Anti-Dumping duty
Q. What is anti-dumping duty?- Published on 18 Apr 16a. Penalty imposed on importers for causing pollution
b. Tax exemption that helps exporters
c. Penalty imposed on imports for their low prices
d. Tax exemption that helps importers and SEZ businesses
ANSWER: Penalty imposed on imports for their low prices
- An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.
- Say a cup costs Rs. 10 in India. If other countries try selling the same quality cup at Rs. 2 in India, the domestic manufacturers would suffer.
- This is called ‘dumping’ by the foreign country.
- To avoid this, if India feels that the cup is being sold unjustly at a very low price than its normal value, it can impose anti-dumping duties.
- Sometimes, some countries price the products lower owing to tremendous increase in production and export them at very lower prices.
- The use of anti-dumping measure as an instrument of fair competition is permitted by the WTO. In fact, anti-dumping is an instrument for ensuring fair trade and is not a measure of protection per se for the domestic industry. It provides relief to the domestic industry against the injury caused by dumping.
