With apparent changes in the global economy through ups and downs between globalisation and deglobalisation, trade remedies have garnered paramount importance. India is not different- the Make in India initiative by Narendra Modi led government remains ineffective when the domestic industries have to contend with imported or 'dumped' products.
‘Dumping’ happens when a product is sold by an exporter at a lower price than the price at which it is sold in exporter’s domestic market. Dumping is not an illegal activity, however, it must not cause damage to the domestic market of the importing country.
To ensure dumping activities do not affect the domestic market, the Indian government has imposed anti-dumping duties against an exporter who causes any material or substantial injury to a domestic industry in India. The anti-dumping law in India is the Customs Tariff Act, 1975, which was amended in 1995.
Primarily, the anti-dumping laws in India were enacted to protect the iron and steel industry in India. However, with an increase in imports from countries like China, UAE, USA, Malaysia, etc., dumping incidents have increased that have caused grave damage to different domestic industries in India.
Who can file a complaint against dumping activities in India?
The Directorate of Anti-Dumping and Allied Duties (DGAD) can take a suo moto cognizance to impose anti-dumping duty on an importer when it is satisfied that a substantial and grave injury is caused to a domestic industry.
A complaint can be filed by the domestic industry engaged in dumped goods. ‘Domestic industry’ includes the manufacturers who constitute a majority portion of the entire domestic industry of dumped goods. The application for anti-dumping duty must be supported by producers who collectively manufacture at least 50% of total production. The investigation process must also be supported by manufactures constituting 25% of total domestic production.
Anti-Dumping Duty in India
Anti-dumping duty is a measure imposed by a country's government on imports from another country which exports its goods at a lower price as compared to the market value in its own domestic market. Anti-dumping duty is levied to protect the importing country's domestic market from unfair trade practices used by exporters to disrupt the domestic market and creating a monopoly by producing similar products at very low prices.
The Customs Tariff Act, 1975 lays down the circumstances in which the Central Government can impose anti-dumping duties on dumped goods in Indian domestic market. The anti-dumping rules included by the 1995 amendment lays down provisions for identification, assessment and collection of anti-dumping duty from the importer.
The anti-dumping laws state that the Indian government may impose anti-dumping duty after it conducts the inquiry and determines normal value, export value and the margin between two. The government has the power to make anti-dumping rules to identify goods that are liable for levying anti-dumping duty.
In case any material or substantial injury is caused to the domestic industry, the Indian government has the power to levy other duty in addition to anti-dumping duty. The quantum of damage is analysed by the volume of goods dumped, their consumption and the effect they have on the domestic market.
Anti-dumping duty is applicable only for a period of 5 years and its applicability ceases if the duty is not reviewed and renewed.
What is the procedure of levying Anti-dumping Duty in India?
An application is filed by the domestic industry or DGAD on its own cognizance.
The proceedings begin and responses are invited from 50% domestic producers constituting the total domestic market.
Provisional anti-dumping duty is levied on the basis of preliminary findings.
Final findings are drawn on the basis of inspection of domestic industry and importers.
The final anti-dumping duty is levied on the exporting company.
The entire investigation process has to be concluded within 12 months from the date of filing the application. Anti-dumping rules also state that this period may be extended by the period of 6 months, limiting the time period to 18 months. An application for appeal can be filed against the final decision can be filed with the Customs, Excise and Service Tax Appellate Tribunal along with Rs. 15,000 within 90 days of final order.
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