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Demystifying Indian Jurisprudence On Regulation Of Anti-Dumping Duty Regime

INTRODUCTION

Dumping refers to a situation wherein one country sells its goods to another country at a price much lower than its standard value or lower than the cost of production. This phenomenon can adversely affect domestic industries where such goods are sold, consequently leading to job losses and disequilibrium in the market. Therefore, to mitigate and counteract the detrimental effects of dumping, the government imposes “Anti-Dumping Duty.” It is a tariff imposed on goods imported from foreign markets and sold domestically at a price below their fair value. The ultimate objective of levying anti-dumping duty is to protect the home industries from unfair trade practices and to ensure fair competition.

Article VI of the “General Agreement on Tariffs and Trade” [GATT][1] deals with anti-dumping measures internationally. Following this, almost every member country that is a part of WTO has either amended or adopted its anti-dumping laws in consonance with the GATT provisions. Even countries not part of WTO have also drafted their legislation to keep a check on matters related to dumped products. To conclude, around 90% of world trade exists in the market where anti-dumping duty provisions live[2]. This blog will try to cover the aspects related to the role of Indian Jurisprudence in regulating the anti-dumping duty system.

LEGAL FRAMEWORK IN INDIA

The regulation of anti-dumping duty in India is governed by “The Customs Tariff Act[3] and the “Anti-Dumping Rules.”[4] Additionally, authorities, including the Directorate General of Trade Remedies [DGTR] and the Designated Authority [DA], ensure the effective enforcement of these laws. The DGTR comes under the Ministry of Commerce and Industry and is regarded as the primary authority for anti-dumping investigations. He is responsible for initiating investigations based on applications filed by domestic industries, conducting studies, determining dumping margins, injury, and causal links, and recommending the imposition of anti-dumping duties to the Designated Authority.[5] DA is appointed by the Central Government and is considered to be the final authority on matters related to anti-dumping investigations. He is responsible for reconsidering the findings of DGTR and giving a recommendation if required. The DA also verifies the credibility of details provided by each party involved in the investigation, ensuring strict compliance with the principles and procedures.

The first anti-dumping duty by India was imposed in 1993 against firms from the USA, Korea, Brazil, and Mexico[6] when a product called PVC resin was alleged to be dumped in the Indian domestic market. Consequently, the authorities entertained many applications requesting them to conduct an anti-dumping investigation. DGAD initiated 188 such studies from 1992 to 2004 concerning 35 countries, including China[7], Japan, Indonesia, Korea, Thailand, and Russia.

In the case, the petitioner, a leading float glass exporter, made an allegation against the defendant company of anti-competitive behavior and accused him of imposing discriminatory trade barriers[8]. This case highlights how anti-dumping duty is interdisciplinary with the broader concerns of fair-trade practices in India. Moreover, it is imperative to prove significant damage/injury to the domestic industry before imposing anti-dumping duty for that product. In the case of Jindal Poly Film Ltd. v Designated Authority & Anr.,[9] the petitioner challenged the imposition contending that the DA did not have sufficient evidence to establish injury being caused to the market. They further argued that the anti-dumping duty imposed on their imports was, thus, unjustified. The matter went to the higher court for examination. This case emphasized the importance of transparency in the process to ensure that duty is imposed only when warranted. It also pointed out the need for careful examination of evidence and adherence to legal procedures to balance safeguarding domestic industries and promoting fair trade practices in India.

CHALLENGES AND CRITICISMS

One of the major criticisms faced by India is the lack of transparency in its anti-dumping duty regime. Stakeholders believe that the process should involve detailed explanations for every decision, including the data disclosure and methodologies used. This will make the system more open and accountable. In addition, procedural fairness is another area of concern due to the onus of proof placed on foreign exporters to disprove allegations of dumping. It is suggested that all stakeholders should have equal opportunity to present their case and evidence. Moreover, imposing anti-dumping duties sometimes creates consequences in trade relations between countries. Foreign exporters may perceive duties as a barrier to trade and an unfair restriction on their access to the Indian market. This can lead to trade tensions and strained relations between the countries involved. Addressing these challenges and criticisms requires a comprehensive review of the anti-dumping duty regime in India. Additionally, actively engaging with affected countries and stakeholders to address concerns and find mutually beneficial solutions can help mitigate trade tensions and foster positive trade relations.

CONCLUSION

Due to the tussle between dumping and anti-dumping issues, consumers are becoming ultimate victims. Therefore, reform is needed to ensure that all the countries participating in foreign trade behave responsibly and moderately to maintain healthy competition. The governments should refrain from misusing the laws to protect domestic industries from import competition. Also, anti-dumping measures should allow to be imposed only with a genuine purpose in mind. Taking all these measures effectively will have a significant contribution to the overall growth and development of the Indian economy, ensuring a level playing field for both; domestic as well as foreign participants.

Author(s) Name: Neha Katariya (Gujarat National Law University, Gandhinagar)

References:

[1] General Agreement on Tariffs and Trade 1947, art VI

[2] Manish Parmar, ‘Anti-Dumping Duty in India – A Primer’ (Aureus Law Partners) <https://aureuslaw.com/anti-dumping-duty-in-india-a-primer/> accessed 03 July 2023

[3] Customs Tariff Act 1975

[4] Anti-Dumping Rules 1995

[5] Nishtha Pandey, ‘India imposes anti-dumping duty on stainless steel tube imports from China’ (CNBC TV 18, 21 December 2022) <https://www.cnbctv18.com/business/companies/govt-imposes-anti-dumping-duty-on-stainless-steel-tube-imports-from-china-15470291.htm> accessed 05 July 2023

[6] ‘Anti-Dumping Laws and Regulations in India’ (B&B Associates, 19 August 2020) <https://bnblegal.com/article/anti-dumping-laws-and-regulations-in-india/> accessed on 06 July 2023

[7] V. Venkatesan, ‘SC Directs Govt to Impose Anti-Dumping Duty on Imports of Low Density Polyethylene’ (The Wire, 15 April 2023) <https://thewire.in/law/sc-anti-dumping-duty-ldpe> accessed 03 July 2023

[8] Haridas Exports v All India Float Glass Manufacturers Association App (C) 2330/2000

[9] Jindal Poly Film Ltd. v Designated Authority & Anr (2018) 362 ELT 994 (Del)