The government may impose a provisional safeguard duty of 25 per cent on imports of single-mode optical fibre, used for signal transmission, based on a Commerce Ministry investigation that found a sudden and significant surge in the imports of the fibre.
The Directorate General of Trade Remedies (DGTR) , the ministry's investigation arm, initiated the probe in September following a complaint from the domestic industry.
The preliminary findings concluded that the product is being imported in increased quantities and may cause a serious damage to the domestic industry, DGTR said.
"Existing critical circumstances justify the immediate imposition of a provisional safeguard duty in order to save the domestic industry manufacturing like or directly competitive products," it said.
"Considering the critical circumstances and the extent of serious injury, pending final determination of rate of safeguard duty, a provisional safeguard duty of 25 per cent is proposed to be imposed on the imports of single mode optical fibre...from all countries, " according to a notification of the DGTR.
However, certain developing countries would be exempted from this decision, it said.
The finance ministry will take the final decision to impose the duty.
Safeguard duty is a trade remedy available to World Trade Organization member-countries. It is imposed to provide a level-playing field to domestic players in case of sudden and significant increase in imports of a product.
The application for the DGTR investigation was made by Sterlite Technologies and Birla Furukawa Fibre Optics.
The applicants had claimed that their profitability has considerably declined during this period and they are running in losses. They have also claimed that because the imports are coming at low prices, their companies were forced to reduce their prices, which has resulted in significant price depression.
The single-mode optical fibre is used for signal transmission with certain bands and for manufacturing optical fibre cable.