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Anti Dumping Duty


Introduction

Anti-dumping created due to unfair trade practices in market. Dumping means export of goods by a country to another country at a price l;ower than its normal value. Dumping occurs, when a company sells it's goods at a lower price in an export market than in its domestic market. It measures directly affect pricing, because it is the most fundamental element of business and will create a negative impact on the pattern of trade.

Why dumping takes place?

  • To drive competitors out of the market.
  • Enable companies to artifically lower their prices.

Terms of Anti-Dumping Duty

Dumping Margin: It is the difference between the normal value and the export price of the goods.

Export Price: It is the price at which it is exported to the importing country.

Types of dumping

Predatory Dumping: It refers to the "temporary" sale of a commodity at below cost or at a lower price in oreder to drive foreign producers out of business after which prices are raised to take advantage of the newly acquired monopoly power.

Persistent Dumping: It refers the dumping results from international price descrimination.

Sporadic Dumping: It refers the "ocassional sale" of the commodity at below cost or at a lower price abroad than domestically in order to obtain reduce domestic prices.

Dumping effects on Market

Dumping can reduce sales volume and market shares, as well as its sales prices, so it can be harmful for domestic industry. The main objective of anti dumping duty is to rectify and re-establish fair trade. So, Anti-Dumping is an instrument for ensuring fair trade not a measure of protection for the domestic industry.


References

For further details please visit the sites:-

www.cbec.gov.in
www.commerce.nic.in
www.usitc.gov