India's Anti-Dumping Duties: Ensuring Fair Trade
- vidyarthee2021
- Mar 25
- 2 min read
India has recently imposed anti-dumping duties on multiple Chinese goods to counter unfair trade practices. This measure is part of India’s broader strategy to protect domestic industries from predatory pricing while ensuring compliance with World Trade Organization (WTO) guidelines.
Understanding Anti-Dumping Duties
Definition:
As per the WTO, anti-dumping duties are tariffs imposed on foreign imports that are priced below fair market value, a practice known as "dumping."
Dumping occurs when manufacturers export goods at a lower price than their normal value, often to undercut competition in the importing country.
Objective:
To prevent unfair competition from foreign firms.
To protect domestic industries from being driven out of business.
To ensure fair trade and discourage predatory pricing strategies.
WTO Guidelines on Anti-Dumping
Permitted under Article VI of the General Agreement on Tariffs and Trade (GATT) 1994.
Conditions for imposing duties:
Authorities must conduct an investigation to establish:
That dumping has occurred.
That it is causing injury to the domestic industry.
That there is a causal link between dumping and industry damage.
Temporary and Reviewable Measures:
Duties should not be permanent and must be reviewed periodically.
India’s Recent Actions and Its Impact
Focus on Chinese Imports:
India has imposed anti-dumping tariffs on multiple Chinese goods, citing concerns over unfair pricing and market disruption.
Sectors such as electronics, chemicals, steel, and textiles have been most affected by Chinese dumping practices.
Strategic Importance for India:
Reduces dependence on foreign markets by supporting local manufacturers.
Strengthens trade policy and aligns India’s measures with global trade norms.
Prevents long-term economic disruptions caused by artificially cheap imports.
Challenges and Concerns:
Risk of retaliation from China through countermeasures.
The need for continuous monitoring to avoid unfair use of protectionist policies.
Balancing free trade commitments with domestic industry interests.
UPSC Prelims Question
With reference to Anti-Dumping Duties, consider the following statements:
Anti-dumping duties are imposed only by developing countries to protect their domestic industries.
The WTO allows the imposition of anti-dumping duties under Article VI of GATT 1994.
Before imposing anti-dumping duties, a country must establish proof of dumping, injury to domestic industries, and a causal link between the two.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2, and 3
UPSC Mains Question
Q. India’s imposition of anti-dumping duties is essential for protecting domestic industries, but it also raises concerns about trade retaliation and protectionism. Critically analyze.
(GS Paper 3 – Economy & International Trade)
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