WORLD TRADE
ORGANIZATIONG/SG/N/6/IND/9
12 October 1999
(99-4280)
Committee on Safeguards Original:  English
NOTIFICATION UNDER ARTICLE 12.1(A) OF THE
AGREEMENT ON SAFEGUARDS ON INITIATION OF
AN INVESTIGATION AND THE REASONS FOR IT
INDIA
The following communication, dated 8 October 1999, has been received from the Permanent
Mission of India.
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Attached herewith is a copy of the Notice of Initiation of a Safeguard Investigation
(No. SG/INV/2/99 dated 15 September 1999) by the Director General (Safeguards) concerning
imports of "White/Yellow Phosphorus" into India.G/SG/N/6/IND/9
Page 2
OFFICE OF THE DIRECTOR GENERAL (SAFEGUARDS)
NOTICE OF INITIATION OF A SAFEGUARD INVESTIGATION
[Under Rule 6 of the Customs Tariff (Identification and Assessment
of Safeguard Duty) Rules, 1997]
F. No. SG/INV/2/99 New Delhi
15 September 1999
Initiation of Safeguard Investigation Concerning Imports of White/Yellow Phosphorus into India
1. An application has been filed before me under rule 5 of the Customs Tariff (Identification and
Assessment of Safeguard Duty) Rules, 1997 by Search Chem. Industries Limited (SCIL), Mumbai;
Phosphorus and Chemicals Travancore Limited PACT), Cochin;  and United Phosphorus Limited
(UPL), Mumbai, for imposition of safeguard duty on imports of White/Yellow Phosphorus into India
to protect the domestic producers against serious injury caused by the increased imports ofWhite/Yellow Phosphorus into India.
2. Product involved.  The applicants have alleged serious injury caused by the increased imports
of White/Yellow Phosphorus into India.  The pr oduct White/Yellow Phosphorus is classified under
sub-heading 2804.70 of the First Schedule to the Customs Tariff Act 1975 and under 20047003 of theIndian Trade Classification based on the Harmonize d Commodity Description (ITC).  White/Yellow
Phosphorus is an inorganic chemical with chemical formula P4.  The process for the manufacture of
Yellow Phosphorus involves conversion of Rock Phosphate in the presence of Silica and Coke in
Electric Furnace.  Yellow Phosphorus is colourless or white, transparent, crystal, having a waxy
appearance and darkens on exposure to light.  It is volatile, sublimes in vacuum at ordinarytemperature when exposed to light.  When exposed to air in the dark, it emits a greenish light and
gives off white fumes.  Yellow Phosphorus is used  in the production of intermediates like Phosphorus
Trichloride, Red Phosphorus, Phosphorus Pentasulphide, Aluminium Phosphite and Zinc Phosphite.
It is a building block for various agro chemicals which are extensively applied by the agricultural
sector besides finding applications in defence needs.
3. Domestic industry.  There are five companies in India who created capacity for production of
Yellow Phosphorus namely, UPL, Mumbai;  PACT, Co chin;  Excel Industries Limited, Mumbai;  Star
Chemicals Limited, Mumbai, and SCIL, Mumbai.  The two companies who have filed the present
application (supported by UPL who have transferred their plant and capacity to SCIL) account for the
total Indian production of White/Yellow Phosphorus as the other producers have suspended their
production.
4. Increased imports.  The Yellow Phosphorus is imported into India from Bulgaria; Chinese
Taipei (Taiwan); China, P.R.; Hong Kong, China; Germany; Japan; Korea, Rep. of; the Netherlands;
United Kingdom and the United States.
The imports of White/Yellow Phosphorus have s hown an increasing trend in absolute terms
as well as compared to domestic production.  Th e imports and domestic production of White/Yellow
Phosphorus during 1994-95 to 1998-99 have been as under:G/SG/N/6/IND/9
Page 3
Year Capacity
(including
Excel)Domestic
production (MT)CU
percentageImports (MT) Imports as
percentage of
domestic
production
1994-95 9,800 4,750 48.47 5,350 112.63
1995-96 10,300 5,684 55.18 7,493 131.83
1996-97 10,000 3,565 35.65 8,829 247.66
1997-98 10,000 465 4.65 12,391 2,664.73
1998-99 10,000 612 6.12 16,504 2,696.73
5. Injury.  The increased imports of White/Yellow Phosphorus have caused serious injury to the
domestic producers of White/Yellow Phosphorus in as much as the capacity utilization has declined
rapidly from 55.18 per cent in 1995-96 to as low as 4.65 per cent in 1997-98 and 6.12 per cent in1998-99.  The increase in imports as a percentage of domestic production has registered a phenomenal
increase from 112.63 per cent in 1994-95 to 2,696.73 per cent in 1998-99.
The market share of the domestic producers of White/Yellow Phosphorus in the total
domestic consumption of White/Yellow Phosphorus has also declined from about 42 per cent in 1995-96 to a low of 3.79 per cent in 1998-99.
6. The domestic producers have requested the imposition of safeguard duty on imports of
White/Yellow Phosphorus.  They have also requested for an immediate imposition of provisional
safeguard duty.
7. The application has been examined and it appears that prima facie  increased imports of
White/Yellow Phosphorus have caused and further threatened to cause serious injury to the domestic
producers of White/Yellow Phosphorus and accordingly it has been decided to initiate an
investigation through this notice.
8. All interested parties may make their views known by 25 October 1999 to:
The Director General (Safeguards)
5
th Floor, "D" Block
Indraprastha Bhawan, I.P. Estate
New Delhi – 110 002
(India)
9. All known interested parties are also being addressed separately.10. Any other party to the investigation who wishes to be considered as an interested party may
submit its representation so as to reach the Director General (Safeguards) within 21 days from the
date of this notice.
(Signed)
(R.K. Gupta)
Director General (Safeguards)
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