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Anti-dumping Duty on Steel Imports

  • 24 Jun 2020
  • 3 min read

Why in News

Recently, India imposed anti-dumping duty on imports of certain types of steel products from China, Vietnam and South Korea.

Key Points

  • Dumping:
    • In international trade practise, dumping happens when a country or a firm exports an item at a price lower than the price of that product in its domestic market.
    • Dumping impacts the price of that product in the importing country, hitting margins and profits of local manufacturing firms.
    • Anti-dumping duty is imposed to rectify the situation arising out of the dumping of goods and its trade distortive effect.
  • Imposition of Anti-dumping Duty:
    • The anti-dumping duty was imposed after the Directorate General of Trade Remedies (DGTR), in its probe, found that the steel products imported in India from these three countries were below its associated normal value, which resulted in dumping.
      • The duty has been imposed for five years with a view to guard domestic manufacturers from cheap imports from these countries.
      • Earlier, a provisional duty was imposed in October 2019 on these products from these three countries, which expired in April 2020.
    • According to global trade norms, including the World Trade Organization (WTO) regime, a country is allowed to impose tariffs on such dumped products to provide a level-playing field to domestic manufacturers.
      • The duty is imposed only after a thorough investigation by a quasi-judicial body, such as DGTR, in India.
  • Different from Countervailing Duty:
    • Anti-dumping duty is different from countervailing duty. The latter is imposed in order to counter the negative impact of import subsidies to protect domestic producers.
    • 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.

Directorate General of Trade Remedies

  • It is the apex national authority under the Ministry of Commerce and Industry for administering all trade remedial measures including anti-dumping, countervailing duties and safeguard measures.
  • It provides trade defence support to the domestic industry and exporters in dealing with increasing instances of trade remedy investigations instituted against them by other countries.

Source: FE

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