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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

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