Fibreoptics face-off as EU duties challenge Indian exporters

With anti-dumping duties shaking up the USD 400M market, India's OFC manufacturers Face new challenges in Europe, impacting their global expansion plans

- VERNIKA AWAL

On 17 June, the European Commission announced anti-dumping duties on 10 Indian firms selling optical fibre cables (OFC) in Europe. While the simple explanation for the new duties is pricing investigations that take place regularly in the corporate world, a closer look reveals a potentially multi-crore rupee impact on India's OFC manufacturers, a key part of global communications infrastructure.

Why is this important for India? Data from market watcher OEC World pegged India to be the world's sixth-largest OFC and accessories exporter. Fellow market researcher Mordor Intelligence valued the global OFC market at around USD 12.8 billion as of this year. India accounts for nearly 12% of the global OFC economy, including export of over INR 3,400 crore, or USD 400 million.

Of this, the European Union accounts for a significant chunk. OEC data noted that last year, beyond the US, India's top importers of OFCS included Denmark, Germany, The Netherlands and the United Kingdom (the latter being outside the EU's purview). Even without the UK, the top EU importers accounted for one-fourth of India's OFC exports. Considering all of the continents, this figure should easily exceed at least one-third of India's optical fibre businesses abroad.

As a result, any imposition of restrictions and penalties could be a considerable ordeal for an industry that is still growing and has massive potential for growth, given India's emphasis on ramping up local manufacturing and domestic value addition.

WHAT IS ANTI-DUMPING DUTY?

Put simply, anti-dumping is a practice enforced by governments to ensure that the price of a commodity being exported by a company is not less in its country of export than its country of origin. The regulation is in place to ensure fair trade practices and prevent predatory pricing.