Govt now selective in levying dumping duty

NEW DELHI: For long, India was counted to be the top user of anti-dumping duty and often came under attack at the World Trade Organization (WTO). But for the last three years, the government has been very selective in imposing the duty even after the Directorate General of Trade Remedies (DGTR) investigations have established that the goods were being "dumped" into India.

By its very definition, dumping is established when the price in the importing country is lower than the origin and causes or threatens to cause injury to the domestic industry. Between 1991 and August 2020, DGTR, a quasi-judicial body, had recommended imposition of anti-dumping duty in 1,039 cases and it was accepted into all but seven cases, resulting in a rejection rate of 0.7%, data compiled by Centre for Digital Economy Policy Research showed.

But post-Covid, just when the government launched the Atmanirbhar Bharat campaign, this seems to have taken a drastic turn, with the finance ministry rejecting a significant chunk of the recommendations. Since August 2020, DGTR's "success rate" has dropped to 43% as only 61 of its 141 recommendations have been accepted, according to data accessed by TOI.

As has traditionally been the case, goods from China have been the biggest target of anti-dumping action. When it comes to the cases rejected by the revenue department, in over half - 43 of the 80 rejected cases - China was a subject country. The list included carbon black, caustic soda, flat rolled products of stainless steel, viscose spun yarn and polyester yarn.

There were 23 cases - 29% share of the rejected cases - where China was the sole country whose producers were dumping goods into India, including tyre, amoxycillin, melamine and nylon tyre cord fabric, among others.

So, why is the revenue department rejecting cases concerning Chinese producers, who are shipping goods that are causing damage to Indian industry, when one of the key themes is to prevent Indian industry from cheap imports from across the border?

The official argument is that dumping duty, where the main focus is on intermediaries and raw material, pushes up the cost of the finished product and the finance ministry and Niti Aayog do not support the action across the board. Industry players, however, point out that in a large number of cases dumping will eventually wipe out domestic players.