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.
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.
