CIT OKs de Facto Specificity Finding on Indian Coal Subsidy
The Commerce Department adequately supported its de facto specificity finding regarding Indian state-run coal supplier Coal India's provision of coal to respondent Hindalco Inndustries for less than adequate remuneration, the Court of International Trade held in a July 22 decision. In the ruling, Judge Joseph Laroski also upheld Commerce's decision to use U.N. Comtrade data as a benchmark for calculating the size of the coal subsidy in the 2020-21 administrative review of the countervailing duty order on common alloy aluminum sheet from India.
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The result is a 37.9% CVD rate for Hindalco for its 2020 entries and a 32.43% rate for its 2021 entries.
In the review, Commerce based its de facto specifity analysis on Coal India's industry classifications, which noted that the "power (utility)" industry received 75.47% of the subsidized coal, the "power (captive)" industry received 7.44%, other basic metals received 0.10% and "other" received 13.75%. The agency said that the "power (utility)" and "power (captive)" industries are the "predominant users of coal," spending the rest of its specificity analysis on "supporting and clarifying" its position that it's reasonable to analyze these two industry classifications collectively.
Commerce then looked at how Hindalco's business fits under Coal India's scheme, finding that the respondent's "aluminum manufacturing units comprise the full value chain," including coal mining and captive power generation. The agency also noted that one of Hindalco's affiliates, Utkal, operates "captive power producing units," ultimately finding that Hindalco and Utkal are "power generators" and that Coal India "rightly viewed these businesses as part of the 'power (captive)' industry."
Laroski held that this approach is both supported by the statute, 19 U.S.C. Section 1677, and backed by substantial evidence. The judge said Commerce gave "ample consideration" to arguments made by Hindalco and the Indian government, which stressed that Commerce should have turned to the Indian government's broader "National Industrial Classification" system instead of the Coal India scheme.
By using the Coal India scheme, "Commerce consulted the approach it had taken in prior determinations relating to the same statutory framework and responded to Hindalco’s proposed approach based on those examples," the judge said. The agency "defined industries consistent with the classification scheme of the relevant government authority." Commerce also specifically referred to Section 1577's "admonition that reference to an enterprise or industry within the specificity context 'includes a group of such enterprises or industries,'" the judge said.
The court added that the "principal bases" for the specificity finding are "intuitive." Commerce said the "power (captive)" industry "bears a meaningful similarity to the 'power (utility)' industry based on these industries' use of coal to generate power." Contrary to Hindalco's framing of the "power" labels used by Coal India and the "supermajority share of [Coal India] coal usage they represent, Commerce’s burden when grouping industries in specificity analyses is not so heavy nor so nuanced," the court said.
The grouping Commerce chose here is not prevented by Section 177, the trade remedies statute "more broadly," court precedent, past Commerce determinations or the Statement of Administrative Action Accompanying the Uruguay Round Agreements Act, the court said.
Laroski then said the agency's grouping of the "power" industries is supported on a factual basis as well. The judge said it's not immaterial or "some non-substantive shorthand" that Coal India referred to the two industries as "power." Rather, it's a "strong implication that within India’s coal industry companies that use coal for industrial-scale power generation are similar or even equivalent." It's also noteworthy that the "power" designations "refer to the companies accounting for more than 80 percent of the coal it supplies, with the remaining individual classifications each accounting for modest individual shares," the judge said.
In addressing comments from Hindalco and the Indian government, Commerce didn't just recite the applicable law and Coal India data but it also meaningfully grappled with its past determinations, the court noted.
The court also upheld Commerce's selection of U.N. Comtrade data as the benchmark for the coal subsidy calculation over data from the International Coal Market Watch and McCloskey, which were favored by the respondent and the Indian government. The agency "reasonably determined that the ICMW and McCloskey data were not sufficiently reliable to serve as the basis for world market prices," since the datasets suffer from "limited country coverage and a lack of underlying price and quantity data, which risks distorted results," Laroski held.
Commerce's finding that the U.N. Comtrade data was an accurate coal price benchmark was supported by substantial evidence, the judge said. "The dataset allowed Commerce to calculate weighted monthly averages based on underlying price and quantity information from a broad array of exporting countries, which aligns with its regulatory obligation to assess prices reasonably available to purchasers in the subject country."
Laroski concluded that the court's "role is not to decide whether a more accurate or precise benchmark could have been constructed, but whether Commerce’s choice is grounded in a reasoned analysis and supported by record evidence."
(Hindalco Industries v. United States, Slip Op. 25-95, CIT # 23-00260, dated 07/22/25; Judge: Joseph Laroski; Attorneys: Rajib Pal of Sidley Austin for plaintiff Hindalco Industries; Kyle Beckrich for defendant U.S. government; Brooke Ringel of Kelley Drye for defendant-intervenors Aluminum Association Common Alloy Aluminum Sheet Trade Enforcement Working Group and its individual members)