The Government of India recently made an important decision regarding its trade policies. It has chosen not to impose the Anti-Dumping Duty (ADD) on imports of specific copper products coming from China, Korea, Thailand, and three other countries. This decision comes despite the recommendation from the Directorate General of Trade Remedies (DGTR) in April for imposing this duty on “copper and copper alloy flat-rolled products” from those countries. In understanding this decision, it’s necessary to look at the concepts surrounding the issue.
Understanding Anti-Dumping Duty
Dumping is a term used in the context of international trade. It occurs when goods are exported by one country to another at a value lower than the price it typically charges in its domestic market. This practice can distort fair trade and create imbalance in the market.
To rectify the impact of dumping, countries impose an Anti-dumping duty. The primary objective of this duty is to protect the domestic companies producing similar goods from unfair foreign competition. Anti-dumping measures as tools of ensuring fair competition are permitted by the World Trade Organisation (WTO). This type of duty is distinct from countervailing duties, which are customs duties on goods receiving government subsidies in the originating or exporting country.
Provisions of WTO Regarding Anti-Dumping Duty
According to WTO’s regulations, an imposed anti-dumping duty remains valid for a period of five years, unless revoked before its expiry. If necessary, through a process called Sunset Review, this period may be extended for an additional five years. This review is an evaluation of the continued need for a program or an agency, allowing for an assessment of effectiveness and performance. Such a review can be initiated of its own accord or based on a substantiated request received from or on behalf of the domestic industry.
The Role of the Directorate General of Trade Remedies
The Directorate General of Trade Remedies (DGTR) is the top national authority under India’s Ministry of Commerce and Industry for administering all trade remedial measures. This includes anti-dumping, countervailing duties and safeguard measures. It provides trade defense support to domestic industry and exporters in dealing with increasing instances of trade remedy investigations instituted against them by other countries.
The Decision Not To Impose ADD on Copper Imports
Despite DGTR’s recommendation in April, the Ministry of Finance, which has the final authority to impose these duties, decided not to enforce the Anti-Dumping Duty on imports of specific copper products from the six named countries. While the reason for this decision was not specifically stated, it represents a move by the Indian government towards a more open trading environment. This decision may have broad implications for the Indian copper product industry and its future international trade relationships.
