The apex Indian authority, Directorate General of Trade Remedies (DGTR), has initiated a review to determine the necessity of continuing the anti-dumping duty on certain steel products imported from China. The move comes in response to complaints from the domestic industry. The anti-dumping duty on these specific steel products was first implemented in February 2017 and is scheduled to end on May 16, 2021.
DGTR’s Role in Trade Remedies
The DGTR operates under the Ministry of Commerce and Industry as a national authority responsible for administering all trade remedial measures. These measures include anti-dumping, safeguard measures, and countervailing duties. The DGTR aids domestic manufacturers and exporters in handling the escalating number of trade remedy investigations brought against them by other countries.
Key Points Regarding the Review
Major private domestic steel producers have submitted an application to the DGTR requesting a sunset review of the anti-dumping duty on imports of seamless tubes, pipes, and hollow profiles of iron, alloy, or non-alloy steel from China. The applicants claim that despite the imposition of the anti-dumping duty, dumping of these products from China has persisted and the volume of imports has significantly risen. The DGTR will review the necessity of maintaining the duties and evaluate the potential impact on the domestic industry if the existing duties were to expire.
Understanding Anti-Dumping Duty
Dumping occurs when a country exports goods to another country at a price lower than what it charges in its home market. This unfair trade practice can distort international trade. The imposition of an anti-dumping duty is a measure to rectify the situation arising from the dumping of goods. In the long term, anti-dumping duties can decrease the global competitiveness of domestic companies producing similar goods. It serves as a protectionist tariff imposed by a domestic government on foreign imports believed to be priced below their fair market value. The World Trade Organisation permits the use of anti-dumping measures to maintain fair competition.
Difference Between Anti-Dumping and Countervailing Duties
An Anti-Dumping Duty (ADD) is a customs duty on imports that provides protection against goods dumped at prices substantially lower than their normal value. In contrast, countervailing duty is a customs duty on goods that have received government subsidies in the country of origin or export.
WTO’s Provisions Regarding Anti-Dumping Duty
According to the World Trade Organization’s provisions, an anti-dumping duty is valid for five years from the date of imposition unless revoked earlier. This validity can be extended for another five years via a sunset or expiry review investigation.
Sunset reviews or expiry reviews evaluate the need for a program or agency’s continuous existence. They enable an assessment of the program or agency’s effectiveness and performance. These reviews can be initiated either suo moto or based on a properly substantiated request received from or on behalf of the domestic industry.
