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Anti-dumping Probe:A Case Study in Steel
Countries across the world are resorting to dumping of steel, reflecting the malaise gripping the industry. This has resulted in a spate of anti-dumping investigations and imposition of dumping duties. India is not an exception to this phenomenon. While the country has set up investigations into allegations of dumping, especially by the CIS nations, Indian steel itself is the subject of probes and dumping duties by several countries. Here we discuss one such investigation conducted by India.
The process of globalisation has culminated in the establishment of a new multilateral trade order under the WTO whose cornerstone is the removal of quantitative restrictions on imports and lowering of tariff barriers. At the same time, the need to protect the domestic industry from unfair trade practices has become an important area of concern. The guidelines prescribed under Article VI of the WTO Agreement for imposition of anti-dumping duties and countervailing duties are a safety net for sheltering domestic industry. The US and the European Union have been the most active users of anti-dumping laws. Of late, the number of countries that use trade laws has increased substantially, India being one of them. In India, a Directorate of Anti-Dumping and Allied Duties (DGAD) has been set up under the department of commerce, ministry of commerce and industry. When DGAD receives petitions from domestic industry alleging dumping by exporters, investigations are conducted to establish such dumping as well as the existence of injury to domestic industry, and establish a causal link between dumping and injury to domestic industry. The anti-dumping duty imposed under the act will be effective for five years from the date of imposition, unless revoked earlier. The designated authority initiates action once the domestic industry files a fully documented petition, or it may even initiate suo moto investigations. The causal link between dumping and injury is determined by the reduction in the market share of domestic producers and significant undercutting in price by exporters, resulting in depressing domestic prices or even prevent the price increase that would have occurred otherwise. The DGAD publishes the results of its investigation through a gazette notification.
The Case of Hot-Rolled Products
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