| Dumping takes place when a company sells goods at | | | | Under the GATT provisions, anti-dumping duties |
| a lower price in the foreign market then the price it | | | | cannot exceed dumping margin. However, it is |
| charges in its domestic market. This is an unfair trade | | | | suggested to impose a lesser duty, which is |
| practice which can have a distorted effect on | | | | adequate to remove the injury caused to domestic |
| international trade. | | | | industry. Under Indian laws, the authorities are obliged |
| There are two fundamental parameters used for | | | | to restrict the anti-dumping duty to lower of the two |
| determination of dumping, namely, the normal value | | | | i.e. dumping margin and injury margin. |
| and the export price. Both these elements have to | | | | Any exporter whose margin of dumping is less than |
| be compared at the same level of trade, generally at | | | | 2% of the export price shall be excluded from the |
| ex-factory level, for assessment of dumping. | | | | purview of anti-dumping duties even if the existence |
| The normal value is generally the price of the product | | | | of dumping, injury as well as the causal link is |
| at issue, in the ordinary course of trade, when | | | | established |
| destined for consumption in the exporting country | | | | Extensive investigation against any country is required |
| market. | | | | to be terminated if the volume of the dumped |
| Export price of goods means the price at which the | | | | imports, actual or potential, from a particular country |
| goods are sold to importing country. It is generally | | | | accounts for less than 3% of the total imports |
| the cost, insurance and freight (CIF) value minus the | | | | provided the cumulative imports from all those |
| adjustments account of ocean freight, insurance, | | | | countries who individually account for less than 3%, |
| commission etc. so as to arrive at the value of | | | | are not more than 7%. |
| ex-factory level. | | | | Furthermore, it is imperative to prove that the |
| There is nothing inherently illegal about dumping as | | | | dumping has caused injury to the domestic industry. |
| long as it does not cause material injury to domestic | | | | Disputes in the anti-dumping area are subject to |
| industries. However, when dumping causes or | | | | binding dispute settlement before the Dispute |
| threatens to cause material injury to the domestic | | | | Settlement Body of the WTO, in accordance with |
| industry, the anti-dumping authorities initiate | | | | the provisions of the Dispute Settlement |
| necessary action for investigations and subsequent | | | | Understanding ("DSU") (Article 17). |
| imposition of anti-dumping duties. | | | | Members may challenge the imposition of |
| Under Article VI of GATT 1994, and the | | | | anti-dumping measures, in some cases may challenge |
| Anti-Dumping Agreement, WTO Members can | | | | the imposition of preliminary anti-dumping measures, |
| impose anti-dumping measures, if, after investigation | | | | and can raise all issues of compliance with the |
| in accordance with the Agreement, a determination is | | | | requirements of the Agreement, before a panel |
| made (a) that dumping is occurring, (b) that the | | | | established under the DSU. |
| domestic industry producing the like product in the | | | | Apart from dumping, some of the countries also |
| importing country is suffering material injury, and (c) | | | | resort to subsidization of their exports to other |
| that there is a causal link between the two. | | | | countries. Export subsidies, under the WTO |
| However, in order to take anti-dumping action, | | | | agreement, are treated as unfair trade practice and |
| anti-dumping authorities have to show that dumping is | | | | such subsidies are actionable by way of levy of |
| taking place, calculate the extent of dumping, and | | | | anti-subsidy countervailing duty. However such duties |
| show that dumping is causing injury or threatening to | | | | can be levied only if preliminary investigations have |
| do so to the domestic industries. | | | | established that subsidization is actually taking place. |
| Therefore, the agreement clearly lays down the | | | | The Agreement on Safeguards authorizes importing |
| principle that anti-dumping duties on dumped imports | | | | countries to restrict imports for temporary periods, if |
| cannot be levied solely on the ground that a product | | | | after investigation it has been established that |
| is being sold at a lower price to the importing | | | | imports are causing serious injury to the domestic |
| country. They can be levied only if it is established, | | | | industry. Safeguard measures include increasing tariffs |
| that the dumping is causing material injury to that | | | | over bound rates or imposing quantitative restrictions. |
| industry. | | | | Anti-dumping & Anti-subsidy cases in India |
| Broadly, injury may be analyzed in terms of the | | | | The countries prominently figuring in the anti-dumping |
| volume effect and price effect of the dumped | | | | investigations by India are China PR, EU, Chinese |
| imports. The parameters by which injury to the | | | | Taipei, Korea RP, Japan, USA, Singapore, Indonesia, |
| domestic industry is to be assessed in the | | | | Thailand, Russia etc. Investigations were carried in |
| anti-dumping proceedings are such economic | | | | 188 cases from various sectors like Chemicals and |
| indicators having a bearing upon the state of industry | | | | Petrochemicals, Pharmaceuticals, Textiles, Steel and |
| as the magnitude of dumping, and the decline in sales, | | | | other materials, Consumer goods etc. involving 35 |
| selling price, profits, market share, production, | | | | countries/ territories. |
| utilization of capacity etc | | | | EU, US, Canada and South Africa account for almost |
| Anti-dumping action involves charging extra import | | | | 60% of anti-dumping cases initiated against Indian |
| duty i.e. anti-dumping duty on the particular product | | | | exports. |
| that is being exported from a particular country in | | | | Indian exports are also facing number of anti-subsidy |
| order to bring its price closer to the domestic price or | | | | cases by other member countries of WTO. EU, USA |
| to remove the injury to the domestic industry in | | | | and South Africa account for 83% of the |
| importing country. | | | | anti-subsidy cases initiated against Indian exports. |