Obstructive dumping

India has been increasingly focused on ensuring that its citizens, irrespective of their economic and social backgrounds and place of stay, may gain access to seamless, reliable broadband connectivity so that they can leverage the unifying force that the Internet represents towards improving the quality of life.

Given the vital role that bolstering technology infrastructure could play in making a difference, it is imperative that authorities closely monitor the huge surge in imports of optical fibre from China, since it raises the possibility of Chinese companies resorting to dumping to raise their share in the Indian market.

Optical fibres are bundled together to make optical fibre cables, which are used to transfer digital data signals in the form of light, up to distances of hundreds of miles, with higher throughput rates than those achievable via electrical communication cables.

According to a study titled ‘How to Make India World’s Capital in Optical Fibre Manufacturing’ — conducted by the Delhi-based think tank Centre for Digital Economy Policy Research (C-DEP) — there has been a substantial increase in the share of Chinese optical fibre in India recently. “It has grown from merely 2,203 Mn FKM in 2019-20 to a whopping 13,980 Mn FKM in 2022-23 (till January 2023), an over 5 times increase in a mere span of less than 3 years,” the C-DEP report said. FKM stands for fibre kilometre.

Following a detailed investigation, the designated organisation handling the anti-dumping issue in India – the Directorate General of Trade Remedies (DGTR) that comes under the Union Ministry of Commerce – has recently recommended imposition of anti-dumping duties on “dispersion unshifted single-mode optical fibre” (“SMOF”) originating in or exported from China and a few other countries. SMOF facilitates transmission of a single spatial mode of light as a carrier and is used for signal transmissions within certain bands. Single-mode fibre optic transmissions are faster than multimode over long distances and have virtually unlimited bandwidth capacity.

As of now, not much is available in the public domain on whether the Ministry of Finance has accepted the DGTR's recommendation on anti-dumping duties being imposed on SMOF originating in, or being exported from, China and certain other countries.

Even as we await the decision of the Ministry of Finance, it may be pointed out, though, that India adopting a tough posture by levying high anti-dumping duties where instances of dumping of optical fibre are proven could go a long way in ensuring that signature missions such as ‘Digital India’ and ‘Make in India’ do not get adversely impacted.

The risk of the dumped items being of dubious quality is always enhanced when companies, for gaining access to markets where they feel they could make windfall profits, try to take the price game to a level where the best way to make big money lies in compromising on the quality of the product.

Sight must not be lost of the fact that the Indian market being flooded with dumped optical fibre could have severe adverse effects on local manufacturers. Over the years, these home-grown players have created substantial capacity to effectively cater to the growing needs of the Indian and world markets. Expecting Indian companies to effectively compete with foreign companies that resort to dumping may be expecting a bit too much. It may be relevant to mention here that providing local companies with a level-playing field where all enterprises – domestic and foreign – operate under the same set of rules does not by any means amount to protectionism.

As one of the biggest favourites of the global business community now, India’s voice currently resonates stronger than ever. It would be in the fitness of things if India leverages this opportunity to make it plain to all stakeholders that while the country would not erect any walls for foreign companies wanting to do business here, these enterprises must pay a heavy price if they do not abide by the prescribed rules on dumping.

The writer is a current affairs commentator. Views expressed are personal