Commission Implementing Regulation (EU) 2024/1943 of 11 July 2024 imposing a provisional anti-dumping duty on imports of optical fibre cables originating in India

• (137) The increase in market share of the Union industry over the period considered must be accounted to two main factors: (i) price suppression suffered by Union producers (see Section 5.1) and (ii) the imposition of anti-dumping measures on Chinese OFC imports in November 2021. In a period of almost stable consumption, the market share of the Union producers was regained almost exclusively against the Chinese dumped imports. As explained below in Section 4.6.2.3, the Union industry could not fully benefit from the remedial effect of the anti-dumping duties against China as significant part of Chinese sales were taken over by the dumped Indian imports.

• (138) The Union’s industry captive market (expressed as a percentage of the free market consumption) showed an increasing trend over the period considered from 6,2 % in 2020 to 9,0 % in the investigation period. Captive market is OFC that have been used for connectivity purpose (drop cables, in-building cables and datacentres cables). There is an increased demand in the connectorized market, hence the increase of captive use of OFC. Given the higher prices of these products and the available spare capacity, Union industry choose to maintain the captive use business since it allows to differentiate products, to increase capacity utilization and lower the unit cost and had a positive impact on the overall profitability of the Union industry. Therefore, it did not have any negative impact on the overall economic situation of the Union Industry.

4.6.2.3.   Growth

• (139) Despite the anti-dumping measures in force on imports of OFC originating in China, the Union industry was not able to regain significant market share. Although the Chinese market share was reduced considerably from 37,5 % to 22,6 %, this was taken over by the dumped and non-dumped Indian imports, which increased significantly from 2,3 % to 6,3 %. Therefore, the Union industry was prevented from fully benefitting of the establishment of a level playing field with the Chinese imports and was prevented from increasing its production and sales volumes accordingly.

4.6.2.4.   Employment and productivity

• (140) Employment and productivity developed over the period considered as follows:

Table 7

Employment and productivity

	2020	2021	2022	Investigation period
Number of employees (FTE)	4 559	4 970	5 136	5 141
Index	100	109	113	113
Productivity (cable-km/FTE)	316	341	342	337
Index	100	108	108	106
Source: Verified macro-questionnaire.	Source: Verified macro-questionnaire.	Source: Verified macro-questionnaire.	Source: Verified macro-questionnaire.	Source: Verified macro-questionnaire.

• (141) The Union industry employment rose by 13 % from 2020 to the investigation period on an FTE basis. This development largely follows the trend in production volume shown in Table 5.

• (142) As the figures for production and employment mirrored each other closely, productivity in terms of cable-km per employee remained largely stable.

4.6.2.5.   Magnitude of the dumping margin and recovery from past dumping

• (143) The dumping margins of Indian dumped imports covering [6–8] % of the market share were significantly above the de minimis level. The impact of the magnitude of the actual margins of dumping on the Union industry was substantial, given the volume and prices of imports from the country concerned.

• (144) OFC have already been subject to an anti-dumping investigation. Definitive anti-dumping measures on imports from China were imposed in November 2021 and amended in August 2023 following an anti-absorption investigation (the ‘anti-absorption investigation’) ¹⁷. During the first half of the period considered, the situation of the Union industry, including its profitability level, was still affected by dumped imports from China, as discussed in Section 5 below. The Union industry could not fully benefit from the remedial effect of the duties on Chinese imports due to the absorption, from the Chinese exporters, of the initial anti-dumping duties and the significant increase of the Indian dumped imports, as explained below in recital (173).

4.6.3.   Microeconomic indicators

4.6.3.1.   Prices and factors affecting prices

• (145) The weighted average unit sales prices of the sampled Union producers to unrelated customers in the Union developed over the period considered as follows:

Table 8

Sales prices in the Union

	2020	2021	2022	Investigation period
Average unit sales price in the Union on the total market (EUR/ cable-km)	692	655	667	671
Index	100	95	96	97
Average unit cost of production (EUR/cable-km)	608	578	648	662
Index	100	95	107	109
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (146) Sales prices on the Union market to unrelated parties (the free market) decreased between 2020 and 2021 by 5 % and increased slightly in the following years, without however reaching the levels of 2020.

• (147) Although unit cost of production decreased in the period 2020-2021 by 5 %, in line with average prices in the free Union market, it showed an increase in the period 2021-IP (i.e. by 14,5 %), while sales prices increased only by 2,4 %. The cost increase between 2021 and the IP was mainly due to increases in raw material prices and employment costs in line with inflationary developments.

4.6.3.2.   Labour costs

• (148) The average labour costs of the sampled Union producers developed over the period considered as follows:

Table 9

Average labour costs per employee

	2020	2021	2022	Investigation period
Average labour costs per employee (EUR)	30 314	30 797	32 569	35 384
Index	100	102	107	117
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (149) The average labour costs per employee showed a steady increase over the period considered. This reflects the additional costs of workforce, including adjustments to inflation.

4.6.3.3.   Inventories

• (150) Stock levels of the sampled Union producers developed over the period considered as follows:

Table 10

Inventories

	2020	2021	2022	Investigation period
Closing stocks (cable-km)	51 590	55 261	44 930	62 559
Index	100	107	87	121
Closing stocks as a percentage of production (%)	3,6	3,3	2,6	3,6
Index	100	91	72	101
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (151) The stocks of the sampled Union producers fluctuated but overall increased by 21 % in the period considered. Given that the majority of the production takes place based on orders and customers specifications, inventories do not constitute a meaningful indicator of injury.

4.6.3.4.   Profitability, cash flow, investments, return on investments and ability to raise capital

• (152) Profitability, cash flow, investments and return on investments of the sampled Union producers developed over the period considered as follows:

Table 11

Profitability, cash flow, investments and return on investments

	2020	2021	2022	Investigation period
Profitability of sales in the Union to unrelated customers (% of sales turnover)	12,7	10,7	3,9	3,4
Index	100	84	31	27
Cash flow (EUR)	74 368 597	65 137 408	36 942 692	38 047 732
Index	100	88	50	51
Investments (EUR)	11 062 374	5 557 882	9 359 958	15 934 927
Index	100	50	85	144
Return on investments (%)	31	30	13	18
Index	100	96	41	57
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (153) The Commission established the profitability of the sampled Union producers by expressing the pre-tax net profit of the sales of the like product to unrelated customers in the Union as a percentage of the turnover of those sales.

• (154) The profitability decreased continuously throughout the period considered and dropped from 12,7 % in 2020 to 3,4 % in the investigation period. The most significant drop in profitability occurred in 2022 in parallel to a significant increase of the market share of the Indian dumped imports from [2–3] % to [6–8] %. During the period considered, the cost of the Union industry increased by 9 % while sales prices decreased by 3 %, which is due to the price pressure of the Indian dumped imports.

• (155) The net cash flow is the ability of the Union producers to self-finance their activities. The trend in net cash flow developed in line with the trend in profitability and showed a strong decrease over the period considered of about 50 %.

• (156) Investments dropped between 2020-2021 substantially by about 50 %. Over the period considered, the level of investments could be recovered and even increased by 44 % compared to 2020. However, investments remained overall at low levels since the beginning of the period considered and were mainly made to make efficiency gains, to maintain existing facilities and to perform research and development activities. As a direct result of the pressure from dumped imported, the Union industry had to postpone investments.

• (157) The return on investments is the profit in percentage of the net book value of investments. The return on investments developed negatively over the period considered and fell by 43 %. This negative development shows that, although investments continued to be made, in order to maintain and improve efficiency and competitiveness, the returns on those investments fell substantially over the period considered due to the impossibility for the Union industry to improve the profitability rate.

• (158) With returns on investments falling so quickly, the ability to raise capital in the future is clearly in jeopardy should the situation continually fail to improve.

4.6.4.   Claims related to the injury analysis

• (159) STL claimed that based on the questionnaire replies of the sampled Union producers, the situation of the Union industry had improved sufficiently, in particular regarding production and production capacity, unrelated and captive sales, exports, employment, and investments, and that the Union industry did therefore not suffer any material injury. STL further argued that Union producers were overall profitable with different levels of profitability due to different business models.

• (160) The Commission disagreed with STL’s conclusions. As set out in recitals (169) to (170), the analysis of the injury indicators showed that the Union industry suffered material financial injury in the form of lower profits and a drop in investments and on the return thereon.

• (161) In addition to that, as explained below in recitals (164) to (168), the analysis of sales through tenders indicates that the price erosion was further accelerating despite the measures in place against imports from China and would continue to do so due to the rapidly increasing dumped imports from India. The claims of STL in this regard were therefore rejected.

4.6.5.   Analysis of tenders

• (162) A vast majority of OFC is sold through tender procedures, whilst other OFC are sold via individual spot sales. In order to obtain the necessary insights into this market aspect, the Commission requested detailed information on tenders from the sampled Indian exporting producers, the sampled Union producers, importers and users. Information was requested on the characteristics of the tenders, such as process, timing and other relevant characteristics. No public tendering entity or telecom operator participated in the investigation and provided information.

• (163) The investigation showed a fragmented picture of tenders, including in terms of process, scope and outcomes. They can be organised by public or private entities such as large telecom operators. Negotiation in tenders can take place in different forms, such as e-auctions or direct bidding. The tender process will typically last 3-6 months from the announcement of the tender to the conclusion. Within one to two months after conclusion of the tender, purchase orders will be issued by the customer and deliveries will be made according to the terms and conditions defined in the contract. The investigation confirmed that the price represents the most important purchase criterion, considering that tenders are issued for products whose technical characteristics have been specified in detail ¹⁸.

• (164) The tendering process intensified competition, since the presence of the Indian exporting producers bidding at very low prices pushed the Union industry to reduce their prices to unsustainable levels in an effort to match the Indian bids and prevented them from passing on their cost increases to their customers. The tender conditions typically do not include a contractual obligation for the buyer to purchase the quantity tendered, whereas they include a contractual obligation for the supplier to supply the tendered quantity at the offered price.

• (165) Given that most of the market is supplied via tenders, the tender mechanism is the price setter in the market. Hence, the Indian exporter bidding at much lower prices than the Union industry, are, despite the still relatively low quantities sold, the ones setting the reference price that the Union industry is expected to match. This is confirmed also by the significant undercutting and underselling levels established in the investigation.

• (166) HFCL requested a separate injury analysis for sales through tenders on the one hand and for spot sales on the other hand, claiming that these would be two different market segments with different pricing strategies and demand behaviour.

• (167) HFCL did not provide any evidence to prove that the use of different sales channels would potentially have different injurious effects on the Union industry. Moreover, the investigation established that tenders constitute the major share of the market for OFC, as explained above in recital (162). On-spot sales are mainly carried out by the same telecom operators for small-scale projects or to complement quantities that were already subject to a tender. Therefore, in this case, the reference price for a given product type is still likely to be linked to the price agreed in the tender. Therefore, HCL’s claim was rejected.

• (168) Given the nature of tenders, a delayed effect needs to be taken into consideration. The subsequent delivery (and invoicing) of OFC following a won tender would take place in the months or years after the conclusion of the tender. Over the period considered the Union industry was suffering from the sales volume lost to the Chinese exporters before the imposition of the measures while, at the same time, facing competition from the dumped Indian exports whose effects, on sales volume, will persist also after the investigation period. Therefore, overall, the development on tenders confirmed the continued effect of price suppression. The increased presence of Indian exporting producers prevented the recovery of the Union industry from Chinese imports and is set to continue having a negative effect, in the absence of measures.

4.6.6.   Conclusion on injury

• (169) Several indicators showed a positive trend such as production, capacity, sales volume and market share as well as employment. However, the increase in the Union industry’s market share can be linked to the decrease of market share for imports from China, following the imposition of measures in November 2021, when the Union industry managed to regain some of the market share previously lost to the Chinese imports. Nevertheless, at the same time, the Union industry faced increased cost of production while the average Union sales prices showed a decreasing trend. Although it was expected that the measures against imports from China would lead to a relief for the Union producers, the strong increase in the market share of Indian imports showed that there was continued price pressure generated by Indian exports, with significant undercutting, and, in any event, price suppression throughout the period 2021-IP. This became clear in the significant drop in profitability and cash flow and eventually, the very low levels of investment.

• (170) On the basis of the above, the Commission concluded at this stage that the Union industry suffered material injury within the meaning of Article 3(5) of the basic Regulation.

5. CAUSATION

• (171) In accordance with Article 3(6) of the basic Regulation, the Commission examined whether the dumped imports from the country concerned caused material injury to the Union industry. In accordance with Article 3(7) of the basic Regulation, the Commission also examined whether other known factors could at the same time have injured the Union industry. The Commission ensured that any possible injury caused by factors other than the dumped imports from the country concerned was not attributed to the dumped imports. These factors were: non-dumped imports from India, imports from China, imports from other third countries, captive sales, increase of raw material and energy prices, supply chain disruptions due to the COVID-19 pandemic, anti-competitive behaviour of the Union industry, competition among the Union industry, and self-inflicted injury due to the effects of an initial increase in investments, capacity and stocks.

5.1.   Effects of the dumped imports

• (172) The deterioration of the Union industry’s situation coincided with the rapid increase of dumped imports from India which penetrated the Union market in substantial volumes, significantly undercutting the Union industry’s prices and, in any event, exercising significant price suppression on Union sales.

• (173) The volume of dumped imports from India increased (as shown in Table 3) from [48 000–59 000] cable-km in 2020 to [137 000–165 000] cable-km in the investigation period, representing an increase of 183 %. In terms of market share, the increase over the same period was from [2–3] % to [6–8] %, an almost three-fold increase (179 %). Over the same period (as shown in Table 6), the Union industry’s market share in the free market was less pronounced, from 40,4 % to 47,2 %, an increase of 17 % (6,8 percentage points) Therefore it can be concluded that it has been mainly dumped imports from India that took advantage of the decrease of the imports from China.

• (174) The average price of the dumped imports decreased significantly over the period considered by 46 % as described in Table 4 and were undercutting the Union industry’s sales prices on average by 37,2 % and 45,6 %. Sales prices of the Union industry on the Union free market to unrelated parties dropped overall by 3 % over the period on the basis of the analysis in Table 8.

• (175) The level of undercutting, in combination with the low profitability of the Union industry, shows that the dumped imports were at prices well below the Union industry’s cost of production, both via the mechanisms of tenders and via on-spot sales. This price behaviour prevented the Union industry from fully recovering the market share previously lost to the dumped Chinese import and eroded its profit levels since the beginning of the period considered. It has generated price suppression, and financial injury in terms of both depressed profitability and waning investments, jeopardising the existence of Union industry.

• (176) The Union industry, in an attempt to match the low, dumped prices set by the Indian producers and in order to defend its sales volume in a period of increasing costs, was not able to increase its prices at the pace of the increase of costs. This resulted in a profound profitability drop for all sampled Union producers.

• (177) Therefore, while the Union industry managed to increase their market share during the period considered, this was done at the expense of prices and resulting in significant decrease in profits (price suppression), to levels, which as explained in Section 6.1 below, are significantly below the target profit for this industry.

• (178) As described in recital (158) above, there was also evidence that certain planned investments and expansion projects of the Union industry had been cancelled or suspended due to the increase in Indian dumped imports.

• (179) It follows from the above that the increase of dumped imports from India prevented the Union industry from recovering market shares and from reaching sustainable levels of profit.

• (180) All three exporting producers claimed that there was no correlation between the imports from India and the material injury suffered by the Union industry. They argued that import levels from India were low and that prices were not at injurious levels. Given the above analysis, the Commission considered that the investigation clearly contradicted these views and rejected therefore these claims.

• (181) The Commission therefore concluded that there was a causal link between the dumped imports from India and the material injury suffered from the Union industry.

5.2.   Effects of other factors

5.2.1.   Non-dumped imports from India

• (182) The volume of non-dumped imports from India developed over the period considered as follows:

Table 12

Non dumped imports from India

	2020	2021	2022	Investigation period
Volume (cable-km)	[11 000 –14 000 ]	[41 000 –50 000 ]	[95 000 –118 000 ]	[67 000 –83 000 ]
Index	100	362	845	593
Market share (%)	[0 –1 ]	[1 –2 ]	[4 –5 ]	[2 –4 ]
Average price (EUR/ cable-km)	[214 –264 ]	[350 –432 ]	[370 –457 ]	[369 –456 ]
Index	100	164	173	172
Source: Verified exporting producer questionnaire.	Source: Verified exporting producer questionnaire.	Source: Verified exporting producer questionnaire.	Source: Verified exporting producer questionnaire.	Source: Verified exporting producer questionnaire.

• (183) Import volume and prices of the non-dumped Indian imports were based on the quantities reported by the sampled exporting producer for which no dumping was found. Since data were based on information relating to only one company, they were put in ranges in order to preserve confidentiality.

• (184) Import volume showed an increase from [11 000–14 000] cable-km in 2020 to [95 000 –118 000] cable-km in 2022, followed by a decrease to [67 000–83 000] cable-km in the investigation period. The market share followed the same trend and increased from [0–1] % in 2020 to [2–4] % in the investigation period. Import prices were undercutting the Union industry price by around [25–35] % during the investigation period. Given this development, it cannot be excluded that these imports had a negative impact on the performance of the Union industry and contributed to the material injury. Nevertheless, import levels and market share of the non-dumped imports remained throughout the period considered largely below the volume of the dumped imports from India and decreased in the investigation period. Therefore, the Commission considered that they did not attenuate the causal link between dumped Indian imports and the injury suffered by the Union industry.

5.2.2.   Imports from China

• (185) The three sampled exporting producers claimed that the Chinese imports caused the material injury to the Union industry rather than the Indian imports, noting that Chinese import volumes were much higher than the ones from India and that import prices were lower than the import prices from India.

• (186) The volume of imports from China developed over the period considered as follows:

Table 13

Imports from China

	2020	2021	2022	Investigation period
Volume (cable-km)	843 918	876 581	487 545	514 072
Index	100	104	58	61
Market share (%)	37,5	33,7	20,6	22,6
Average price (EUR/ cable-km)	532	572	774	687
Index	100	107	145	129
Source: Comext (Eurostat).	Source: Comext (Eurostat).	Source: Comext (Eurostat).	Source: Comext (Eurostat).	Source: Comext (Eurostat).

• (187) Imports from China decreased over the period considered from 843 000 cable-km in 2020 to around 514 000 cable-km in the investigation period. The market share decreased accordingly from 37,5 % to 22,6 %. This development can be linked to the anti-dumping measures on OFC from China that were introduced in November 2021 following the China investigation mentioned in recital (17) and the increase of anti-dumping duties in August 2023 following the anti-absorption investigation. As mentioned in recital (139), due to the still strong presence of the Chinese imports at prices absorbing the anti-dumping duties, the Union industry was not fully shielded from the dumping practice of the Chinese exporting producers during the period considered. Therefore, the Commission concluded that the Chinese imports may have negatively affected the Union industry’s situation and contributed to the injury suffered. However, following also the decision of the Commission to double the AD duties on OFC from China ¹⁹, the Chinese imports showed also a significant downward trend during the period considered, both in absolute and in relative terms. In addition, they showed an increasing price trend, with average prices above the average prices of the dumped imports from India. Moreover, the decrease in profits of the Union industry was much more pronounced in 2022 and during the investigation period, which suggests that it is the increasing Indian imports, rather than the decreasing Chinese imports, which caused injury to the Union industry.

• (188) Based on the above, the Commission rejected the claims from the Indian exporting producers and concluded that, even if Chinese imports may have had a negative impact on the situation of the Union industry during the period considered, they did not attenuate the causal link between dumped Indian imports and the material injury suffered by the Union industry.

5.2.3.   Imports from other third countries

• (189) The volume of imports from third countries other than India and China developed over the period considered as follows:

Table 14

Imports from other third countries

		2020	2021	2022	Investigation period
Morocco	Volume (cable-km)	26 431	72 886	87 911	103 567
	Index	100	276	333	392
	Market share (%)	1,2	2,8	3,7	4,6
	Average price (EUR/ cable-km)	598	438	659	725
	Index	100	73	110	121
United Kingdom	Volume (cable-km)	80 442	80 442	82 631	78 103
	Index	100	100	103	97
	Market share (%)	3,6	3,1	3,5	3,4
	Average price (EUR/ cable-km)	658	658	785	845
	Index	100	100	119	128
Türkiye	Volume (cable-km)	56 794	56 559	59 477	50 369
	Index	100	100	105	89
	Market share (%)	2,5	2,2	2,5	2,2
	Average price (EUR/ cable-km)	414	390	408	499
	Index	100	94	99	121
South Korea	Volume (cable-km)	83 410	69 787	71 045	38 803
	Index	100	84	85	47
	Market share (%)	3,7	2,7	3,0	1,7
	Average price (EUR/ cable-km)	604	585	723	797
	Index	100	97	120	132
Indonesia	Volume (cable-km)	64	2 523	58 233	35 734
	Index	100	3 946	91 079	55 889
	Market share (%)	0,0	0,1	2,5	1,6
	Average price (EUR/ cable-km)	10 960	3 850	973	1 039
	Index	100	35	9	9
Tunisia	Volume (cable-km)	39 486	47 284	36 414	33 996
	Index	100	120	92	86
	Market share (%)	1,8	1,8	1,5	1,5
	Average price (EUR/ cable-km)	658	737	847	756
	Index	100	112	129	115
Mexico	Volume (cable-km)	31 041	30 626	44 895	33 403
	Index	100	99	145	108
	Market share (%)	1,4	1,2	1,9	1,5
	Average price (EUR/ cable-km)	666	506	598	636
	Index	100	76	90	95
Switzerland	Volume (cable-km)	28 989	30 260	29 475	26 534
	Index	100	104	102	92
	Market share (%)	1,3	1,2	1,2	1,2
	Average price (EUR/ cable-km)	829	870	1 039	1 153
	Index	100	105	125	139
Other third countries	Volume (cable-km)	109 988	163 777	152 108	99 783
	Index	100	149	138	91
	Market share (%)	4,9	6,3	6,4	4,4
	Average price (EUR/ cable-km)	1 603	1 219	1 321	1 974
	Index	100	76	82	123
Total of all third countries excluding India and China	Volume (cable-km)	456 645	554 145	622 190	500 291
	Index	100	121	136	110
	Market share (%)	20,3	24,0	27,7	22,2
	Average price (EUR/ cable-km)	855	783	875	1 017
	Index	100	92	102	119
Source: Comext (Eurostat).	Source: Comext (Eurostat).	Source: Comext (Eurostat).	Source: Comext (Eurostat).	Source: Comext (Eurostat).	Source: Comext (Eurostat).

• (190) Imports from other third countries were from various sources. The countries with the highest imports volume and market share were Morocco and the UK.

• (191) Imports from Morocco increased from around 26 000 cable-km in 2020 to around 103 000 cable-km during the investigation period. Their market share increased from 1,2 % in 2020 to 4,6 % in the investigation period. However, as shown above, average price trends increased by about 20 % during the same period and were at significantly higher levels as those from the dumped imports from India and above Union industry’s prices in the IP. Therefore, the Commission concluded that Moroccan imports did not cause any material injury to the Union industry.

• (192) Import statistics related to the UK for the year 2020 were tainted by Brexit and not considered a reliable basis to establish import volumes and values for the UK for that year. Therefore, the Commission estimated the level of imports for 2020 at a similar level as the imports in 2021. On this basis, the UK imports had a rather stable trend, overall showing a slight decrease of 3 %, from about 80 000 cable-km in 2020 to about 78 000 cable-km during the investigation period. Their market share decreased accordingly from 3,6 % to 3,4 % in the same period. Considering that the average price for UK imports were significantly above the average price of Union, the Commission considered that they did not cause any material injury to the Union industry.

• (193) Imports from Türkiye were stable in 2020 and 2021, increased by 5 % in 2022 before dropping by 16 % in the investigation period. Overall, the imports had thus a decreasing trend of 11 % between 2020 and the investigation period. In absolute terms, imports decreased from about 56 800 cable-km in 2020 to about 50 000 cable-km in the investigation period. The market share remained relatively stable and decreased slightly from 2,5 % to 2,2 % in the period considered. Although the price level was below the one of the Union producers, no additional market share could be obtained. While the Commission could not exclude that those imports contributed to the injury of the Union industry, given their low and decreasing volume the impact was considered to be limited and the Commission therefore concluded that they did not attenuate the causal link between the dumped imports and the material injury suffered by the Union industry.

• (194) The Commission considered that imports from South Korea, Indonesia, Tunisia, Mexico and Switzerland were at very low levels throughout the period considered. With exception of Tunisia and Mexico they showed significant downward trends. Imports from Tunisia and Mexico had decreasing import volumes from 2022 to the investigation period. Average import prices from these countries were high and above the Union industry’s average sales prices. On this basis, the Commission concluded that these imports did not cause any material injury to the Union industry.

• (195) Imports from other third countries decreased moderately in the period considered in absolute terms from about 110 000 cable-km in 2020 to about 100 000 cable-km in the investigation period. The market share decreased from 4,9 % to 4,4 %. They showed high and increasing price levels and therefore, there are no indications that they caused material injury to the Union industry.

5.2.4.   Captive sales

• (196) As shown at Table 6, during the period considered the Union industry’s captive sales increased by 47 %.

• (197) However, as explained above in recital (138) the Commission found no evidence that captive sales had any significant impact on the evolution of the injury indicators. Therefore, the Commission concluded that the captive use did not cause material injury to the Union industry.

5.2.5.   Raw material and energy cost

• (198) All sampled exporting producers claimed that the injury suffered by the Union industry was due to the increase in raw material costs and energy prices.

• (199) As set out in recital (139), due to the price pressure of the dumped Indian imports, the Union industry was not able to increase its prices in line with the increase in its costs. Therefore, the increase in cost cannot be considered as the cause of injury, but rather a cost increase that could not be reflected in prices because of the dumped imports from India. These claims were therefore rejected.

5.2.6.   Effect of other factors

• (200) In addition to the factors analysed in the precedent recitals, STL claimed that the material injury suffered by the Union industry, if any, was due to supply-chain disruptions due to the COVID-19 pandemic, competition amongst the Union industry, self-inflicted injury due to increases in investments, capacity and stocks, as well as anti-competitive behaviour of certain Union producers referring to a 2014 anti-trust decision ²⁰ on producers of high voltage cables and subsequent decisions over the period considered in Brazil ²¹, Spain ²², and the UK ²³. Also, HFCL and Birla claimed that wrong investment decisions of the Union industry were the cause of the material injury allegedly suffered.

• (201) In recital (156), the Commission analysed the overall investment with the conclusion that investments of the Union industry had been at very low levels and at the minimum necessary to sustain operations throughout the period considered. The Commission also considered that the Covid-19 pandemic had only a very limited and temporary impact on the Union industry, considering that the period considered is from 1 January 2020 until 30 September 2023, while the COVID-19 pandemic was between 2020 and 2022. In addition, no evidence was provided regarding the alleged supply chain disruptions and the investigation did not reveal any specific evidence in this regard. As regards the alleged anti-competitive behaviour of the Union industry, the Commission notes that the antitrust investigation to which the exporting producer referred to, was related to high voltage power cables ²⁴ and therefore not relevant for the product concerned. The impact of changes in the level of investments, stocks and capacity was analysed in detail during the investigation as indicated in recitals (156), (151) and (132) and the Commission concluded that their impact was very limited. In particular, in contrast to what was claimed, the investigation revealed that stocks and investments of the Union industry remained at a very low level. As regards the competition amongst Union producers, the Commission considered that fair competition is encouraged in a free market and cannot be considered as a cause of injury. The investigation did not bring into light any evidence that it could have had any injurious effect.

• (202) All the claims regarding possible other factors that may have caused the material injury suffered by the Union industry were therefore rejected.

5.3.   Conclusion on causation

• (203) The Commission established a causal link between the material injury suffered by the Union industry and the dumped imports from India. The increase of dumped Indian imports coincided with the deterioration of the Union industry’s situation. The sharp increase of dumped imports from the country concerned was made at prices significantly undercutting the Union industry’s sales prices at levels even below the cost of production of the Union industry. They thus prevented the Union industry from setting prices at sustainable levels necessary to achieve reasonable profit margins. To the contrary, price levels could not match the increase in costs with significant negative effects on the profitability and investment levels of the Union industry.

• (204) The Commission distinguished and separated the effects of all known factors on the situation of the Union industry from the injurious effects of the dumped imports. The Commission concluded that other factors namely the imports from China, the non-dumped imports from India and imports from Türkiye may have contributed to the material injury suffered by the Union industry but, given their cumulated import volumes and price developments, did not attenuate the casual link between the dumped imports from India and the material injury suffered by the Union industry. Indeed, the market share of imports from these countries decreased from 41,7 % to 29,5 % while their prices increased by 31 % over the period considered. In contrast, the dumped imports from India had an increasing market share coupled with a constant price reduction, which coincided in time with the injury suffered by the Union industry. Therefore, none of the other known factors explained the Union industry’s negative developments in terms of price suppression and profitability, its low investments levels and the negative development on the return on investments.

• (205) On the basis of the above, the Commission concluded at this stage that the dumped imports from the country concerned caused material injury to the Union industry and that the other factors, considered individually or collectively, did not attenuate the causal link between the dumped imports and the material injury.

6. LEVEL OF MEASURES

• (206) To determine the level of the measures, the Commission examined whether a duty lower than the margin of dumping would be sufficient to remove the injury caused by dumped imports to the Union industry.

6.1.   Injury margin

• (207) The injury would be removed if the Union industry were able to obtain a target profit by selling at a target price in the sense of Articles 7(2c) and 7(2d) of the basic Regulation.

• (208) In accordance with Article 7(2c) of the basic Regulation, for establishing the target profit, the Commission took into account the following factors: the level of profitability before the increase of imports from the country under investigation, the level of profitability needed to cover full costs and investments, research and development (R & D) and innovation, and the level of profitability to be expected under normal conditions of competition. Such profit margin should not be lower than 6 %.

• (209) The complainant suggested a target profit of 13,4 %, referring to the China investigation ²⁵, and emphasized that high profit levels are required in this heavily investment-driven industry, which spends significant financial resources on research and development, to be able to invest in future technologies and in particular to develop the 5G network in the Union. Some Union producers claimed that a target profit of 15 % should be used.

• (210) The Commission noted that the target profit established in the China investigation was 12,4 %. The Commission examined these claims, together with the comments submitted by the exporting producers and the data available on the case file relevant to the requirements of Article 7(2c) of the basic Regulation in order to set the target profit.

• (211) Birla disputed the appropriateness of the target profit used in the China investigation, in the economic context of the current investigation. Birla questioned the necessity of additional investments by the Union industry, since substantial investments have already been made to develop the 5G network in the Union. It also argued that the Union industry could not expect to reach excessively high profit margins while at the same time carrying out massive investments. Furthermore, Birla argued that telecom operators in the Union, the main customers of OFC, were facing increasingly difficult market conditions and could not sustain the high profit margin expectations of the Union OFC producers.

• (212) STL claimed that the target profit established in the China investigation was irrelevant, since the target profit must be based on the level of profitability before the increase of imports from the country subject to the current investigation, i.e., India. In response to this claim, the complainant submitted that the Indian producers have not provided any arguments demonstrating any change in circumstances that would show that the target profitability established in the China investigation would no longer be appropriate. STL in addressing this argument claimed that the target profitability established in the China investigation was based on a different economic reality and is thus irrelevant for the present investigation. The relevant timeframe for calculating the target profit margin should be post-2020. In addition, STL claimed that starting from 2022, there was a significant increase in the level of the complainants’ investments compared to the investigation period of the China investigation (1 July 2019 to 30 June 2020), which meant a change in circumstances compared to the investigation concerning imports of OFC from China.

• (213) As regards the need for future investments in OFC production, the Commission noted that in its last report on the ‘State of Digital Communications’, the association of European Telecom Network Operators (ETNO) has revised upwards its forecasts for the deployment of Fibre-To-The-Home (FTTH) networks in the Union, suggesting strong future demand ²⁶. Therefore, the Commission rejected the claim that no further investments would be required.

• (214) Regarding the claim that telecom operators could not sustain high profit margin expectations from the Union industry, the Commission noted that OFC represents a very small portion of EU telecom operators’ capital expenses, which according to ETNO reached 59,1 billion EUR in 2022 ²⁷. Considering a total Union consumption of around 2,5 million cable/km ²⁸ and an average price of 756 EUR per cable/km ²⁹, the expenses related to OFC would represent around 3 % of telecom operators’ investments. Moreover, the purpose of establishing the target profit is to determine the profitability that the Union industry would be able to achieve in the absence of dumped imports, including considerations of certain future investments. Whether duties are not against the overall Union interest is examined below in recitals (223) to (226) where amongst other, the possible impact of duties on downstream industries is addressed. The claims of Birla and STL in this regard had therefore to be rejected.

• (215) As regards the STL’s claim that the target profit must be based on the level of profitability before the increase of imports from the country subject to the current investigation, the Commission recalled that the target profit must be established taking into account a number of factors, including in particular the level of profitability to be expected under normal conditions of competition. This claim was therefore also rejected.

• (216) In this respect, the Commission concluded that that Union industry’s prices were suppressed in the investigation period mainly due to the dumped imports from India. Likewise, the economic reality before the increase of imports from India, i.e., before 2020, was equally affected by the presence of the dumped imports from China. Therefore, the profits during this period were not considered a suitable basis for establishing the target profit. The Commission therefore examined the profitability of the Union industry on the basis of the profits achieved before the period affected by imports from both China and India.

• (217) As concluded in the China investigation, in 2015 and 2016, the sampled Union producers were able to maintain consistent profits of 12,6 % and 12,4 % respectively. Those years were considered to be the most representative for the profitability under the normal conditions of competition in this industry.

• (218) The Commission considered that such analysis is still valid, in particular considering that during the period considered in the current investigation prices were still partly depressed by the Chinese imports, as established in the anti-absorption investigation. Therefore, the Commission concluded that a target profit of 12,4 % would still reflect the level of profitability to be expected under normal conditions of competition. Therefore, the argument that an increase of investments would constitute a ‘change in circumstances’ which would require a new evaluation of the target profit, was rejected.

• (219) In accordance with Article 7(2d) of the basic Regulation, the Commission assessed the future costs resulting from Multilateral Environmental Agreements, and protocols thereunder, to which the Union is a party, and of ILO Conventions listed in Annex Ia that the Union industry will incur during the period of the application of the measure. There were no such future costs reported by the Union industry. On this basis, the Commission calculated a non-injurious price for the like product of the Union industry by applying the target profit of 12,4 % (see recital (217)) to the cost of production of the sampled Union producers during the investigation period.

• (220) The Commission then determined the injury margin level on the basis of a comparison of the weighted average import price of the sampled cooperating exporting producers for which dumping was found in India, as also established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the sampled Union producers in the Union market during the investigation period. Any difference resulting from this comparison was expressed as a percentage of the weighted average import CIF value.

• (221) The injury elimination level for ‘other cooperating companies’ and for ‘all other companies’ is defined in the same manner as the dumping margin for these companies (see recitals (91) to (94)).

Company	Dumping margin (%)	Injury margin (%)
MP Birla Group	6,9	86,7
Sterlite Technologies Limited Group	11,4	41,2
Other cooperating companies	9,0	63,1
All other companies	11,4	86,7

7. UNION INTEREST

• (222) In accordance with Article 21 of the basic Regulation, the Commission examined whether it could clearly conclude that was not in the Union interest to adopt measures in this case, despite the determination of injurious dumping. The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, importers, and users.

7.1.   Interest of the Union industry

• (223) The Union industry is composed of 14 producers or groups or producers, employing about 5 140 staff (FTE). The producers are widely spread throughout the Union.

• (224) The imposition of measures would increase the price levels in the Union and thus allow the Union industry to increase its prices in line with the increase in its cost of production. This will result in more sustainable profit levels allowing the Union industry to increase its investment levels and resume its investments in innovations that are necessary for the Union industry to maintain a competitive position in the market and to maintain its market presence, as well as recover the market share lost to the Chinese dumped imports in the past.

• (225) The non-imposition of measures is likely to have a significant negative effect on the Union industry in terms of further price suppression and possible depression. A further price decline would mean that the Union industry will be lossmaking in the short term. To avoid a deterioration of its profitability, the Union industry may decide to maintain its current price levels, which are, however, already unsustainable; or to increase its prices at the expense of sales. This will lead to an immediate reduction of production volume. Furthermore, this situation will prevent the Union industry to increase its investment levels, necessary to defend its presence in the market by offering innovative solutions and product developments. As a consequence, the Union industry will be subject to a further financial deterioration in terms of profitability and investments, jeopardising its future. Should measures not be imposed, it could be expected that the increase of dumped imports from India would continue and even increase significantly, given the substantial undercutting margins, and the nature of the market, which is driven by tenders having long-term effects. In that situation, the Union industry would be unable to recover from the injurious effects.

• (226) It is therefore concluded that provisional measures are in the interest of the Union industry.

7.2.   Interest of unrelated importers

• (227) On the date of initiation, 51 importers and users were contacted and invited to cooperate in the investigation. One importer registered as an interested party but did not provide a questionnaire reply. Consequently, no unrelated importer cooperated during the investigation.

• (228) In the absence of cooperation from unrelated importers, the Commission was not able to determine the precise impact of anti-dumping duties on their businesses. In the China investigation, the Commission established that importers enjoyed profit margins of over 20 % and duties could be either absorbed or at least partially be passed on to their customers ³⁰. The current investigation has not brought into light any facts or evidence contradicting these findings.

• (229) While the anti-dumping measures are likely to have a certain negative impact on importers and may reduce their profitability, the Commission considered that importers will be able to absorb and/or pass on some of the cost increase caused by the duty to their customers. They also have the possibility to find alternative sources of supply, including India at non-dumped prices. Therefore, the Commission concluded that unrelated importers will not be disproportionally affected by the imposition of the measures.

7.3.   Interest of users, installers, and distributors

• (230) The product under investigation is sourced by several industries, mainly telecom operators, public sector bodies (such as municipalities) owning or controlling fibre networks, installers, and distributors. None of these parties cooperated.

• (231) Only one user active in the telecoms industry cooperated during the investigation. The user’s reply to the questionnaire did not contain any arguments or information on Union interest aspects. This user did not import OFC from India and did not express either support or opposition to the measures.

• (232) The Commission also considered that, as outlined in recital (213), OFC constitutes only a minor part of the users’ overall costs, as the main cost driver for the fibre deployment is related to civil works.

• (233) Therefore, it was concluded that measures would not disproportionally affect users.

7.4.   Supply on the Union market

• (234) STL argued that the Commission imposing anti-dumping measures on imports of OFC from India would be to the detriment of a resilient and self-sufficient OFC supply chain in the Union. This claim was not further developed. The exporting producer also did not provide any evidence, further information, or analysis in support of this claim.

• (235) The investigation has shown that there were multiple sources of supply available in the Union market. Countries other than India and China (the largest being Morocco and the UK) constituted 14,5 % of the total market share in the Union and there were also non-dumped imports from India. In addition, as shown in recital (130), the Union industry had a spare capacity of almost 40 % that could be used to supply the Union market. This argument was therefore rejected.

7.5.   Competitive situation on the Union market

• (236) The same exporting producer claimed that the Union market is dominated by a group of large producers, and imposing measures would accentuate this situation which can lead to harmful effects, such as higher prices, less choice for consumers, and an increased risk of anti-competitive behaviour by the Union industry.

• (237) As above, the exporting producer did not further develop this claim no provide any evidence, further information, or analysis in support of this claim.

• (238) The Commission considered that the Union industry consisted of 14 Union producers or groups of producers that were competing which each other on the Union market, in addition to the non-dumped imports from India, imports from China and other third countries. The level of competition was therefore considered sufficiently high. The claim regarding the risk of anti-competitive behaviour of the Union industry in the future is highly speculative and was rejected.

• (239) All claims regarding the competitive situation on the Union market were therefore rejected.

7.6.   Other factors

• (240) OFCs are needed to build fast broadband networks. They are therefore of high importance for citizens, businesses and public entities across the Union, who depend on these networks for home working, home learning, for running a business or providing services. The investment through the NextGenerationEU programme ³¹ is one of the main priorities of the European Union which also aims to deploy high technology broadband infrastructure reaching every corner of the EU. Optical fibre cables are thus key for the EU Digital Decade ³² and also for its digital sovereignty.

7.7.   Conclusion on Union interest

• (241) The imposition of anti-dumping measures would release the Union industry from the price pressure in the Union market caused by the dumped Indian imports and enable them to increase their prices in line with cost increases. This would have a positive impact on their profitability and investment levels and enable them to defend their market position and invest in new technologies. Finally, survival of the Union producers is key for the EU’s digital sovereignty. In contrast, the non-imposition of the measures would lead to a rapid further deterioration of the Union industry’s profitability and would ultimately not allow the Union industry to develop which would lead to losses in market share and possible closure of factories.

• (242) At the same time, measures would not prevent imports from third countries (including India) from competing fairly on the Union market. The investigation did not reveal that measures would have a disproportionate negative effect on importers and downstream industries.

• (243) Overall, therefore, the Commission concluded that there were no compelling reasons that it was not in the Union interest to impose measures on imports of OFC originating in India at this stage of the investigation.

8. PROVISIONAL ANTI-DUMPING MEASURES

• (244) On the basis of the conclusions reached by the Commission on dumping, injury, causation, the level of measures, and Union interest, provisional measures should be imposed to prevent further injury being caused to the Union industry by the dumped imports.

• (245) Provisional anti-dumping measures should be imposed on imports of OFC originating in India, in accordance with the lesser duty rule in Article 7(2) of the basic Regulation. The Commission compared the injury margins and the dumping margins. The amount of the duties was set at the level of the lower of the dumping and the injury margins.

• (246) On the basis of the above, the provisional anti-dumping duty rates, expressed on the CIF Union border price, customs duty unpaid, should be as follows:

Company	Provisional anti-dumping duty
Birla Cable Ltd; Universal Cables Ltd; Vindhya Telelinks Ltd	6,9 %
Sterlite Technologies Limited; Sterlite Tech Cables Solutions Limited	11,4  %
Other cooperating companies	9,0  %
All other companies	11,4  %

• (247) The individual company anti-dumping duty rates specified in this Regulation were established on the basis of the findings of this investigation. Therefore, they reflect the situation found during this investigation with respect to these companies. These duty rates are exclusively applicable to imports of the product concerned originating in the country concerned and produced by the named legal entities. Imports of the product concerned produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, should be subject to the duty rate applicable to ‘all other companies’. They should not be subject to any of the individual anti-dumping duty rates.

• (248) To minimise the risks of circumvention due to the difference in duty rates, special measures are needed to ensure the application of the individual anti-dumping duties. The companies with individual anti-dumping duties must present a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(3) of this Regulation. Imports not accompanied by that invoice should be subject to the anti-dumping duty applicable to ‘all other companies’.

• (249) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of anti-dumping duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(3) of this Regulation, the customs authorities of Member States must carry out their usual checks and may, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the particulars contained in the declaration and ensure that the subsequent application of the lower rate of duty is justified, in compliance with customs law.

• (250) Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in volume after the imposition of the measures concerned, such an increase in volume could be considered as constituting in itself a change in the pattern of trade due to the imposition of measures within the meaning of Article 13(1) of the basic Regulation. In such circumstances and provided the conditions are met an anti-circumvention investigation may be initiated. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a country-wide duty.

• (251) Statistics of OFC are frequently expressed in cable-km. However, there is no such supplementary unit for OFC specified in the Combined Nomenclature laid down in Annex I to Council Regulation (EEC) No 2658/87 ³³. It is therefore necessary to provide that not only the weight in kg or tonnes but also the number of cable-km for the imports of the product concerned must be entered in the declaration for release for free circulation. The cable-km should be indicated for CN and TARIC codes.

9. INFORMATION AT PROVISIONAL STAGE

• (252) In accordance with Article 19a of the basic Regulation, the Commission informed interested parties about the planned imposition of provisional duties. This information was also made available to the general public via DG TRADE's website. Interested parties were given three working days to provide comments on the accuracy of the calculations specifically disclosed to them.

• (253) MP Birla Group commented on the accuracy of the calculation of its dumping margin. After analysis, the Commission corrected the calculation and the relevant dumping margin.

• (254) All other comments received following the pre-disclosure will be addressed at the definitive stage.

10. FINAL PROVISIONS

• (255) In the interests of sound administration, the Commission will invite the interested parties to submit written comments and/or to request a hearing with the Commission within a fixed deadline.

• (256) The findings concerning the imposition of provisional duties are provisional and may be amended at the definitive stage of the investigation,

HAS ADOPTED THIS REGULATION:

Article 1

The following products are excluded:

• — cables below 500 meters in length in which all the optical fibres are individually fitted with operational connectors at one or both extremities; and

• — cables for submarine use, plastic insulated, containing a copper or aluminium conductor, in which fibres are contained in metal module(s).

Company	Provisional anti-dumping duty	TARIC additional code
Birla Cable Ltd; Universal Cables Ltd; Vindhya Telelinks Ltd	6,9 %	89CF
Sterlite Technologies Limited; Sterlite Tech Cables Solutions Limited	11,4  %	89CG
Other cooperating companies listed in Annex	9,0 %
All other imports originating in India	11,4 %	C999

Member States shall, on a monthly basis, inform the Commission of the number of cable-km imported under TARIC codes 8544700010 and 8544700091.

Article 2

Article 3

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

Article 1 shall apply for a period of six months.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 11 July 2024.

For the Commission

The President

Ursula VON DER LEYEN