Context: Out of the 46 anti-dumping duties levied by the finance ministry in the last three years 60 per cent targeted goods originating only in China.
What is Dumping?
- Dumping is an unfair trade practice that occurs when goods are exported from one country to another at a price lower than the normal value in their domestic market.
- Directorate General of Trade Remedies (DGTR) under Ministry of commerce and Industry investigates cases of anti-dumping brought forward by industry players and recommends an Anti-Dumping Duty in case of a consequential serious injury to domestic industry.
- Central Board of Indirect taxes and Customs (CBIC) under finance ministry must accept or refuse DGTR’s ADD recommendation within three months from the date of the final hearing. The imposition of anti-dumping duties is a legitimate trade remedial measure under the WTO’s General Agreement on Trade and Tariffs 1994.
| Anti-dumping duty is a tax imposed on imported goods that are believed to be sold at a price lower than their fair market value in the exporting country. This is done to protect domestic businesses in the importing country from what is considered unfair competition. | Countervailing Duties (CVDs) are tariffs levied on imported goods to offset subsidies made to producers of these goods in the exporting country. CVDs are meant to level the playing field between domestic producers of a product and foreign producers of the same product who can afford to sell it at a lower price because of the subsidy they receive from their government. |