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Anti-dumping probe against vinyl tiles

  • IASbaba
  • January 27, 2022
  • 0
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Anti-dumping probe against vinyl tiles

Part of: Prelims and GS-III Economy

Context: India has initiated an anti-dumping probe against imports of a certain type of tiles, used for covering the floors in residential and commercial buildings, from China, Taiwan and Vietnam following a complaint by domestic players.

Key takeaways 

  • Directorate General of Trade Remedies (DGTR) is probing the alleged dumping of “vinyl tiles other than in roll or sheet form.
  • If it is established that the dumping has caused material injury to the domestic players, the DGTR would recommend an anti-dumping duty on these imports.

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 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.

Directorate General of Trade Remedies (DGTR)

  • The Directorate General of Trade Remedies was named in May 2018 as an integrated single window agency for providing a comprehensive and swift trade defence mechanism in India.
  • Roles and functions:
    • DGTR deals with Anti-dumping, Countervailing Duty (CVD) and Safeguard measures. 
    • It also provides trade defence support to our domestic industry and exporters. 
    • DGTR provides a level playing field to the domestic industry against the adverse impact of unfair trade practices by using Trade Remedial methods under the relevant framework of WTO arrangements.
  • DGTR functions as an attached office of the Department of Commerce, Ministry of Commerce and Industry.

News Source: TH

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