UPSC Articles
DGTR recommends withdrawal of anti-dumping duty on viscose
Part of: GS Prelims and GS- III – Economy
In news
- The Directorate General of Trade Remedies (DGTR) has suggested the withdrawal of the anti-dumping levy on viscose staple fibre originating in or exported from Indonesia or China and imported by India.
What is Dumping?
Dumping is a process wherein a company (Ex: Chinese Firm X) exports a product (for Ex: to India) at a price that is significantly lower than the price it normally charges in its home (China) market.
What is Anti-Dumping Duty?
- An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are dumped.
- This is done with the rationale that these products have the potential to undercut local businesses and the local economy.
- According to global trade norms, including WTO, a country is allowed to impose anti-dumping duty to provide a level-playing field to domestic manufacturers.
- The duty is imposed only after a thorough investigation by a quasi-judicial body, such as DGTR (Ministry of Commerce & industry) in India.
- While the intention of anti-dumping duties is to save domestic jobs, these tariffs can also lead to higher prices for domestic consumers.
- In the long-term, anti-dumping duties can reduce the international competition of domestic companies producing similar goods.
Different from Countervailing Duty (CVD):
- Countervailing Duties (CVDs) are tariffs levied on imported goods to offset subsidies made to producers of these goods in the exporting country (Ex: China).
- CVDs are meant to level the playing field between domestic producers of a product and foreign producers of the same product who can afford to sell it at a lower price because of the subsidy they receive from their government
News Source: TH
