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 it 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.
Example of Anti Dumping Duty in India: In Dec 2020, the Indian Commerce Ministry recommended to extend the anti dumping duty on carbon black from China and Russia. Carbon black is used in rubber and tyre industry. The final decision lies with the Finance Ministry of India.
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
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