What are Anti-Dumping Duties? Imposed by India on 5 Chinese imports

Did you know that recently, India has imposed anti-dumping duties on five Chinese goods? The motive of this move is to neutralize the effect of cheaper imports that can potentially knock out local producers. The targeted imports are aluminum foil, Soft Ferrite Cores, Trichloro Isocyanuric Acid, certain thicknesses of vacuum-insulated flasks, and Poly Vinyl Chloride Paste Resin, all of which were reportedly being exported to India at prices lower than their normal value.

What is "Dumping?"

Dumping is the practice of a manufacturer selling a product at a price below its market value in the domestic market. Dumping can create an unfair trade advantage and make it challenging for domestic industries in the importing nation to compete.

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Why Anti-Dumping Duties?

Imagine you run a small business making steel products, but suddenly, cheap imports flood the market, making it hard for you to compete. This is where anti-dumping duties come in—they act as a shield for local businesses against unfair competition.

How Do Anti-Dumping Duties Work?

Governments impose these duties after conducting proper investigations to see whether imported products are being offered at unfairly low prices, which harms domestic industries. In India, this task is performed by the Directorate General of Trade Remedives (DGTR) in the Commerce Ministry. The DGTR keeps a constant watch on imports and suggests required measures.

Global Rules and Fair Trade

Anti-dumping tariffs are not India's invention—they are permitted by World Trade Organization (WTO) regulations. The General Agreement on Tariffs and Trade (GATT), under Article 6, permits nations to respond to dumping. The Anti-Dumping Agreement ensures that these measures are equitable and transparent.

How does it work?

If a nation dumps goods in another market at unreasonably low prices, the importing nation can impose additional tariffs on them. This sets their price level to normal and safeguards domestic industries.

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India's Trade Battle with China

China is India's second-largest trading partner, but here's the catch—the trade deficit (the difference between what India imports from China and what it exports) has increased to $85 billion in 2023-24. To address this, India is imposing anti-dumping duties to shield its industries and make the playing field more level.

By doing so, India gives a very clear message: cheap imports need not happen at the expense of local industry!