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Anti-Dumping Duty: Shielding Indian Industry from Unfair Trade

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India has imposed a five-year anti-dumping duty on imports of aluminium foil, Pretilachlor (a herbicide), and Acetonitrile from China, Russia, and Taiwan to protect domestic industries from unfair pricing practices.


What is Anti-Dumping Duty?

  • Definition: A protectionist tariff imposed on foreign goods that are “dumped”—sold at prices lower than their market value in the exporting country.

  • Objective: To safeguard domestic manufacturers from injury caused by cheap imports that distort fair market competition.


Key Legal Framework

  • Allowed under: General Agreement on Tariffs and Trade (GATT) rules of the World Trade Organization (WTO).

  • Countries may impose such duties after a proper investigation proves:

    1. Dumping is occurring

    2. It is causing material injury to the domestic industry

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India’s Recent Action

  • Items Covered:

    • Aluminium Foil (used in packaging)

    • Pretilachlor (agrochemical)

    • Acetonitrile (solvent used in pharma/chemicals)

  • Origin Countries: China, Russia, Taiwan

  • Tenure: 5 years

  • Authority: Directorate General of Trade Remedies (DGTR), Ministry of Commerce


UPSC Relevance

  • GS Paper 3: Indian Economy – External sector, Trade Policy

  • GS Paper 2: Role of WTO and India's trade regulations

  • Important for understanding protectionism, WTO norms, and India-China trade relations


UPSC Prelims Statement-Based Question

Q. With reference to Anti-Dumping Duties, consider the following statements:

  1. Anti-dumping duties are allowed under the GATT provisions of the WTO.

  2. It is imposed when imports are sold at higher prices than domestic products.

  3. The DGTR under the Ministry of Finance imposes these duties in India.

Which of the statements given above is/are correct?

A. 1 only

B. 1 and 2 only

C. 1 and 3 only

D. 1, 2 and 3


✅ Answer: A. 1 only

Explanation:

  • Statement 1 is correct: GATT permits anti-dumping action.

  • Statement 2 is incorrect: Dumping involves selling at lower prices, not higher.

  • Statement 3 is incorrect: DGTR is under the Ministry of Commerce, not Finance.


UPSC Mains Question (GS Paper 3)

What are anti-dumping duties and how do they align with India's trade policy and WTO commitments? Evaluate their role in protecting domestic industries without encouraging trade protectionism.


 
 
 

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