Anti-dumping probes rise with green shoots

Even as the economy is showing signs of  revival, industry's fears about dumping by other countries is on the rise, prompting the government to initiate as many as 20 fresh anti-dumping investigations since the beginning of current financial year, compared to 21 in all of 2008-09.

Of the 20 investigations initiated till December 7, as many as 15 cases are against China, followed by Thailand, Japan and Malaysia. Besides, investigations have also been initiated against the EU, Russia, Australia, Vietnam, Singapore, Israel, Saudi Arabia, Indonesia, Mexico, Taiwan, South Korea and Oman.

The investigations underway at the Directorate General of Anti-Dumping and Allied Duties (DGAD) under the ministry of commerce and industry are mostly on products such as consumer goods, industrial chemicals, transmission equipment, auto parts, electronic items and machineries. “India is a tempting market, so we have to be vigilant. Also, with the recovery of the economy in sight, investigations will only rise with increased recourse by domestic industries,” official sources told Business Standard.

China faces fresh anti-dumping investigations on products such as radial tyres, front axle beam and steering knuckles, weaving machines, plastic processing machinery, industrial chemicals, carbon black and chemical compounds.

China had topped the investigations list last year as well, when the number of cases initiated against it were 16, followed by Thailand, South Korea, Indonesia, Malaysia, Taiwan, Russia, South Africa, US, EU and Singapore among others. The cases were against products like chemicals, pharmaceuticals, consumer goods, metal products, fibre and yarns.

Sources also added that the crisis in Dubai could act as a trigger, as it might lead to fall in the prices of several commodities. However, according to experts, imports into India from Dubai are not much.  “I see this as a very unlikely possibility as imports into India from Dubai is approximately 12 per cent of India’s total imports and the commodities’ share in this import basket is even smaller,” said Shanto Ghosh, principal economist, Deloitte India.

According to a report by the World Trade Organisation (WTO), India has initiated the highest number of anti-dumping cases compared to other members. India had initiated as many as 42 investigations into anti-dumping activities by the third quarter of 2008, highest among the total of 120 such cases moved by WTO members.

Anti-dumping cases rose by 16.5 per cent to 120 from 103 by the end of 2008-09, when the global economic downturn started to thicken, stated the report.

In the Foreign Trade Policy of 2009-14, the government had announced the setting up of a Directorate of Trade Remedy Measures to help Indian industry, exporters and small and medium enterprises.

There are currently three types of measures followed to stop the surge of imports of a specific product. These are applied against a petition filed by the domestic industry  being affected due to the dumped product.

The DGAD conducts an investigation against a specific complaint made by a particular industry that has to prove the ‘injury’ and recommends it to the Ministry of Finance, which imposes the anti-dumping duty by a notification within three months. 

Depending on the outcome of investigation, the revenue department of the ministry of finance could also levy a safeguard duty. While the anti-dumping duty remains in force for five years, safeguard measures do not last for more than four years.