Mains Paper 3: Economy
Prelims level: Agro-Based Industries
Mains level: Unfair trade practices and removal procedure in Agro-Based
Agro based industries are a perfect example of mutually beneficial
dependence between the primary and secondary sectors of an economy. It is
well established that in India agro-based industries address important
issues of poverty and unemployment by utilizing local resources.
Profile of Agro-based Industries:
Ministry of Statistics and Programme implementation’s Annual Survey of
Industries (ASI) indicates that 43.6% of factories are agro-based
industries. Almost a similar proportion (42.7%) of persons engaged in
accounted for by agro-based industries.
Data collected from Directorate General of Commercial Intelligence and
statistics (DGCI and S) points to the fact that micro, small and
medium-scale agro-based industries have been contributing to about one-fifth
of India’s total exports, with exports remaining in the range of US$ 56,000
to 59,000 million in the past four years.
Unfair Trade Practices:
Agro-based industries lose their competitive edge due to unfair trade
practices adopted by exporters of other countries. Such practices manifest
in the following two forms:
Dumping- exporters from other countries often dump their products in
Indian markets at rates cheaper than those at which they sell their products
in their domestic markets.
Subsidies- Governments of those countries are observed to be providing
subsidies to their exporters.
In both the cases, the competitive scenario is distorted and the
domestic industry is at loss.
Another related issue is that sometimes the cheap imports are found to
be of low quality, thereby adding to environmental problems and hygiene
India’s Customs Tariff Act, 1975 and related Anti-Dumping Rules and CVD
Rules, 1995 provide the legal backing to protect the domestic manufacturer
against unfair trade practices.
The Directorate General of trade Remedies (DGTR) under Department of
commerce is a quasi-judicial body.
On the recommendation of DGTR, the enhanced duties are put into place by
Department of Revenue.
Another trade remedial measure distinct from an ADD or a CVD, is a
safeguard measure which may be resorted to by a government when there is a
surge in imports of any commodity due to which serious injury is caused to
the domestic industry. In such a case, the affected country can impose a
Given that most agro-based industries are in micro, small or medium
enterprises and may not have the wherewithal to stand competition from
cheaper or subsidised imports, the role of the Government becomes all the
To assist the domestic industry, DGTR has recently set-up a Help-Desk
and Facilitation centre on 23rd September 2019.
Awareness generation amongst agro-based industries becomes a key
ingredient in successful utilization of available trade remedies and to
protect them from unfair trade practices of exports of other countries.
Q.1) With reference to the ARTECH Seminar, consider the following
statements: 1. It was launched in 2019 as part of overall vision of National Defence
2. It is the flagship event of Indian Army which sets the agenda for focus areas
of harvesting indigenous capabilities in the Defence sector.
Which of the statements given above are correct? (a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) None of the above
Q.1) What do you mean by the unfair trade practices in agro based industries?
What are the solutions?