Anti-dumping Duty on Wheel Loaders
Source: ET
GS II: International Relation
Overview
- News in Brief
- What is Anti-dumping Duty?
Why in the News?
Directorate General of Trade Remedies (DGTR) has recommended anti-dumping duty of up to 82% on imports of ‘wheel loader’, a common use machinery in infrastructure and mining sectors, from China.
News in Brief
- The recommendation came after a year-long investigation into the complaints of injury by domestic manufacturers.
- Imports are coming at prices below the domestic sales price injuring domestic industry.
- Price undercutting of 40-50% which has resulted in negative growth in the industry on all parameters.
- Domestic industry produces loaders of up to 5583 kg capacity.
- Wheel loaders are used in mining, shipping, construction and whenever earth and other material has to be moved and loaded.
What is Anti-dumping Duty?
Anti-dumping duties are typically levied when a foreign company is selling an item significantly below the price at which it is being produced.
- This will be implemented to save domestic jobs but these tariffs can also lead to higher prices for domestic consumers.
- This will helps to reduce international competition.
World Trade Centre towards Anti-dumping Duty
- WTO does not intervene in the activities of companies engaged in dumping.
- WTO agreement permits governments to act against dumping if dumping affects internal economy of nations.
- Anti-dumping measures can only be applied if the dumping is hurting the industry in the importing country.
GATT (Article 6) allows countries to take action against dumping. It allows anti-dumping duties to be imposed on goods that are deemed to be dumped and causing injury to producers of competing products in the importing country. These duties are equal to the difference between the goods’ export price and their normal value, if dumping causes injury.
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