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LexTalk World Talk Show with A K Gupta, Founder and Managing Director of TPM



A. K. Gupta, Founder and Managing Director of TPM, is a well-known expert in the area of trade remedial measures in the country. Mr. Gupta has done Masters in Management Studies (MMS) from BITS, Pilani and is a member of Institute of Cost Accountants of India. He is also a member of All India Management Association. He served Government of India for more than seven years, during which he majorly served as Assistant Director in Anti-Dumping Division (the present Directorate General of Trade Remedies). In 1999, he resigned from the Government services to set up is own practice in the field of trade remedies. Over the period, Mr. Gupta has built his name as an eminent practitioner in the field. With the highest number of cases to his name, he is unarguably an icon in the field of trade remedies. Under his leadership, TPM has been associated in about 85-90% of anti-dumping, countervailing and safeguards investigations in the country, in which it has mostly represented the domestic industries seeking imposition of anti-dumping duty. With his unparalleled passion and commitment to his work, he has built lasting relationships with his clients. Mr. Gupta is an honorary lecturer in post qualification course of Institute of Chartered Accountant of India (International Trade Laws and World Trade Organization) and has addressed a number of seminars on the subject. TPM was founded in 1999 at a time when the practice of trade remedies in India was in its infancy. While most of the firms added practice of trade remedies in their existing portfolios, TPM dealt exclusively in the domain of trade remedies. TPM began its journey with a staff of merely 2 professionals. Today, TPM constitutes a team of more than 40 professionals including Cost Accountants, Chartered Accountants, Company Secretaries, Lawyers, Engineers and MBAs. From the beginning, TPM was focused on providing consultancy in the field of trade remedies. TPM helps domestic producers, suffering due to cheap and unfair imports into India, to avail the necessary remedy under the umbrella of WTO Agreements. TPM has also assisted the domestic producers in other countries to avail similar measures in their respective countries. Besides assisting domestic producers in India and other countries, TPM also assists exporters and importers facing trade remedial investigations in India or other countries. TPM has assisted Indian exporters facing investigations in a number of jurisdictions such as Argentina, Brazil, Canada, China, Egypt, European Union, GCC, Indonesia, Korea RP, Taiwan, Turkey and USA. TPM has an enviable experience of dealing in the field, of more than 700 cases. Its unique experience in the field sets it apart from other firms. While the firm is primarily dedicated to trade remedies, it also provides services in the field of trade policy, non-tariff barriers, trade compliance, indirect taxation, trade monitoring and analysis. It also represents industries before the Government in matters involving Customs and foreign trade policy, as well as FTAs.


Interview:


Host: Tell us about a complex legal issue you worked on. Describe the complexity and tell us how you approached it.


A.K Gupta: TPM is about 23 years old organisation and therefore has been instrumentalin redressal of several complex legal issues in this journey. I will talk about only two.


First – whether an industry is entitled to “dual protection”


Indian industry is entitled to trade remedy protection under different laws. These include anti-dumping duties, anti-subsidy or countervailing duties, safeguard duties, bilateral safeguards under trade agreements, transactional safeguards on imports from China as was permitted under the accession treaty of China to WTO. A major legal issue that arose in India is whether Indian industry can seek simultaneous imposition of these remedies under these laws. TPM established that the Indian industry is entitled to seek remedies simultaneously under these different laws. Today industry can take recourse to anti-dumping, anti-subsidy and safeguard measures in any sequence - first anti-dumping and then anti-subsidy; or first anti-subsidy & then anti-dumping; or first safeguard & then anti-dumping; or first anti-dumping and then safeguards.


TPM analysed the Indian legal provisions and global jurisprudence on the subject. TPM established that the industry is entitled to simultaneous protection under these laws. After the investigating authority accepted the legal position and granted dual remedy, the same was challenged before appellate authorities – First before the appellate tribunal and thereafter before the Supreme Court. TPM was able to establish legality of simultaneous imposition of measures under these laws not only before the investigating authorities but also thereafter before judicial authorities. Today the law is well established in India and industry can seek relief under these laws at the same time.


Complexity of the issue is not only the aspect of dual remedies, but also the fact that India applies lesser duty rule, where the duty is lower of dumping and injury; or lower of subsidy and injury. Complexities further arose because of the fact that it may be difficult to segregate the injury that is caused by dumping and the injury that is caused by subsidies. In the context of safeguards, the question was to segregate the injury suffered on account of surge in import on one hand and dumping or subsidies on the other hand.


Second is how to address the difficulties faced by small and fragmented industry


One of the issues which concerns Indian industry in filing applications is getting relevant information from various domestic producers. In products involving a very high number of producers, including fragmentedindustry, it is almost impossible to get data from all domestic producers, or even those whose collective output constitutes a major proportion in gross domestic production. For instance, the tiles industry in India comprises of more than 450 domestic producers. Meeting the minimum threshold of 25% also implies data from more than 50 domestic producers. India follows lesser duty rule, which implies that the domestic producers wishing to file petition must provide their four years cost and financial data. Further information may have to be provided in respect of cost of production of different product types. It is almost impossible to seek protection against unfair dumping or subsidies in such cases. In case of fragmented industry, it would still be far bigger challenge. Often, the size of individual producers is quite small and these are owner driven operations, with little professional expertise on accounting, management, technical, marketing, or R&D. Most producers in such fragmented industries do not maintain records in such a manner as is required for trade remedies This resulted in the process of even filing an application for initiation of a trade remedial investigation significantly time consuming for such smaller producers.


TPM made detailed representations to the concerned authorities in India, highlighting the issue. We emphasized on the need for simplifying procedures and reducing the burden of information, in order to allow such domestic producers to avail remedy under the Indian Rules and WTO agreements. Solution proposed by us included allowing applications with limited information, resorting to sampling techniques and thereafter calling complete information from sampled domestic producers.


Our efforts reaped success, when in July 2021, the Govt. issued a Trade Notice laying down a simplified procedure for filing applications by fragmented industries. The procedure now provides for the following

  1. An application for initiation of investigation may be filed by producers constituting 25% of the total domestic production. However, such producers would not be required to furnish complete financial information as are ordinarily required at the stage of application.

  2. Only summary information is sought from such participating domestic producers at the stage of application.

  3. Thereafter, the Authority selects a sample of producers, who is then required to furnish complete relevant information.

Thismodified procedure laid down by the Govt. has already been followed by the Govt. more than once.

  1. The pandemic saw some courts begin moving towards more remote proceedings and availability. Is this sustainable, and a possible way to increase access to justice, in your opinion?

The movement towards remote proceedings and increasing use of digital platform is positive step. It has allowed easy and wider participation for everyone, especially across borders. In the past, all parties had to physically appear and attend proceeding or hearing.The participation from foreign producers and foreign Govt. was quite limited. The entire system has changed to virtual hearings. This has made it easier not only for the Indian industry but also for the exporters to participate. While the distance covered by the interested parties previously could range from a few 100 kms to a few 1000 kms or even more, it has been reduced to just a click on laptops. This has resulted in much wider participation. It is far more effective. It is highly time saving.


Not just India,even other jurisdictions have also moved towards use of digital environment. This has tremendously benefitted the Indian producers facing trade remedy investigations globally.


Prior to the pandemic,a number ofjurisdictions required physical filing of documents. However, post pandemic,a positive change has been seen.A number ofjurisdictions have moved towards online or e-filing. This has not only allowed more time to the stakeholders, and saved significant costs, but also was a welcome step considering its impact on environment. For example, in TPM itself, whereas we would have been consuming more than 100,000 pages a year, we are now consuming hardly 1000 pages a year.


Another welcome change has been with regard toentities who can represent.Earlier, most often, Indian producers had to engage legal representatives in the country undertaking investigation – both for filing and for attending hearings.However, now, with e-filing and virtual hearingssystems, there is no compulsion on the Indian Industry to engage foreign law firm. This has led to significant cost & time saving, and has resulted in more effectively participation.


Host: How would you rate the current legal system's drive towards encouraging access to justice? Is there tangible movement in closing the justice gap?


A.k. Gupta: The current legal system has taken significant steps to encourage access to justice. We have seen in the area where we work. Recently, the Directorate General of Trade Remediesintroduced simplified procures for participation by various stakeholders.Relaxations have been offered to fragmented industries.


However, even with these steps, the requirement for seeking remedies continues to be cumbersome and quite limited. In some cases, the domestic producers do not have the resources to generate the data and documents required by the investigating authority. There is significant scrutiny of the data, much more than any other jurisdictions. As a result, it becomes a costly and time consuming process for any producer to seek recourse to these measures. Despite the DGTR setting up a help desk for this purpose, the present requirements are so significant and complex that a domestic producer cannot think of succeeding without the help of legal consultants. Therefore, while there has been some progress in simplification of processes, a lot is still required to be done to ensure easy access of the legal recourses to industry at large, and without the help of legal experts.


Host: In the era of legal technology, what are the most commonly used tools for you?


A.K. Gupta: The most important technological tool for any legal professional today is access to information being generated by the global community. We are fortunate to be in contact with international chain of lawyers wherein knowledge and discourse is disseminated frequently and research is made accessible through advancements in technology. Increased communication, accessibility to information and ability to present views and submissions throughout the world are most important technological tools for the legal community.


Host: Time is money in any profession and in legal it's most of all. How do you ensure to make the best of your time as a lawyer?


A.K. Gupta: The key for ensuring best use of time is prioritizing and appropriate deployment of resources. We have a team of more than 40 professionals at our office. In India, we have the largest team dedicated to trade remedies. This allows us to handle each assignment effectively, by ensuring that sufficient resources are allocated to it.


We spend significant amount of time in development of human resources through orientation sessions and hand holdings. This investment in developing resources ensures that the team is equipped to handle assignments more and more independently, while delivering quality in the work handled.


However, we believe that no assignment should suffer only because of deployment of time. We do not allocate time on an assignment considering the remuneration. We allocate time considering the need of the assignment.


Host: What do you feel is unique in terms of what your firm brings to the table?


A.K. Gupta: Some of the factors that sets TPM apart and has helped us attain and maintain our number-1 position over last 22 years since our inception is our ability to handhold the industry, get right quantity & quality of information, supplement it with our own research, use right kind of data base, and focus on building merits of the case. We invest ourselves fully in each project, and fight for the desired results. We approach assignments with honesty,hard work, dedication, passion, and zeal to success. We have a “client-first” approach, due to which we have been able to establish long-term relationships with our clients, several of them spanning over 2 decades, and have been able to emerge as the leading firm representing the Indian industry.Today, we have the handled more than 1000 investigations in India and globally, which is perhaps the highest number for any individual globally.


Host: Why is it perceived that India is the most aggressive user of trade remedial measures globally?


A.k. Gupta: Historically, India is being presented as one of the countries invoking the highest number of trade remedial measures, and is seen as the most aggressive user. This was in part owing to developing nature of our economy, huge market opportunity available to foreign producers, significant surplus capacities in major exporting countries such as China, Korea, and Gulf, and above all, India beinga highly price sensitive market.


However, it is unfair to consider India as an aggressive user of trade remediesmerely based on the number of investigations. A deeper analysis would show to the contrary. India follows perhaps an approach most liberal to foreign producers. India follows lesser duty law, which has by law and practice become “least duty law”.

  1. Even when WTO Agreement allows WTO members to impose anti-dumping duty or countervailing duty to the full extent of dumping margin or subsidy margin, India follows lesser duty rule.Most of the WTO members impose duties to the full extent of dumping margin or subsidy margin.

  2. WTO members such as USA impose punitive duties in the face of non-cooperation by foreign producers, which can be as high as 300% or 500%. The quantum of duties imposed in India are much lower.

  3. While WTO members apply what we call “adverse facts”, India applies, what we call “best information available”. Adverse fact is a fact that is most adverse to the foreign producers. Best information available is the information which is most favourable to foreign producers.

  4. The focus of trade remedial investigations globally is on foreign producers resorting to dumping. The focus in India is Indian Industry seeking protection.

  5. The quality and quantity of information and evidence that is provided by foreign producers is much much higher in countries such asBrazil, Canada, European Union, USA.

  6. As compared to other authorities, the Indian authorities are quite lenient in allowing time to the foreign producers and other parties participating in the investigation.

Therefore, a simple reference to the number of investigations or measures imposed is not an appropriate measure. An examination of policies, practices and procedures would reveal that India actually is much more liberal than its counterparts globally.


Host: What are the major challenges being faced by the Indian industry in respect of trade remedial law at present, and what are the possible solutions?


A.K. Gupta: The biggest challenge faced by the Indian industry today is non imposition of measures despite positive recommendations by the investigating authority. The entire process from compilation of information to filing of application to the investigations and ultimately recommendations of the investigating authority takes about 12 to 24 months. Thereafter, the Ministry of Finance has a period of 3 months to consider such recommendations. Such being the case, if the Ministry of Finance rejectsthe recommendation, it results in wastage of significant time, money and resources spent by the Indian industry.


Another challenge that the Indian industry faces is the application of lesser duty rule – both the law as such and as applied. Even if lesser duty rule may be considered a desirable proposition, the manner in which it is applied is significantly detrimental to the bonafide interests of the Indian Industry. Interestingly, the Indian law and practice are not compatible even with its own proposal at the WTO in this regard. It is essential that the law is modified in respect of the manner of quantification of duties.

 

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