Anti-dumping duty is applicable on certain types of steel products imported from China, Vietnam and South Korea. India imposed duty on these following anti-dumping investigations conducted by the Directorate General of Anti-Dumping & Allied duties (DGAD).
Dumping is an international trade practice where sellers export a product and sell it at a price lower than the price it carries in its domestic market. Dumping is considered an unfair trade practice by many countries, so they place high tariffs on products that are dumped onto their markets.
Dumping impacts the price of that product in the importing country, hitting margins and profits of local manufacturing firms. Anti-dumping duty is imposed to rectify the situation arising out of the dumping of goods and its trade distortive effect.
The Directorate General of Trade Remedies (DGTR) has recommended the imposition of anti-dumping duty on hot rolled steel and stainless steel products imported from China, Russia, South Korea.
According to global trade norms, including the World Trade Organization (WTO) regime, a country is allowed to impose tariffs on such dumped products to provide a level-playing field to domestic manufacturers.
Anti-dumping duty is imposed to prevent products from being sold at prices that are lower than the fair market value of a similar product in the domestic market. For example, if an exporting country subsidizes some of its products by charging an artificially low price, and then exports those subsidized goods into another country's markets, it could cause serious damage to domestic manufacturers of those products and harm consumers.
Countervailing Duties (CVDs) are tariffs levied on imported goods to offset subsidies made to producers of these goods in the exporting country.
CVDs are meant to level the playing field between domestic producers of a product and foreign producers of the same product who can afford to sell it at a lower price because of the subsidy they receive from their government.
The Directorate General of Trade Remedies (DGTR) is an apex national authority under the Ministry of Commerce & Industry for administering all trade remedial measures including anti-dumping, countervailing duties and safeguard measures. It provides trade defence support to the domestic industry and exporters in dealing with increasing instances of trade remedy investigations instituted against them by other countries.