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Dumping

Reviewed by Anjaneyulu | Updated on Sep 30, 2020

Catalogue

Introduction

Dumping is an international trade term used when a country or company exports a product at a price on the import market that is lower than the price on the domestic market of the exporter. Dumping, typically, involves a product's significant export volumes. It often endangers the financial viability of the importing nation's manufacturers or producers of the product.

Actions Taken to Restrict

The Indian government has imposed anti-dumping duties on an exporter that causes any material or substantial injury to a domestic industry in India to ensure dumping activities do not affect the domestic market. India's anti-dumping legislation is the 1975 Customs Tariff Act, revised in 1995.

In India, anti-dumping laws were enacted primarily to protect India's iron and steel industry. However, with an increase in imports from countries, such as China, UAE, USA, Malaysia, etc., there has been an increase in dumping incidents that have caused serious damage to various domestic industries in India.

Anti-Dumping Duty In India

Anti-dumping duty is a measure imposed on imports from another country by the government of a country that exports its goods at a lower price than the market value in its own domestic market.

Anti-dumping duty is levied in order to protect the domestic market of the importing country against unfair trade practices used by exporters to disrupt the domestic market and create a monopoly by producing similar products at very low prices.

The 1975 Customs Tariff Act sets out the circumstances under which the Central Government may impose anti-dumping duties on dumped goods on the domestic Indian market. The anti-dumping regulations included in the 1995 amendment create requirements for the importer to recognize, determine, and receive anti-dumping duty.

Procedure to Levy Anti-Dumping Duty

The following procedure to charge anti-dumping duty in India:

  1. The domestic industry or Director-General of Trade Remittances (DGTR) submits an application on its own merits.

  2. The proceedings begin, and responses from 50 per cent of domestic producers that make up the total domestic market are invited.

  3. On the basis of preliminary findings, provisional anti-dumping duty is imposed.

  4. Final findings are drawn from the domestic industry and importers inspection.

  5. The exporting company is levied the final anti-dumping duty.

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