Page 79 - MANUAL OF SOP

Manual of OP for Trade Remedy Investigations

(viii) In this case, even though total domestic production is 10000 MT, but it will only
be considered as 5000 MT on account of P2 and P4 being declared ineligible.
P1, P3, and P5 will constitute 100% of the total domestic production for
the purposes of Rule 2(b).

Status of SEZ

4.9.21. The units existing in Special Economic Zones (“SEZ”) are not to be treated
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as DI . This is on account of their special status granted in terms of Section 30 of
the SEZ Act, 2005.

4.9.22. The SEZs are regarded as international territory. Local raw materials bought
by producers within SEZs are regarded as exports whereas those goods that are
produced in SEZs and sold in the Domestic Tariff Area (“DTA”) are regarded as
imports. SEZ units are allowed to retain 100% of their foreign exchange earnings
in special Export Earners Foreign Currency Exchange accounts. They are free to sell
goods in the DTA but on payment of applicable duties. Sales from DTA firms to SEZ
units are on par with regular trade transactions and hence eligible to benefit from
all export incentive and foreign currency exemption schemes. SEZ units are also
exempt from the central government's service and excise tax regimes.

4.9.23. SEZ is a specifically delineated duty-free enclave and shall be deemed to be
foreign territory for the purposes of trade operations and duties and tariffs. SEZ
have no entitlement of domestic sales. In order words, SEZ is a geographical region
that has economic laws different from a country's typical economic laws. Thus, the
production of SEZ should not be included while estimating the total production of
the country. However, production of EOU to the extent of domestic sales may be
taken into account for estimating total domestic production because EOU is legally
different entities.As a matter of practice, 100% Export Oriented Units (“EOU”)
have been considered DI for their domestic sales subject to entitlement.

Localized Market: Regional Industry

4.9.24. The Article 4.1(ii) of ADA reads as under:
“4.1 For the purposes of this Agreement, the term "domestic industry" shall
be interpreted as referring to the domestic producers as a whole of the
like products or to those of them whose collective output of the products

12 Final Finding in Safeguard investigation on imports of Solar Cells whether or not assembled in modules or panels,
F. No. 22/1/2018 - DGTR dated July 16, 2018.

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