Important Topics for UPSC 2017 Exams (Anti-Dumping
A penalty is imposed on questionably low-priced imports, to escalate their
price in the importing country and therefore to protect domestic industry from
- Because, to rectify the trade distortion effect of dumping and
re-establish fair trade.
- WTO under the GATT (General Agreement on Tariff and Trade) allow their
member countries to take specific decision on imposing such anti-dumping
duty to ensure fair trade rather than protecting domestic industry.
Steel sector in India was facing severe loss for past 3-4 years due to very
low price imports from china. Prices of steel plummeted in the international
market due to lower demand and excess capacity of Chinese steel manufacturers.
Scenario was such bad that many steel companies across the globe including India
were facing huge economic loss and even some defaulting cases in India.
Further, reason for such a low steel prices was found out to be over
subsidised production in china. Therefore to counter such predatory pricing many
countries including India has adopted the Anti-dumping duty therefore raising
the cost of import and therefore the final prices. The result of which seems
effective from the recent quarter results of steel companies where most of them
either government controlled (SAIL) or public limited companies (Tata Steel,
Jindal etc.) have shown huge profits and reversal of economic activity.
Impact on Society
- Positive for the sector which was directly suffering for example in the
above case steel sector.
- Negative on larger trade relation between the 2 countries involved.
- Positive for the larger economy since one blocked segment may slow the
- Globally it is seen as the last resort to defend local companies and
therefore some consider it as a protectionist trade policy by the State.
- The exporting country may use anti- dumping method for the other segment
of the importing country and therefore it may result into sour trade
relations in the long run.
- Further, some sectors where large labour force is involved is especially
protected by the State against any dumping effects.
- For example: Jute sector in India due to socio-economic responsibility
of a State towards its citizens.