As per Directorate General of Trade Remedies’ (DGTR) recommendations, India has imposed Anti-Dumping Duties on five Chinese products, including certain aluminium goods and some chemicals, for five years.
- The DGTR has concluded that these products have been exported at a price below normal value in Indian markets, which has resulted in dumping, causing injury to domestic markets.
- India’s exports to China during the April-September 2021 period were worth USD 12.26 billion while imports aggregated at USD 42.33 billion, leaving a Trade Deficit of USD 30.07 billion.
- Dumping is said to occur when the goods are exported by a country to another country at a price lower than the price it normally charges in its own home market.
- This is an unfair trade practice which can have a distortive effect on international trade.
- Imposition of Anti-dumping duty is a measure to rectify the situation arising out of the dumping of goods and its trade distortive effect.
- In the long-term, anti-dumping duties can reduce the international competition of domestic companies producing similar goods.
- It is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.
- The use of anti-dumping measures as an instrument of fair competition is permitted by the World Trade Organisation.
- ADD is a customs duty on imports providing a protection against the dumping of goods at prices substantially lower than the normal value whereas Countervailing duty is a customs duty on goods that have received government subsidies in the originating or exporting country.
WTO’s Provisions Related to Anti-Dumping Duty:
- An anti-dumping duty is valid for a period of five years from the date of imposition unless revoked earlier.
- It can be extended for a further period of five years through a sunset or expiry review investigation.
- A Sunset review/ expiry review is an evaluation of the need for the continued existence of a program or an agency.
- It allows for an assessment of the effectiveness and performance of the program or agency.
- Such a review can be initiated suo moto or on the basis of a duly substantiated request received from or on behalf of the domestic industry.