ANTI-DUMPING DUTY - ECONOMY

News: Commerce Ministry recommends anti-dumping duty on Chinese glass imports for 5 years

 

What's in the news?

       The Commerce Ministry has recommended anti-dumping duty of up to $243 per tonne of import of Chinese glass used in home appliances with a view to guard domestic players from cheap inbound shipments from the neighbouring country.

 

Anti-dumping Duty:

       Anti-dumping duties are imposed when it is conclusively proved that a particular item is being exported at a price lower than what is prevailing in the domestic market of the exporter and is leading to disruption in the domestic market, injuring the local producers

       An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.

 

Go back to basics:

Dumping:

       Dumping is a process where a company exports a product at a price lower than the price it normally charges in its own home market.

       The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a-vis foreign producers and exporters.

       The duty is imposed only after a thorough investigation by a quasi-judicial body, such as Directorate General of Trade Remedies, in India.

       The imposition of anti-dumping duty is permissible under the World Trade Organization (WTO) regime.

 

Countervailing Duty:

       It is a specific form of duty that the government imposes to protect domestic producers by countering the negative impact of import subsidies.

       CVD is thus an import tax by the importing country on imported products.