DG Safeguards to soon come under commerce ministry

The Directorate General of Safeguards (DGS) will soon be shifted to the commerce ministry as part of government's plan to create a single authority for imposing trade remedies to protect domestic industry, an official said today.

DGS is currently under the finance ministry.

As per the plan, the government would merge DGS with the Directorate General of Antidumping and Allied Duties (DGAD), the investigating arm of commerce ministry, to streamline the process of imposing trade remedies.

Trade remedies which include anti-dumping, countervailing and safeguard duties are allowed under global trade norms to guard domestic industries from significant imports or cheap inbound shipments.

"By merging the two Directorate Generals, the government wants to create a single point contact which can conduct investigations related to international trade and remedial duties," the official told PTI.

The official said the shifting of DGS to the commerce ministry will happen "very soon, definitely by end-June".

Under the Goods and Services Tax (GST) regime, DGS has also been entrusted to investigate complaints of profiteering.

The investigating agency submits its reports to the National Anti-profiteering Authority, which then takes its own view and decides on the penalty.

Once DGS is shifted to the commerce ministry, the directorate general will be renamed and will continue to be under the Department of Revenue in the finance ministry to carry out profiteering investigations.

"It could be renamed as Directorate General of Anti-Profiteering or GST Anti-Profiteering Investigation wing. A final decision will be taken by the finance ministry," the official added.

Currently, DGAD conducts probe into allegations of cheap imports, by domestic industries.

If established that dumping has caused material injury to domestic players, it recommends imposition of anti-dumping or countervailing duty.

While DGAD recommends the duties, the finance ministry imposes the same.

On the other hand, DGS is mandated to investigate the existence of serious injury or threat of serious injury to the domestic industry as a consequence of "increased" import of an article into India.

Unlike the safeguard duty, which is levied in a uniform way, anti-dumping duty varies from company to company and country to country.

India is one of the largest users of these trade remedies.

Countries initiate anti-dumping probes to determine if the domestic industry has been hurt by a surge in below-cost imports. As a counter-measure, they impose duties under the multilateral WTO regime.

Anti-dumping measures are taken to ensure fair trade and provide a level-playing field to the domestic industry. These measures do not restrict imports or cause an unjustified increase in cost of products.