with verifiable information. Further, the domestic industry has quantified the impact of the recommended anti-dumping duty on the consumer industry and submitted that the impact is meagre. 120.The Authority notes that the product is under free import category and, therefore, can be freely imported from various countries. The imposition of the anti-dumping measures would not restrict the imports from the subject countries in any way and, therefore, would Page | 51.

not affect the availability of the product to the consumers. The imposition of the anti- dumping duties, therefore, would neither affect the availability of the product to the consumers nor create monopoly. l2l.Further, the capacity utilization of the domestic industry is low in the period of investigation and declined as compared to the preceding year. The domestic industry had the potential to cater a much higher degree of demand in India. However, due to dumping of the product under consideration, the domestic industry was faced with unutilized capacity and had a lesser share in domestic market as compared to the subject imports. 122.It is noted that the interested parties have not demonstrated how the prices of subject goods have adversely impacted the consumers. On the other hand, the domestic industry has submitted quantified information showing that the impact of the proposed antidumping duty on the user industry would be miniscule. The domestic industry has submitted that the cost of the product under consideration in the final product is very minimal and will have almost no effect on the end-users. The product is mainly used in the production of Paracetamol (Dolo-650 mg), Resins - Gel coats, Enamel Paints (high gloss) and Garam masala / curry powders. The impact of anti-dumping evaluated on these end products is below 1%. From the information on record, it is also noted that the impact of anti-dumping duty is miniscule to the consumers of the product under consideration, and the Authority is of the view that the imposition of anti-dumping duty will be in public interest. 123.It is, thus, noted that while the interested parties have not established possible adverse impact of the proposed ADD on the user industry with verifiable information, even if it is considered that the imposition of the ADD might affect the price levels of the product manufactured using the subject goods, the impact ofthe antidumping duty on the eventual product would be insigrificant. Further, the fair competition in the lndian market will not be reduced by the antidumping measure, particularly if the lery of the ADD is restricted to an amount necessary to redress the injury to the domestic industry. The objective of the imposition of the anti-dumping measure is to rernove the unfair advantages gained by the dumping practices to prevent the injury to the domestic industry and help maintain the availability of a wider choice to the consuners of the subject goods. M. CONCLUSION & RECOMMENDATIONS l24.After examining the submissions made by the interested parties and the issuqs raised therein, and considering the facts available on record, the Authority concludes that: a. The product produced by the domestic industry is like article to the product under consideration imported from the subject country. b. The application contained all the information relevant for the purpose of initiation of investigation and the application contained sufficient evidence to justifu initiation of the investigation. PaBe 152

c. Considering the normal value and the export price for the subject goods, the dumping margins for the subject goods from the subject countries have been determined, and the margins are signifi cant. d. The domestic industry has suffered material injury. The examination of the imports of the subject product and the performance ofthe domestic industry clearly shows that the volume ofthe dumped imports from the subject countries has increased significantly in absolute terms and remained significant despite the significant capacity addition by the domestic industry and increase in its production. The imports from the subject country are undercutting the prices of the domestic industry. The imports are depressing the prices of the domestic industry. The capacity utilization declined and the inventories have increased in the period of investigation. e. The material injury suffered by the domestic industry has been caused by the dumped imports. f. Despite providing sufficient opportunity to the interested parties to quantiry the impact of the ADD and elaborate on how imposition of ttre ADD will adversely impact thern, none of the consumers have demonstrated possible adverse effect. The information on record shows that the non-imposition of the anti-dumping duty will adversely and materially impact the indigenous production, while imposition of the duty will not materially impact the consumer or the downstream industry or public at large. On the basis of the information provided by the interested parties and the investigation conducted, the Authority is of the considered view that the imposition of the anti- dumping duty will not be against the public interest. 125.The Authority notes that the investigation was initiated and notified to all the interested parties and adequate opportunity was given to the domestic industry, the exporters, the importers and the other interested parties to provide positive information on the aspect of the dumping, the injury, the causal link and the impact of proposed measures. Having initiated and conducted the investigation into the dumping, the injury and the causal link in terms of the provisions laid down under the Anti-Dumping Rules, and having quantified the impact of non-imposition and imposition of the ADD, the Authority is of the view that the imposition of the anti-dumping duty is required to offset the dumping aad the injury. The Authority considers it necessary to recommend the imposition of the anti-dumping duty on the imports ofthe subject goods from the subject countries. l26.Having regard to the lesser duty rule followed by the Authority, the Authority recommends the imposition of the anti-dumping duty equal to the lesser of margin of dumping and the r margin of injury so as to rsmove the injury to the domestic industry. Accordingly, the Authority recommends imposition of the antidumping duty on the imports of the subject goods, originating in or exported from the subject countries, from the date of the notification to be issued in this regard by the Central Government, equal to the amount mentioned in Col. 7 of the duty table appended below. The landed value of imports for this purpose shall be assessable value as determined by the Customs under Customs Act, 1962 and applicable level of custom duties except duties levied under Section 3, 3A, 88, 9, 9,A' of the Customs TariffAct, 1975. Page 153

SN Ileading Description Country of Origin Country of Export Producer Amount Unit Currency I I 3 4 5 6 7 8 9 I 281t2200 Untreated fumed silica China PR Any country including China PR lvl/s Shandong Dongyre Silicone Material Co., Ltd. 1,018 MT US$ 2 28112200 Untreated fumed silica China PR Ary country including China PR Wacker Chemicals Fumed Silica (Zhaogjiagang) Co. , Lrd. NIL MT us$ 3 28t t2200 Unteated fumed silica China PR Any coutrtry including China PR Aay producer other than SN 1. and 2. t,296 MT US$ 4 28t 12200 Untreated fumed silica Ary country other than China PR and Korea RP China PR Any t,296 MT USS 5 28112200 Untreated fumed silica Korea RP A.oy country including Korea RP OCI Company Limited NIL MT US$ 6 28112200 Utrtreated fumed silica Korea RP Any country including Korea RP Any producer other than SN 5. 373 MT US$ '7 28112200 UntIeated fumed silica Any country other than Korea RP and China PR Korea RP Any MT US$ Duty Table N. FTJRTHERPROCEDURE 127.An appeal against the order of the Central Govemment that may arise out of this recommendation shall lie before the appropriate Forum. Alant Sw Designated Authority ( Page I 54