INDIA LEVIED ANTI-DUMPING DUTIES ON 4 COUNTRIES
What’s in news?
India has imposed anti-dumping duty of up to USD 1,559 per tonne on imports of a certain type of sheet used in solar cell making from China, Malaysia, Saudi Arabia and Thailand for five years to safeguard domestic players against cheap shipments.
- In 2010, India launched an ambitious National Solar Policy named “Jawaharlal Nehru National Solar Mission”. Based on this mission, India will import a specific sheet of material of solar panel called “Ethylene Vinyl Acetate sheet for solar module”. By this, the power generation would be raised to 20,000MW of solar power by 2022.
- Based on the raising demand of solar sheet material in Indian markets, many countries like China, Thailand, etc., were willing to do the trade with India. This result in cheap imports of foreign goods and the domestic product get vanished.
- Later on, a complaint was filed by a domestic company, which leads for a probe in April, last year. As a result of the probe, it had concluded that, imposition of the duty is required to offset dumping and injury caused by dumped imports from China, Malaysia, Saudi Arabia, and Thailand.
- The Department of Revenue, Ministry of Finance, In its notification has said that after considering the recommendations of the commerce ministry’s investigation arm DGTR, it is imposing the duty, which is in the range of USD 537 to USD 1,559 per tonne, on imports of “Ethylene Vinyl Acetate sheet for solar module” being exported by these four nations.
- The imports are increased to 6,367 tonne during the period of 2016-17 from 4676 tonnes in 2015-16.
- Anti-dumping duty is a tariff imposed on imports manufactured in overseas countries and that are priced below the fair market value of similar goods in the domestic market. The government imposes anti-dumping duty on foreign imports when it believes that the goods are being dumped in the domestic market. Anti-dumping duty is imposed to protect local businesses and markets from unfair competition by foreign imports.
- The anti-dumping duty can be anywhere from 0% up to 550% of the invoice value of the goods.
WTOs role in Anti-Dumping:
- The World Trade Organisation (WTO) plays a critical role in the regulation of anti-dumping measures.
- As an International organization, it does not regulate firms accused of engaging in dumping activities, but it possesses the power to regulate how governments react to dumping activities in their territories.
- Some government react harshly to foreign companies engaging in dumping activities by introducing punitive anti-dumping duties on foreign imports and the WTO may come in to determine if the actions are genuine, or if they go against the WTO free market principle. The organization prohibits dumping when the action causes material retardation in the domestic market.
- Where dumping occurs, the WTO allows the government of the affected country to take legal action against the dumping country as long as there is evidence of genuine material injury to industries in the domestic market.
Effects of dumping on importing country:
- If a commodity was dumped for a period of time (Short time / long time), the local industries will be affected as they can’t change their production accordingly.
- The price of the dumped commodity will be low when compare with the local commodity. Then, people automatically shifted to the low price commodity. So, the local producers must meet with a loss.
- When dumping stops, this demand will reverse, thereby changing the tastes of the people which will be harmful for the economy.
- If a tariff duty is imposed to force the dumper to equalise prices of the domestic and imported commodity, it will not benefit the importing country.