Introduction

The objective of this article is to evaluate the provisions relating to the Particular Market Situation in India and other WTO member countries. This article also attempts at comparing the scope of the provisions relating to Particular Market Situation as envisaged under Indian law vis-à-vis similar provisions in other WTO countries.

The provision regarding Particular Market Situation is envisaged in Indian law through Section 9A(1)(c)(ii) of the Customs Tariff Act, 1975. In the opinion of the Author, the Particular Market Situation provided under Section 9A(1)(c)(ii) of the Customs Tariff Act, 1975 is restrictive to the extent that it only envisages a "PMS" in context of the Product Under Consideration (PUC) or like article and does not travel to existence of such situation in input/downstream product market. This is evident from the bare reading of the provision as explained hereinbelow:

  1. The chapeau of Section 9A(1)(c) as well as Section 9A(1)(c)(ii) refer to the normal value in relation to only the "article" under investigation and not to the inputs which go into the production and/or sales of the Product under Consideration;
  2. To elaborate, it may be seen that Section 9A(1)(c)(ii) refers to following three situations where the normal value can be constructed by disregarding the domestic prices:
    • 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 such sales (of the like article) do not permit a proper comparison, or
    • when because of the low volume of the sales in the domestic market of the exporting country or territory, such sales (of the like articles) do not permit a proper comparison.
  3. It is clear from the above that all the three situations mentioned in Section 9A(1)(c)(ii) i.e., no sales in ordinary course of trade, existence of particular market situation and low sales of domestic market, are only vis-à-vis the PUC. This position also gets cleared from the fact that the legislature in its wisdom qualified these situations with the terms "like article". Clearly, the term "such sales" qualifying the second and third situation in the provision is also in context of the sales of the "like article" only.
  4. The above position also gets established from the fact that the legislature has used the terms "market" in all three situations enumerated in Section 9A(1)(c)(ii). In terms of the general rule of interpretation, repeated terms in a singular provision can only have a singular meaning. Clearly, the reference to the "market" in the provision is vis-à-vis the market of the like article.

Thus, it is clear from the provisions of the law that in the Indian context the reference to the phrase "Particular Market Situation" is consciously and deliberately restricted to the PUC and there is no scope for extending the provision in the context of the inputs/downstream market of the PUC under the existing legal framework.

Examination of PMS in other WTO member countries

In contrast to Indian laws, the laws in Canada, USA, EU etc. also take into account any existing particular market situation in the input market on account of distortion in raw material/input market. The municipal law in the said countries is significantly different from the text in the Indian law and in the Anti-dumping Agreement. In fact, most of these countries have amended their municipal law to include the raw material distortions under the ambit of particular market situation to counteract the expiry of China's WTO Accession Protocol in 2016. The relevant portion of the legal provisions in these countries along with the corresponding amending provision is provided in the table below:

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It is clear from the above that the examination of market distortions in input market is carried out by certain countries on the basis of the mandate given by their municipal law. It is pertinent to note that the Indian law, as it exists today, does not envisage any examination of the input price distortion (if any). Further, the very fact that these countries preferred an amendment to include market distortions in input market in the ambit of particular market situation also establishes the fact that the present language of the relevant provisions of the Anti-dumping Agreement do not permit examination of the input pricing distortions. It is pertinent to note that the Indian law, in its current form, is entirely in line with the WTO provisions.

In view of the above, the Author is of the view that the existence of the Particular Market Situation, as envisaged under the Indian law is restricted to the examination of existence of such situation only in context of the Product Under Consideration or like article. Thus, unless the law contained in Section 9A(1)(c)(ii) of the Customs Tariff Act, 1975 is amended to include Particular Market Situation prevailing in input/downstream market, any such situation prevailing in Input/downstream market is of no consequence for the purpose of computing normal value as per the existing Indian laws.

Footnotes

i. Akshay Soni is working as an Associate Partner at ASL-Legal.

ii. https://www.congress.gov/114/plaws/publ27/PLAW-114publ27.pdf

iii. External link https://docs.wto.org/...

iv. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017R2321&from=EN

v. External link https://www.gov.uk/guidance/...

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.