Anti-Dumping Duty On Chinese Products
Context:
• The Central Government (Department of Revenue, Ministry of Finance), on the basis of the recommendations of the Directorate General of Trade Remedies (DGTR), Department of Commerce, has imposed anti-dumping duty for five years on five Chinese products recently namely certain flat rolled products of aluminium, sodium hydrosulphite, silicone sealant, hydrofluorocarbon (HFC) component R-32 and hydrofluorocarbon blends.
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 priced below fair market value. Dumping is a process wherein a company exports a product at a price that is significantly lower than the price it normally charges in its home (or its domestic) market.
• An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.
• In order to protect their respective economy, many countries impose duties on products they believe are being dumped in their national market; this is done with the rationale that these products have the potential to undercut local businesses and the local economy.
• While the intention of anti-dumping duties is to save domestic jobs, these tariffs can also lead to higher prices for domestic consumers.
India – China Economic relations:
• Since 2014 Chinese imports to India has been substantially increasing.
• India has been largely dependent on Chinese goods as they are way cheaper than in the domestic market.
• China is facing international criticism due to its dumping activities through some of the proxy countries.
• China has a huge favorable balance of trade on itself, India is facing a balance of payment crisis with respect to India.
Source: THE HINDU.
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