Commission Implementing Regulation (EU) 2025/1748 of 18 August 2025 imposing a definitive countervailing duty on imports of certain polyethylene terephthalate (PET) originating in India following an expiry review pursuant to Article 18 of Regulation (EU) 2016/1037 of the European Parliament and of the Council

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (1) (‘the basic Regulation’), and in particular Article 18 thereof,

Whereas:

(1) By Regulation (EC) No 2603/2000 (2), the Council imposed definitive countervailing duties on imports of polyethylene terephthalate (‘PET’) originating, inter alia, in India (‘original investigation’).

(2) By Regulation (EC) No 1645/2005 (3), the Council amended the level of countervailing measures in force against imports of PET from India. The amendments were a result of an accelerated review initiated pursuant to Article 20 of the basic Regulation.

(3) Following an expiry review, the Council by Regulation (EC) No 193/2007 (4) imposed definitive countervailing duties for a further period of five years.

(4) The countervailing measures were subsequently amended by Council Regulation (EC) No 1286/2008 (5) and Council Implementing Regulation (EU) No 906/2011 (6), following partial interim reviews.

(5) A later partial interim review was terminated without amending the measures in force by Council Implementing Regulation (EU) No 559/2012 (7).

(6) Following another expiry review, the Council by Implementing Regulation (EU) No 461/2013 (8) imposed definitive countervailing duties for a further period of five years.

(7) By Decision 2000/745/EC (9), the Commission accepted a minimum import price offered by three exporting producers in India. By Implementing Decision 2014/109/EU (10), the Commission withdrew the acceptance of the undertakings, due to a change in the circumstances under which the undertakings were accepted.

(8) By Implementing Regulation (EU) 2015/1350 (11), the Council amended the level of countervailing measures in force against imports of PET from India, following two partial interim reviews.

(9) By Implementing Regulation (EU) 2018/1468 (12), the Commission amended the level of countervailing measures in force following two partial interim reviews.

(10) Following the third expiry review, the Commission by Implementing Regulation (EU) No 2019/1286 (13) imposed definitive countervailing duties for a further period of five years (‘last expiry review’).

(11) On 2 June 2020, Implementing Regulation (EU) 2019/1286 was amended by Commission Implementing Regulation (EU) 2020/738 (14), changing the countervailing duties from specific to ad valorem. The current applicable countervailing duties range from 2,3 % to 13,8 % for sampled or cooperating exporting producers, and amount to 13,8 % for all other exporting producers.

(12) Following the publication of a notice of impending expiry (15) of the countervailing measures in force on the imports of PET originating in India (‘the country concerned’), the Commission received a request for review pursuant to Article 18 of the basic Regulation (‘the review request’).

(13) The review request was lodged on 26 April 2024 by PET Europe (‘the applicant’) on behalf of the Union industry of polyethylene terephthalate (‘PET’) in the sense of Article 10(6) of the basic Regulation.

(14) The review request is based on the grounds that the expiry of the measures would be likely to result in continuation and recurrence of subsidisation, and recurrence of injury to the Union industry.

(15) Prior to the initiation of the expiry review, and in accordance with Articles 22(1) and 10(7) of the basic Regulation, the Commission notified the Government of India (‘GOI’) that it had received a properly documented review request and invited the GOI for consultations with the aim of clarifying the situation as regards the contents of the review request and arriving at a mutually agreed solution.

(16) Consultations with the GOI were held on 22 July 2024 and GOI expressed its views regarding the initiation of the investigation to the Commission. GOI also submitted its views in writing on 25 July 2024. The expiry review investigation was initiated on 26 July 2024.

(17) Having determined, after consulting the Committee established by Article 25(1) of the basic Regulation, that sufficient evidence existed for the initiation of an expiry review, the Commission announced on 26 July 2024, by a notice published in the Official Journal of the European Union (16) (‘the Notice of Initiation’) the initiation of an expiry review pursuant to Article 18 of the basic Regulation. In view of Article 18(2) of the basic Regulation, the Commission prepared a memorandum on sufficiency of evidence containing the Commission’s assessment on all the evidence at its disposal and on the basis of which the Commission initiated this investigation.

(18) Following the definitive disclosure, the GOI submitted that the review request was merely on presumptions and assertions which are not supported by any documentary evidence and the applicant was not able to prove there is likelihood of injury. Therefore, according to the GOI, the Commission should not have initiated the investigation based on an insufficient review request.

(19) The legal standard of evidence required for a review request under Article 18(2) of the basic Regulation makes it clear that the applicant does not need to show that the expiry of measures will positively result in continuation or recurrence of injury. Furthermore, the quantity and quality of information in the review request by definition cannot be the same as the one on which the Commission bases its findings at the end of an investigation. In any event, in the present case, the Commission’s analysis of the evidence provided by the applicant has yielded the result that the review request contained sufficient evidence demonstrating that the expiry of the measures would be likely to result in the continuation of further subsidisation and recurrence of injury. Therefore, the GOI’s claim is dismissed.

(20) The investigation of continuation or recurrence of subsidisation covered the period 1 July 2023 to 30 June 2024 (‘the review investigation period’). The examination of trends relevant for the assessment of the likelihood of a recurrence of injury will cover the period from 1 January 2020 to the end of the review investigation period (‘the period considered’).

(21) In the Notice of Initiation, the Commission invited all interested parties to participate in the investigation. In addition, the Commission specifically informed the applicant, other known Union producers, exporting producers, importers and users in the Union known to be concerned and the authorities in India of the initiation of the expiry review and invited them to participate.

(22) All interested parties were invited to make their views known, submit information and provide supporting evidence within the time-limits set out in the Notice of Initiation. Interested parties were also granted the opportunity to request in writing a hearing by the Commission investigation services and/or the Hearing Officer in trade proceedings.

(23) In the Notice of Initiation, the Commission stated that it might sample interested parties, in accordance with Article 27 of the basic Regulation.

(24) In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. In accordance with Article 27 of the basic Regulation the Commission selected the sample on the basis of the largest representative volume of sales and production in the Union which could reasonably be investigated within the time available. This sample consisted of two Union producers. The sampled Union producers accounted for over 30 % of the estimated total production in the Union in the review investigation period. The Commission invited interested parties to comment on the provisional sample, but did not receive any comments. The provisional sample was therefore confirmed and is considered representative of the Union industry.

(25) Further to the definitive disclosure, the GOI expressed concerns that the Commission’s reliance on an extremely small sample may result in non-representative findings. The GOI noted that only two Union producers, covering over 30 % of the production, were sampled, which means that 70 % of the industry was not verified, questioning the completeness and fairness of the Commission’s injury analysis.

(26) First, in accordance with Article 27(1) of the basic Regulation, the Commission has a discretion to limit the sample of Union producers to cover the largest representative volume of Union sales and production which can reasonably be investigated within the time available. Second, the Commission relied on the data of the sampled Union producers only in the analysis of micro-economic indicators, while the macro-economic indicators outlined in this Regulation cover the situation of the entire Union industry and not solely data from the sampled Union producers, hence further invalidating the GOI’s claim on the lack of completeness and fairness in the Commission analysis.

(27) In order to enable the Commission to decide whether sampling was necessary and, if so, to select a sample, all unrelated importers/users were invited to participate in this investigation. Those parties were requested to make themselves known by providing the Commission with the information on their companies requested in Annex II of the Notice of Initiation. No user or importer came forward in the sampling exercise.

(28) In order to enable the Commission to decide whether sampling was necessary and, if so, to select a sample, all exporting producers were invited to participate in this investigation. Those parties were requested to make themselves known by providing the Commission with the information on their companies requested in point 5.3.1 of the Notice of Initiation. In addition, the Commission asked the Mission of India to the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation. None of the exporting producers provided the requested information.

(29) In order to obtain the information deemed necessary for its investigation, the Commission published online the questionnaires for the exporting producers, the unrelated importers and the Union producers and sent questionnaire to the GOI.

(30) One exporting producer, which did not export to the Union during the review investigation period, provided a questionnaire reply. The GOI also provided a questionnaire reply.

(31) The Commission sought and verified all the information it deemed necessary for the determination of the likelihood of continuation or recurrence of subsidisation and injury and for the determination of the Union interest. A verification visit took place also at the premises of the GOI in New Delhi.

(33) The product subject to this review is the same as in the original investigation, namely polyethylene terephthalate (PET) having a viscosity number of 78 ml/g or higher, currently falling under CN code 3907 61 00 and originating in India (‘the product under review’).

(34) It was considered that the product under review produced in India and exported to the Union and the product produced and sold in the Union by the Union industry have the same basic physical and chemical characteristics, and the same basic uses. They were therefore considered to be like products within the meaning of Article 2(c) of the basic Regulation.

(36) Pursuant to Article 18 of the basic Regulation, the Commission should examine whether there is evidence of continued subsidisation, regardless of its amount. In view of the findings of existence of continued subsidisation with respect to most of the main subsidies countervailed in the original investigation, there was no need to investigate all the other subsidies alleged to exist by the complainant.

(37) The subsidies specified in the recital (35) above, and which were countervailed in the past, are based on the following policy documents and legislation.

(38) The AAS and EPCGS schemes are based on the Foreign Trade (Development and Regulation) Act 1992 (No 22 of 1992) which entered into force on 7 August 1992 (‘Foreign Trade Act’). The Foreign Trade Act authorises the GOI to issue notifications regarding the export and import policy. These are summarised in ‘Foreign Trade Policy’ documents, which are issued by the Ministry of Commerce every five years and updated regularly (20).

(39) The Foreign Trade Policy document relevant for the review investigation period is the Foreign Trade Policy FTP 2023. It entered into force on 1 April 2023. The GOI also sets out the procedures governing FTP in a Handbook of Procedures (21) (‘HOP’) 2023. The latter entered into force on 1 April 2023.

(40) AAS and EPCGS are based on the FTP 2023 as well as HOP 2023.

(41) The DDS scheme is based on section 75 of the Customs Act of 1962, on Section 37 of the Central Excise Act of 1944, on Sections 93A and 94 of the Financial Act of 1994, and on the Customs, Central Excise Duties and Service Tax Drawback Rules of 1995. The drawback rates are published on a regular basis.

(42) The GEDES scheme is based on Gujarat Electricity Duty Act, 1958 (‘Electricity Act’) under Section 3(2)(vii) and (viii) as amended from time to time in Gujarat Government Gazette.

(43) One cooperating exporting producer confirmed obtaining concessions under AAS and DDS schemes during the review investigation period. However, as it did not export to the Union during this review investigation period, the benefits were not quantified.

(44) The cooperating exporting producer confirmed obtaining concessions under AAS during the review investigation period (RIP).

(45) This scheme has been countervailed in a number of countervailing duty proceedings concerning India, including in recitals (28) to (55) of the graphite electrode systems regulation (22), in recitals (126) to (153) of the stainless steel cold-rolled flat products regulation (23), in recitals (39) to (61) of the last expiry review regulation (24) and in recitals (40) to (60) of the stainless steel bars and rods regulation (25).

(46) The detailed description of the scheme is contained in Chapters 4.03 to 4.23 of the FTP 2023 and Chapters 4.04 to 4.51 of the HOP 2023.

(47) Pursuant to paragraph 4.05 of the FTP 2023, advanced authorisation licences can be issued either to manufacturer-exporters or to merchant exporters tied to supporting manufacturers.

(48) Advanced authorisation licences can be issued for physical exports, for intermediate supplies, for the supply of certain goods and for deemed exports.

(49) Applicants need to apply for a licence which would allow importing duty-free inputs and where the volume of these imports should not exceed the volume of inputs for manufacturing exported products.

(50) The AAS can be issued for:

(51) Physical exports: This is the main sub-scheme. It allows for duty-free import of input materials for the production of a specific resulting export product. ‘Physical’ in this context means that the export product has to leave the Indian territory. An import allowance and an export obligation including the type of export product are specified in the licence;

(52) Annual requirement: Such an authorisation is not linked to a specific export product, but to a wider product group (e.g. chemical and allied products). The licence holder can – up to a certain value threshold set by its past export performance – import duty-free any input to be used in manufacturing any of the items falling under such a product group. It can choose to export any resulting product falling under the product group using such duty-exempt material;

(53) Intermediate supplies: This sub-scheme covers cases where two manufacturers intend to produce a single export product and divide the production process. The manufacturer-exporter who produces the intermediate product can import duty-free input materials and can obtain for this purpose an AAS for intermediate supplies. The ultimate exporter finalises the production and is obliged to export the finished product;

(54) Deemed exports: This sub-scheme allows a main contractor to import inputs free of duty which are required in manufacturing goods to be sold as ‘deemed exports’. According to the GOI, deemed exports refer to those transactions in which the goods supplied do not leave the country. A number of categories of supply is regarded as deemed exports provided the goods are manufactured in India, e.g. supply of goods to an EOU or to a company situated in a special economic zone (‘SEZ’);

(55) Advance Release Order (‘ARO’): The AAS holder intending to source the inputs from indigenous sources, in lieu of direct import, has the option to source them against AROs. In such cases the Advance Authorisations are validated as AROs and are endorsed to the indigenous supplier upon delivery of the items specified therein. The endorsement of the ARO entitles the indigenous supplier to the benefits of deemed exports as set out in paragraph 7.03 of the FTP 2023 (i.e. AAS for intermediate supplies/deemed export, deemed export drawback and refund of terminal excise duty). The ARO mechanism refunds taxes and duties to the supplier instead of refunding the same to the ultimate exporter in the form of drawback/refund of duties. The refund of taxes/duties is available both for indigenous inputs as well as imported inputs;

(56) Back to back inland letter of credit: This sub-scheme again covers indigenous supplies to an Advance Authorisation holder. The holder of an Advance Authorisation can approach a bank for opening an inland letter of credit in favour of an indigenous supplier. The authorisation will be validated by the bank for direct import only in respect of the value and volume of items being sourced indigenously instead of importation. The indigenous supplier will be entitled to deemed export benefits as set out in paragraph 7.03 of the FTP 2023 (i.e. AAS for intermediate supplies/deemed export, deemed export drawback and refund of terminal excise duty).

(57) For verification purposes by the Indian authorities, an Advance Authorisation holder is legally obliged to maintain ‘a true and proper account of consumption and utilisation of duty-free imported/domestically procured goods’ in a specified format (Chapter 4.51 and Appendix 4H HOP 2023), i.e. an actual consumption register. This register has to be verified by an external chartered accountant/cost and works accountant who issues a certificate stating that the prescribed registers and relevant records have been examined and the information furnished under Appendix 4H is true and correct in all respects.