India's tough line on dumping

Robert Clark | December 22, 2009

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Until now Tejas Networks was known mostly for its backers – prominent VCs such as Sycamore and Intel Capital.

Now the Bangalore-based fiber and Ethernet vendor is the center of attention as the prime source of a trade dispute between India and China.

A complaint from Tejas about pricing of SDH gear by foreign rivals sparked the decision last week by Indian authorities to slap heavy anti-dumping duties on Chinese vendors.

India’s Directorate-General of Anti-Dumping & Allied Duties concluded in a preliminary finding in September that the goods were being sold at “less than their normal values” and at “substantial” dumping margin.

Last week it imposed duties of up to 236% on the sale in India of SDH gear by Fiberhome, Alcatel Shanghai Bell, ZTE and Huawei. It gave a 93% penalty to the Hangzhou subsidiary of Israeli-owned ECI.

These aren’t happy times for Chinese vendors in India. As the Chinese press has noted, the decision follows the exclusion of Chinese vendors from network contracts in sensitive border areas and the dumping of Huawei from a major GSM deal by state-owned BSNL.

The Southern Metropolitan Daily described the move as “trade protectionism”. It said China’s Ministry of Commerce had held close consultations with the affected vendors and was “working up integrated measures in response”.

Most likely the response will be political and diplomatic – primarily to lobby for relief from the measures. But with India’s 3G contracts due to go off next year, neither Chinese officials nor the vendors will want to rock the boat.

Source:

Robert Clark