DUMPING AND ANTI-DUMPING MEASURES IN INDIA

Authored By: Twinkle Baghel

ABSTRACT:

Dumping is a practice in international trade where exporters sell goods in a foreign market at prices lower than those in their home market, often below production costs, with the intent to outcompete local industries. This practice can cause significant harm to domestic producers by distorting market conditions and threatening the viability of local industries. To address this, India has established a robust legal framework for anti-dumping measures, primarily under the Customs Tariff Act, 1975, and its 1995 amendments. Anti-dumping duties are imposed following investigations led by the Directorate General of Trade Remedies (DGTR), which assess whether dumping has occurred, the extent of injury to domestic industry, and the causal link between the two. These measures are aligned with World Trade Organization (WTO) guidelines, which permit such actions only when material injury is proven and ensure that duties are limited to the margin of dumping. Recent cases, such as duties on chemicals and steel products imported from China and Japan, highlight the ongoing use of anti-dumping tools to protect Indian industries while maintaining fair competition in line with global trade norms.

INTRODUCTION: –

Dumping in international trade refers to the practice where a country or company exports goods to a foreign market at a price lower than the price charged in its own domestic market. This form of price discrimination is often intentional, aiming to gain a competitive advantage in the importing country by undercutting local producers. While dumping can benefit consumers in the short term through lower prices, it is widely viewed as an unfair trade practice because it can harm the domestic industry of the importing country-leading to loss of market share, reduced production, job losses, and even the closure of local businesses. Under World Trade Organization (WTO) rules, dumping is not prohibited unless it causes or threatens to cause material injury to the domestic industry in the importing country. To counteract these negative effects, many countries, including India, impose anti-dumping duties to protect their domestic markets from unfair competition

Anti-dumping, in simple meaning is a measure of shielding the domestic industry. However, anti-dumping measures do not provide any kind of protection to the domestic industry. It only acts for the motive of providing remedy to the domestic industry against the harm and infringement caused by the unfair trade practice of dumping. Dumping is often mistaken and explained as cheap priced imports. However, it is a misapprehension of the term. Dumping means low priced imports only in the relation to the normal value, and not in absolute way.

Example: – Chinese manufacturer sells a mobile in India for ₹17,000, but in china for ₹20,000. Production cost of this mobile is ₹18,500. Such tactic could disrupt India mobile industry

LEGAL FRAMEWORKS

Article VI of GATT permits countries to take action against dumping by way of imposing anti-dumping duties on the dumped product. The GATT has authorized signatories to apply duties to offset dumping when it causes, or threatens to cause, material injury to an industry in the territory of a GATT member.

Section 9A of the Customs Tariff Act, 1975 and the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 form the legal basis for anti-dumping investigations and for the imposition of anti-dumping duties. The Customs Tariff Act, 1975 lays down the circumstances in which the Central Government can impose anti-dumping duties on dumped goods in Indian domestic market. The anti- dumping rules included by the 1995 amendment states the provisions for identification, assessment and collection of anti-dumping duty from the importer

WTO Guidelines

India, as a member of the World Trade Organization (WTO), must follow international trade rules. WTO allows anti-dumping duties only if three key conditions are met:

Dumping is proven through pricing analysis.
Domestic industry has suffered material injury due to dumping.
A direct causal link exists between dumped imports and economic harm.

MAIN CHALLENGES IN IMPLEMENTING ANTI- DUMPING MEASURES IN INDIA:

Complex Determination of “Like Article” and Product Scope

The “like article” means an article which is identical or alike in all respects to the article under investigation for being dumped in India or in the absence of such article, another article which although not alike in all respects, has characteristics closely resembling those of the articles under investigations. In regard to injury to the domestic industry, the industry must be able to show that dumped imports are causing or are threatening to cause “material injury” to the domestic industry.

Calculating Dumping Margins

Accurately comparing export prices and normal values requires complex data analysis. Many exporters do not provide full information, making it difficult to determine individual margins and risking errors that can undermine the effectiveness of duties

Identifying and Defining Domestic Industry

Determining which producers qualify as the domestic industry is complicated, particularly if some are related to exporters or importers, or if there are disputes over standing and representation.

Legal and Appeal Challenges

Anti-dumping decisions are frequently challenged in courts and tribunals, leading to further delays and uncertainty in implementation

Investigation Periods:

To calculate dumping and injury margins, the importing Member authorities will select an investigation period [IP]. This is often the one-year period, preceding the month or quarter in which the case has been initiated. Some jurisdictions, however, use shorter investigation periods, for example, six months. Extremely detailed cost and pricing data will need to be provided for this investigation period. On top of that, an injury investigation period [IIP], detailed in Section 3 below, will be selected, to determine whether the dumping has caused injury

ANTI- DUMPING CASES IN INDIA:

The first anti-dumping investigation in India was initiated in 1992. During the period from 1992 to 2005, the DGAD received large number of applications for initiating antidumping investigations. After examination of these applications, anti-dumping investigations were initiated in 188 cases involving 35 countries/territories (considering 25 EC countries as single territory). The countries prominently figuring in anti-dumping investigations are China PR, EU, Chinese Taipei, Korea RP, Japan, USA, Singapore, Indonesia, Thailand and Russia.

As highlighted in the apex court judgment Reliance Industries Ltd. V. Designated Authorities & Ors., industrialization is vital for transforming India into a modern, powerful state. The Anti-Dumping Law plays a significant role in this context by preventing the destruction of Indian industries, built with the vision of rapid industrialization for economic growth, employment, and technological advancement Anti- dumping duty on steel products (2025)

The Indian government proposed a 12% safeguard duty on steel imports from China, Korea, and Japan. This was in response to a surge in cheap steel imports, which threatened Indian steelmakers. The duty is expected to help the Indian steel industry recover, though it may increase infrastructure costs.

CONCLUSION: –

Dumping poses a significant threat to the stability and growth of India’s domestic industries by enabling foreign producers to undercut local prices and disrupt markets. India’s anti-dumping measures, grounded in national law and aligned with WTO guidelines, are not about blanket protectionism but about providing a fair remedy against unfair trade practices. By imposing anti-dumping duties only when dumping, injury, and causation are clearly established, India seeks to safeguard its industries while adhering to international trade norms. Recent actions, such as duties on steel imports, demonstrate the practical application of these laws to protect Indian manufacturers and support economic development, employment, and technological advancement.

REFERENCE(S): –

ARTICLES:

By Radhika Joshi, anti- dumping regulation a boon or bane

By Sanya Yadav, Antidumping Laws in India: The Consequent Impact of Dumped Imports on the Domestic Industry

By Alexandra Ortiz, what is dumping in international trade? Meaning types and its impact’s

By Priya Vijay, challenges before anti- dumping policy in post Globalised market

By J.K. Dadoo and D.P. Mohapatra, challenges in anti- dumping investigations in India

By Abhinaya Ramesh, Dumping and anti- dumping issues: an Indian perspective

By Monesh Kumar, Position of anti- dumping laws in India

Websites:

https://www.cmaknowledge.in/2025/03/anti-dumping-duty-in-india.html

https://www.investopedia.com/terms/d/dumping.asp