ANTI-DUMPING

By: Sahil Sharma

Symbiosis Law School, Noida
 DUMPING - DEFINITION
The export by a country or company of a product
at a price that is lower in the foreign market than
the price charged in the domestic market.

Dumping occurs when

Normal Value in Export market > Export Price

WTO decides whether dumping is

unfair competition
 CAUSES OF DUMPING
• Producers in one country are trying to stay competitive
with producers in another country.

• Producers in one country are trying to eliminate the

producers in another country and gain a larger share of
the world market

• Producers are trying to get rid of excess stuff that they

can't sell in their own country,

• Producers can make more profit by dividing sales into

domestic and foreign markets, then charging each market
whatever price the buyers are willing to pay.
 CONSEQUENCES OF DUMPING
• Affects the financial viability of the domestic
manufacturers.

• Job losses and unemployment in the long run effects trade

relations between countries.

• Anti-Dumping rules and imposition of tariffs an quotas.

Chinese Economy in relation with Dumping
 CHINA – WORLD‘S TOP DUMPING
OFFENDER

No Market Economy Status!!!

An economy that relies chiefly on market forces to allocate goods and resources and
to determine prices.

So Analogous Market used…

•Quite unreasonable to compare

•China now developing an Open market unlike the 60’s

•Demands by other parties - Should give greater independence to the state-controlled

banking sector to issue loans based on what businesses could pay them back.

•Status in 2016.
 ARTICLE VI OF GATT AND THE
ANTI- DUMPING AGREEMENT
• Explicitly authorizes the imposition of a specific anti-
dumping duty on imports from a particular source, in
excess of bound rates

• Members may challenge the imposition of anti-dumping

measures, in some cases may challenge the imposition
of preliminary anti-dumping measures, and can raise all
issues of compliance with the requirements of the
Agreement, before a panel established under the DSU

• Article 18.5 of the AD Agreement requires Members to

notify their domestic laws and/or regulations relating to
anti-dumping to the ADP Committee.
 NOTIFICATIONS UNDER THE
AGREEMENTON IMPLEMENTATION OF
ARTICLE VI
• WTO Members obliged to submit several types of
notification to the Committee on Anti-Dumping
Practices.

• Except where a notifying Member specifically requests

the contrary, all notifications are issued as unrestricted
documents and are fully accessible to the public.
 WTO SAFEGUARD
PROVISIONS
• Authorities to announce publicly when hearings are to take place
and provide other appropriate means for interested parties to
present evidence. The evidence must include arguments on
whether a measure is in the public interest

• Quantitative restrictions (quotas) normally should not reduce the

quantities of imports below the annual average for the last three
representative years for which statistics are available, unless clear
justification is given that a different level is necessary to prevent or
remedy serious injury
 WTO SAFEGUARD
PROVISIONS
• The WTO‘s Safeguards Committee oversees the
operation of the agreement and is responsible for the
surveillance of members‘ commitments. Governments
have to report each phase of a safeguard
investigation and related decision- making, and the
committee reviews these reports

• Safeguard actions on developing countries: An

importing country can only apply a safeguard
measure to a product from a developing country if the
developing country is supplying more than 3% of the
imports of that product, or if developing country
members with less than 3% import share collectively
IMPACT OFDUMPING ON INDIAN
ECONOMY
• Actual or potential decline in sales
• Loss of profits
1 • Decrease in market share

• Reduction in capacity utilization

• Reduction in wages
2 • Cut down in manpower

• Inability to raise capital

• Loss in contracts
3 • Shutdown of plant
ANTI-DUMPING IN INDIA:
LEGAL FRAMEWORK
 ANTI-DUMPING IN INDIA: LEGAL
FRAMEWORK
• The principle of imposition of anti-dumping duties was propounded by the Article
VI of General Agreement on Tariffs & Trade (GATT) 1994 – Uruguay Round

• Indian legislation in this regard is contained in Section 9A and 9B (as amended in

1995) of the Customs Tariff Act, 1975

• Further regulations are contained in the Anti-Dumping Rules [Customs Tariff

(Identification, Assessment and Collection of Anti-Dumping Duty on Dumped
Articles and for Determination of Injury) Rules, 1995]

• The Designated Authority for conducting investigations pertaining to Anti-Dumping

issues and on basis thereof, for forwarding its recommendations is the Ministry of
Commerce, Government of India.
 ANTI-DUMPING IN INDIA: LEGAL
FRAMEWORK
• Anti-dumping, anti-subsidies & countervailing measures in India are administered by
the Directorate General of Anti-dumping and Allied Duties (DGAD) functioning in the
Department of Commerce in the Ministry of Commerce and Industry and the same is
headed by the DesignatedAuthority.

• The Central Government may, by notification in the Official Gazette, appoint a person
not below the rank of a Joint Secretary to the Government of India or such other
person as that Government may think fit as the Designated Authority.

• The Designated Authority is a quasi-judicial authority notified under the

Customs Act, 1962.

• A senior level Joint Secretary and Director, four investigating officers and four costing
officers assist the DGAD plus a section under the DGAD headed by the
SectionOfficer to deal with the monitoring and coordination of die functioning of the
DGAD.
 ANTI-DUMPING IN INDIA: LEGAL
FRAMEWORK
• The Designated Authority's function, however, is only to conduct die anti-
dumping/anti subsidy & countervailing duty investigation and make
recommendation to the Government for imposition of anti-dumping or anti
subsidy measures.

• The law provides that an order of determination of existence, degree and

effect of dumping is appealable before the Customs, Excise and Gold
(Control) Appellate Tribunal (CEGAT) — a judicial tribunal. It reviews final
measures and is independent of administrative authorities.

• This is consistent with the WTO provision of independent tribunals for appeal
against final determination and reviews. No appeal will lie against the
preliminary findings of the Authority and the provisional duty imposed on the
basis thereof. The appeal to the CEGAT should be filed within 90 days.
 DUMPING CASES FILED BY
INDIA
272 cases against other nations.
• Out of which 149 are against China
• Cases are filed under various products and profiles as follows:
• Chemicals & Petrochemicals
• Pharmaceuticals
• Textiles/Fibres/Yarns
• Steel & Other Metals
• Consumer Goods
• Other Products
 DUMPING CASES FILED BY INDIA: INDIA VS
•
CHINA
India on 13 January 2012 extended for five years anti-dumping duty on import of four Chinese
products in the face of widening trade gap with China. The duty has been imposed to protect the
domestic industry from cheap imports.

• As per the Revenue Department notification issued for the purpose, import of certain type of silk
fabrics from China is to attract anti-dumping duty of $1.82 to $7.59 per meter. The duty was first
imposed on the fabrics in December 2006 till December 2011.
Notifications for extension of anti-dumping duty on imports of cellophane transparent film and
saccharin from China for five years have also been issued. Saccharin is a non-nutritive sweetener
and considered to be low calorie substitute for cane sugar.

• India had a trade deficit of $16 billion against China during 2010-11. It has already crossed $20
billion in the first seven months of 2011-12. The Directorate General of Anti-Dumping (DGAD) had
carried a suo motu probe in December 2010 to examine whether cessation of the duty would lead
to continuation of dumping and injury to the domestic players. Following the review, DGAD had
recommended continuation and enhancement of the anti-dumping duty. India till date initiated
about 150 anti-dumping cases against China, which account for over half of such actions taken
by the country against foreign nations.

• In the notification it was also specified that the duty on import of certain type of nylon filament
yarn from China, Chinese Taipei, Malaysia, Thailand and Korea will be imposed at USD 0.20 to
USD 1.51 per kilogram for another five years.

• the government also levied provisional anti-dumping duty on import of phosphoric acid (excluding
agriculture /fertiliser grade) from Israel and Taiwan. The duty at $116.25 to USD 260.26 per tonne
has been imposed for six months.
 DUMPING CASE FILED AGAINST
INDIA
Allura Red Color[(FD&C)Red No.40] case---USA Vs India

• Its used in soft drinks, baked foods, pet foods and pharmaceutical
drugs.

• Case was filed by US colors company Sensient Technologies on the

grounds of import commodity allura red coloring being sold at less than
fair value in USA.

• Decision by 4 Commissioners in favor of India saying that ―there is not a

reasonable indication that a US Industry is is materially injured or
threatened with material injury by reason of imports of allura red coloring
from India that are allegedly subsidised and being sold in the US at less
than the fair value.
THANK YOU!!