What is Anti-Dumping Duty?

• An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below the price at which it is sold in the exporters’ domestic market.
• This is imposed with the rationale that these products have the potential to undercut local businesses and the local economy.
• The World Trade Organization (WTO) operates a set of international trade rules for the regulation of anti-dumping measures.
• In general, the WTO agreement permits governments to act against dumping “if it causes or threatens material injury to an established industry in the territory of a contracting party.

Anti-Dumping Mechanism in India:

• The Anti-Dumping mechanism in India is administered by the Directorate General of Anti-Dumping and Allied Dutites (DGAD) under the Ministry of Finance.
• The anti-dumping law in India is covered under the Customs Tariff Act, 1975, and the Customs Tariff Rules, 1995.
• The DGAD conducts anti-dumping investigations to determine if the domestic industry has been hurt by a surge in below-cost imports.

How is Anti-Dumping Duty calculated?

• The anti-dumping duty is calculated as the difference between the normal value and the export value of the product.
• The normal value is the market value of the product in the domestic market, while the export value is the price at which the product is exported to India.
• The anti-dumping duty is imposed to offset the price difference and prevent the domestic industry from being harmed by cheap imports.

PYQ:

[2015] In India, the steel production industry requires the import of-

(a) Saltpetre

(b) Rock phosphate

(c) Coking coal

(d) All of the above