Anti-dumping is a measure taken to reduce the distortive effects of dumping. Dumping is said to occur when a company exports goods at a price that is lower than what it would normally charge in its home market. Anti-dumping is considered an unfair trade practice and it can have a distortive effect on global trade.
This topic is significant for all IAS exam aspirants.
Why is dumping illegal?
Dumping is considered as an unfair business practice internationally. And, it is illegal in some countries to dump products as its hampers the domestic business of the country and poses a threat to their own products(where the products are dumped).
Dumping can highly affect the gross domestic products of countries.
What are dumping duties?
Anti-dumping duties are tariffs imposed by the government of the country where the products are being dumped. These tariffs are imposed upon the discretion of the government in order to protect the domestic and local businesses from getting affected by the unfair trade practices of foreign products.
What is the dumping margin?
The dumping margin or the margin of dumping can be calculated by subtracting the weighted average export price of the goods from the weighted average normal value of the goods.
Normal Value – Export Price= Margin of Dumping