- India has imposed an anti-dumping duty on a chemical used mainly in the adhesive industry.
- The duty is up to USD 557 per tonne.
- The chemical is imported from China, Korea, and Thailand.
- The duty will be effective for five years.
- The purpose of the duty is to protect domestic producers from low-priced imports that could negatively impact the local industry.
Dumping
- Dumping occurs when a country exports goods to another at prices lower than what it charges domestically.
- It is an unfair trade practice that can disrupt international trade.
Objective of ADD:
- Anti-dumping duty aims to address the trade distortions caused by dumped goods.
- It reduces competition for domestic producers facing lower-priced imports.
- It is a protectionist tariff imposed on imports priced below fair market value.
- World Trade Organization (WTO) allows anti-dumping measures to maintain fair competition.
Role of DGTR:
- The Directorate General of Trade Remedies (DGTR) under the Ministry of Commerce investigates anti-dumping cases.
- DGTR recommends anti-dumping duties if serious injury to the domestic industry is found.
Role of CBIC
- The Central Board of Indirect Taxes and Customs (CBIC) has three months to accept or reject DGTR’s recommendation.
- Imposing anti-dumping duties is a WTO-approved trade remedy under the General Agreement on Tariffs and Trade (1994).
WTO’s Provisions Related to Anti-Dumping Duty:
- Validity: The duty remains valid for five years from its imposition date, unless revoked earlier.
- Sunset Review: It can be extended by an additional five years through a sunset review.
- The review assesses the need for continuation based on effectiveness and performance.
- It can be initiated by authorities or upon a substantiated request from the domestic industry.
Countervailing duty v/s Anti-dumping duty:
- Anti-dumping duty is imposed to prevent low-priced foreign goods from damaging the local market. On the other hand, CVD will apply to foreign products that have enjoyed government subsidies, which eventually leads to very low prices.
- While the anti-dumping duty amount depends on the margin of dumping, the CVD amount will completely depend on the subsidy value of the foreign goods.
