- August 15, 2021
- Posted by: OptimizeIAS Team
- Category: DPN Topics
Subject – Economy
Context – The Finance Ministry has revoked the definitive antidumping duty that was originally imposed in August 2016 on certain Viscose Staple Fibre (VSF) from China and Indonesia.
- Anti-dumping duties are imposed when it is conclusively proved that a particular item is being exported at a price lower than what is prevailing in the domestic market of the exporter and is leading to disruption in the domestic market, injuring the local producers
- An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.
- Dumping is a process where a company exports a product at a price lower than the price it normally charges in its own home market.
- The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a-vis foreign producers and exporters.
- The duty is imposed only after a thorough investigation by a quasi-judicial body, such as Directorate General of Trade Remedies, in India.
- The imposition of anti-dumping duty is permissible under the World Trade Organization (WTO) regime
Sunset review investigation
- Under the Customs Tariff Act, 1975, as amended from time to time and the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules 1995, the Designated Authority is the Directorate General of Trade Remedies.
- Anti-Dumping Duty is applicable only for a selective period. If dumping still continues, the industry can apply for a sunset review at the end of 5 years.
- Globally, once a sunset review is applied for, the duty is extended for 1 year pending investigation.
- In India, industries have been asked to apply for sunset review 9 months before the expiry of the duty.
- This made the Indian players getting deprived of protection for a year compared to their peers across the world.
Different from Countervailing Duties – ADD is a customs duty on imports providing a protection against the dumping of goods at prices substantially lower than the normal value whereas countervailing duty is a customs duty on goods that have received government subsidies in the originating or exporting country.