Anti-dumping duty

The Indian government has imposed anti-dumping duty on imports of steel wire rods from China to protect domestic manufacturers from cheap in-bound shipments. The Department of Revenue in a notification yesterday said anti-dumping duty is being imposed for six months on import of wire rod of alloy or non-alloy steel from China.

The measure follows recommendation by the Directorate General of Anti-Dumping and Allied Duties (DGAD) that steel wire road was being exported by China "below the normal value" and "the domestic industry has suffered material injury" because of such imports.

A penalty imposed on suspiciously low-priced imports, to increase their price in the importing country and so protect local industry from unfair competition. Anti-dumping duties are assessed generally in an amount equal to the difference between the importing country's FOB price of the goods and (at the time of their importation) the market value of similar goods in the exporting country or other countries, according to www.businessdictionary.com.

Dumping occurs when the export price of goods imported into India is less than the Normal Value of ‘like articles’ sold in the domestic market of the exporter. Imports at cheap or low prices do not per se indicate dumping. The price at which like articles are sold in the domestic market of the exporter is referred to as the “Normal Value” of those articles.

Sections 9A, 9B and 9C of the Customs Tariff Act, 1975 as amended in 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 framed thereunder form the legal basis for anti-dumping investigations and for the levy of anti-dumping duties. These laws are based on the Agreement on Anti-Dumping which is in pursuance of Article VI of GATT 1994.

Safeguard measures are envisaged to deal with the problem of “increased imports” and neither dumping nor subsidies need be present. For safeguard measures, the injury requirements are more stringent in as much as serious injury to the domestic industry is required to be established.

Even though safeguard measures can take the form of tariff increases or quantitative restrictions, it remains a sparingly used measure, as compensation may have to be paid to the trading partners in appropriate cases. The importance of providing expeditious relief to our domestic industry against the trade-distorting phenomenon of dumping and subsidies cannot be undermined.