DGTR recommends anti-dumping duty on sodium cyanide imports
- April 11, 2024
- Posted by: OptimizeIAS Team
- Category: DPN Topics
DGTR recommends anti-dumping duty on sodium cyanide imports
Subject: Economy
Section: External sector
The Directorate General of Trade Remedies (DGTR) has recommended the imposition of anti-dumping duty on sodium cyanide (NaCN) imported from China, the European Union, Japan, and Korea.
Reasons for Anti-Dumping Duty Recommendation:
- Industry Injury: The DGTR found that the domestic industry had suffered injury despite capacity expansion.
- Factors of Injury:
- High volumes of dumped imports
- Suppressed prices
- Production declines
- Financial losses
Impact on Domestic Industry:
- The domestic industry was compelled to sell at losses to increase its market share.
- Significant investments of about ₹500 crore were made by the domestic industry to bridge the demand-supply gap.
- The current situation with dumping had forced domestic players to suspend production due to economic unviability.
Duration of Anti-Dumping Duty:
- The recommended anti-dumping duty on sodium cyanide imports from China, the European Union, Japan, and Korea is for a period of five years.
Overview of Sodium Cyanide:
- Usage: Sodium cyanide is utilized in various industries:
- Extraction of gold and silver from their ores
- Electroplating and heat treatment of metals
- Manufacturing of insecticides, dyes, pigments, and bulk drugs, among others.
Directorate General of Trade Remedies (DGTR)
The Directorate General of Trade Remedies (DGTR) is the apex national authority under the Ministry of Commerce and Industry responsible for administering all trade remedial measures. These measures include anti-dumping duties, countervailing duties, and safeguard measures.
Functions of DGTR:
- Trade Remedial Measures: DGTR administers various trade remedial measures to protect domestic industries from unfair trade practices. This includes:
- Anti-Dumping Duties: Imposed to rectify the situation arising from the dumping of goods, where a country exports goods to another country at prices lower than in its home market.
- Countervailing Duties: Levied on goods that have received government subsidies in the originating or exporting country.
- Safeguard Measures: Put in place to protect domestic industries from sudden and significant increases in imports.
- Support to Domestic Industry: DGTR provides trade defense support to domestic industries and exporters facing trade remedy investigations initiated by other countries. This includes legal and technical assistance throughout the investigation process.
Anti-Dumping Duty (ADD):
- Objective: The imposition of Anti-Dumping Duty aims to counter the adverse effects of dumping on the domestic industry.
- Purpose: It is a protectionist tariff imposed by a domestic government on foreign imports believed to be priced below fair market value.
- Long-Term Impact: ADD can reduce international competition for domestic companies producing similar goods, providing them with a level playing field.
- WTO Compliance: The use of anti-dumping measures is permitted by the World Trade Organization (WTO) to ensure fair competition in international trade.
Differentiation from Countervailing Duties:
- ADD: A customs duty imposed on imports to protect against goods being dumped at prices significantly lower than the normal value.
- Countervailing Duty: Imposed on goods that have received subsidies in the originating country, countering the unfair advantage conferred by these subsidies.
Legal framework
Sections 9, 9 A, 9 B and 9 C 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 and Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidised Articles and for Determination of Injury) Rules, 1995 framed there under form the legal basis for anti-dumping and anti subsidy investigations and for the levy of anti-dumping and countervailing duties. These laws are in consonance with the WTO Agreements on Anti Dumping and Anti Subsidy countervailing measures.
WTO Provisions for Anti-Dumping Duty:
- Validity: An anti-dumping duty remains valid for a period of five years from the date of imposition unless revoked earlier.
- Sunset Review: The duty can be extended for another five years through a sunset or expiry review investigation.
- Purpose: A sunset review evaluates the need for the continued existence of the duty, assessing its effectiveness and impact on the industry.
- Initiation: Such a review can be initiated suo moto (on its own) or based on a substantiated request from or on behalf of the domestic industry.