ANTI-DUMPING DUTY (Syllabus: GS Paper 3 – Economy)

Context: The Ministry of Commerce and Industry has recommended imposing an anti-dumping duty on aluminium foil imported from China.

Anti-Dumping Duty

• About: It is imposed when imported goods are priced at less than the normal price charged in the exporter's domestic market.

oIt is an instrument to ensure fair trade and is not just a measure of protection per se for the domestic industry.

• Regulatory Authority: The Department of Commerce recommends the anti-dumping duty, provisional or final.

oThe Department of Revenue in the Finance Ministry acts upon the recommendation within three months and imposes such duties.

• WTO's Provisions Related to Anti-Dumping Duty: The use of anti-dumping measures as an instrument of fair competition is permitted by the World Trade Organisation.
• Validity: valid for a period of five years from the date of imposition unless revoked earlier.
• Sunset Review: can be extended for a further period of five years through a sunset or expiry review investigation.

oA 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.

oA review can be initiated suo moto or on the basis of a duly substantiated request received from or on behalf of the domestic industry.

Countervailing duty (CVD)

• About: It is a specific form of duty that the government imposes in order to protect domestic producers by countering the negative impact of import subsidies. It is thus an import tax by the importing country on imported products.
• Regulation in India:In India, the CVD is imposed as an additional duty besides customs on imported products when such products are given tax concession in the country of their origin.

oIt is administered by the Directorate General of Anti-dumping and Allied Duties (DGAD), in the commerce and industry ministry’s department of commerce. 

oThe department of commerce recommends anti-dumping duty, provisional or final.

o

Customs duty:

• About: It refers to the tax imposed on goods when they are transported across international borders. In simple terms, it is the tax that is levied on import and export of goods. The government uses this duty to raise its revenues, safeguard domestic industries, and regulate movement of goods.