"If the other fellow sells cheaper than you, it is called dumping. 'Course,
if you sell cheaper than him, that's mass production."-Will Rogers
Dumping is a type of unfair pricing under trade law, particularly when it comes
to international trade. It happens when producers export a good to another
nation for less than the going market rate, which has a negative impact. Dumping
aims to grow market share in a foreign market by eliminating competition and
establishing a monopoly where the exporter may unilaterally set the product's
price and quality. Mechanisms to address dumping issues, such as countervailing
duty fines and anti-dumping laws, could be incorporated into trade treaties.
It is referred to as an anti-dumping duty when a domestic government imposes a
protectionist tax on imports that it determines are being sold for less than
their fair market worth. In order to protect their own economies, several
countries impose tariffs on items they believe are being dumped on their
domestic market, on the justification that doing so might harm domestic
industries and the local economy.
Thus, it is clear that dumping is an example of unfair competition as goods are
being offered for less than what they actually cost. It is extremely challenging
for Indian businesses to compete with this, and in the worst circumstances, it
might result in businesses collapsing and employees losing their jobs, a
particularly daunting scenario especially in a developing country like India. To
prevent the exploitation of local products in the importing nation and to
guarantee that they have an equal chance of succeeding as the importer's
products do, anti-dumping rules are essential for the expanding global market.
In order to protect our economy in this highly globalized world, the Customs
Tariff Act of 1975 and the Customs Tariff (Identification, Assessment and
Collection of Countervailing Duty On Subsidized Articles And For Determination
of Injury) Rules of 1995 are the Indian laws that regulate dumping and establish
procedures for anti-dumping duties. All potential anti-dumping charges are
investigated by the Directorate General of Anti-dumping and Allied Duties (DGAD).
On the other hand, in the EU, the main anti-dumping legislation is the
REGULATION (EU) 2016/1036 Of The European Parliament And Of The Council on
protection against dumped imports from countries not members of the European
Dumping is attracting increasing interest due to its detrimental effects to
countries in the highly globalized world of the 21st century. The next decade is
likely to witness a considerable rise in the phenomenon, especially with China
taking the centre stage in the world economy. Few researchers have addressed the
problems with regards to the effectiveness of Indian anti-dumping law. This
paper examines and compares the Indian and European anti-dumping laws with the
aim of seeing how Indian laws and the legal situation prevailing can improve.
The aim of my research was also to further broaden current knowledge of both
laws to the common man.
A Comparison Of Aspects
*For The Sake Of Brevity And Less Plagiarism, I Have Simply Referred To The
Section By Name And Not But The Entire Bare Act Section. Kindly Refer To The
Bare Act For Full Context!
Determination Of Injury, Assessment and Collection of Anti Dumping
Duty on Dumped Articles and for Determination of Injury)Rules, 1995:
11. Determination of injury.
In the Regulation (EU) 2016/1036 Of The European Parliament And Of The
- In the case of imports from specified countries, the designated authority
shall record a further finding that import of such article into India causes
or threatens material injury to any established industry in India or
materially retards the establishment of any industry in India.
- The designated authority shall determine the injury to domestic
industry, threat of injury to domestic industry, material retardation to
establishment of domestic industry and a causal link between dumped imports
and injury, taking into account all relevant facts, including the volume of
dumped imports, their effect on price in the domestic market for like
articles and the consequent effect of such imports on domestic producers of
such articles and in accordance with the principles set out in Annexure II
to these rules.
- The designated authority may, in exceptional cases, give a finding as to
the existence of injury even where a substantial portion of the domestic
industry is not injured, if:
- there is a concentration of dumped imports into an isolated market, and
- the dumped articles are causing injury to the producers of all or almost
all of the production within such market.
Article 3- Determination of injury
The Comparative Analysis:
- Pursuant to this Regulation, the term 'injury' shall, unless otherwise
specified, be taken to mean material injury to the Union industry, threat of
material injury to the Union industry or material retardation of the
establishment of such an industry and shall be interpreted in accordance
with the provisions of this Article.
- A determination of injury shall be based on positive evidence and shall
involve an objective examination of: (a) the volume of the dumped imports
and the effect of the dumped imports on prices in the Union market for like
products; and (b) the consequent impact of those imports on the Union
- With regard to the volume of the dumped imports, consideration shall be
given to whether there has been a significant increase in dumped imports,
either in absolute terms or relative to production or consumption in the
Union. With regard to the effect of the dumped imports on prices,
consideration shall be given to whether there has been significant price
undercutting by the dumped imports as compared with the price of a like
product of the Union industry, or whether the effect of such imports is
otherwise to depress prices to a significant degree or prevent price
increases, which would otherwise have occurred, to a significant degree. No
one or more of those factors can necessarily give decisive guidance.
- Where imports of a product from more than one country are simultaneously
subject to anti-dumping investigations, the effects of such imports shall be
cumulatively assessed only if it is determined that: (a) the margin of
dumping established in relation to the imports from each country is more
than de minimis as defined in Article 9(3) and the volume of imports from
each country is not negligible; and (b) a cumulative assessment of the
effects of the imports is appropriate in the light of the conditions of
competition between imported products and the conditions of competition
between the imported products and the like Union product.
- The examination of the impact of the dumped imports on the Union
industry concerned shall include an evaluation of all relevant economic
factors and indices having a bearing on the state of the industry, including
the fact that an industry is still in the process of recovering from the
effects of past dumping or subsidisation; the magnitude of the actual margin of dumping; actual
and potential decline in sales, profits, output, market share, productivity,
return on investments and utilisation of capacity; factors affecting Union
prices; actual and potential negative effects on cash flow, inventories,
employment, wages, growth, ability to raise capital or investments. This list is
not exhaustive, nor can any one or more of these factors necessarily give
decisive guidance. 30.6.2016 EN Official Journal of the European Union L 176/29
- It must be demonstrated, from all the relevant evidence presented in
relation to paragraph 2, that the dumped imports are causing injury within
the meaning of this Regulation. Specifically, that shall entail
demonstrating that the volume and/or price levels identified pursuant to
paragraph 3 are responsible for an impact on the Union industry as provided
for in paragraph 5, and that that impact exists to a degree which enables it
to be classified as material.
- Known factors, other than the dumped imports, which at the same time are
injuring the Union industry shall also be examined to ensure that the injury
caused by those other factors is not attributed to the dumped imports under
paragraph 6. Factors which may be considered in that respect shall include:
the volume and prices of imports not sold at dumping prices; contraction in
demand or changes in the patterns of consumption; restrictive trade
practices of, and competition between, third country and Union producers;
developments in technology and the export performance; and productivity of
the Union industry.
- The effect of the dumped imports shall be assessed in relation to the
production of the Union industry of the like product when available data
permit the separate identification of that production on the basis of
criteria such as the production process, producers' sales and profits. If
such separate identification of that production is not possible, the effects
of the dumped imports shall be assessed by examination of the production of
the narrowest group or range of products, which includes the like product,
for which the necessary information can be provided.
- A determination of a threat of material injury shall be based on facts
and not merely on an allegation, conjecture or remote possibility. The
change in circumstances which would create a situation in which the dumping
would cause injury must have been clearly foreseen and must be imminent. In
making a determination regarding the existence of a threat of material
injury, consideration should be given to factors such as: (a) a significant
rate of increase of dumped imports into the Union market indicating the
likelihood of substantially increased imports; (b) whether there is
sufficient freely disposable capacity on the part of the exporter or an
imminent and substantial increase in such capacity indicating the likelihood
of substantially increased dumped exports to the Union, account being taken
of the availability of other export markets to absorb any additional
exports; (c) whether imports are entering at prices that would, to a
significant degree, depress prices or prevent price increases which
otherwise would have occurred, and would probably increase demand for
further imports; (d) inventories of the product being investigated. No one
of the factors listed above by itself can necessarily give decisive
guidance, but the totality of the factors considered shall be such as to
lead to the conclusion that further dumped exports are imminent and that,
unless protective action is taken, material injury will occur.
There are many aspects by which the EU law is better than the Indian law:
- There is a clearer definition of "material injury" in EU law, which makes it
impossible to misunderstand. On the other hand, the Indian law does not say
anything about it. This is a hole that needs to be filled.
- In EU law, there is a unique idea called "cumulative assessment," which
means that anti-dumping investigations can be done on imports of a product from
more than one country at the same time. This makes anti-dumping investigations
more thorough and, in the long run, makes trade go more smoothly. In India, this
idea doesn't exist.
- EU law goes into more detail about how the effect of dumping on Union
industries is looked at. In EU law, there is a very detailed concept about the
effects of dumping that includes an evaluation of all relevant economic factors
and indices that affect the industry's current state. This includes the fact
that an industry is still healing from the effects of dumping or subsidisation
that happened in the past, the size of the actual margin of dumping, and the
actual and potential decline in sales, profits, output, market share, and
productivity. This gives a clear picture of the whole situation and makes it
easier to find a solution. This is not part of Indian law, which slows the
country down in the short term.
- According to EU law, known factors other than dumping that hurt the Union
industry at the same time must also be looked at to make sure that the damage
caused by these other factors is not blamed on the dumping. This idea is unique
because it gives foreign exporters another way to defend themselves in an
anti-dumping case. This gives everyone involved a new perspective and more
freedom. Perspective lets us see things from different angles and consider the
thoughts, experiences, and points of view of other people. This helps us
understand and understand others better. It lessens prejudice, judgement, and
- EU law stipulates a threat of material injury must be based on facts, not
just on an allegation, a guess, or a small chance of happening. The change in
circumstances that would make it likely that the dumping would hurt someone must
have been obvious and close at hand. This is a great clause because it makes it
less likely that someone will make a complaint for no reason. This saves time
for the government and lets them deal with much more important things. This
clause isn't in Indian law, which makes it easy to break, as we'll see later.
Determination Of Dumping
In the Customs Tariff (Identification, Assessment and Collection of Anti Dumping
Duty on Dumped Articles and for Determination of Injury)Rules, 1995:
10. Determination of normal value, export price and margin of dumping.-
10. Determination of normal value, export price and margin of dumping.- An
article shall be considered as being dumped if it is exported from a country or
territory to India at a price less than its normal value and in such
circumstances the designated authority shall determine the normal value, export
price and the margin of dumping
In The Regulation (Eu) 2016/1036 Of The European Parliament And Of The
Article 2- Determination of dumping
- Normal Value
- The normal value shall normally be based on the prices paid or payable, in
the ordinary course of trade, by independent customers in the exporting
country. However, where the exporter in the exporting country does not
produce or does not sell the like product, the normal value may be
established on the basis of prices of other sellers or producers.
Prices between parties which appear to be associated or to have a compensatory
arrangement with each other may not be considered to be in the ordinary course
of trade and may not be used to establish the normal value unless it is
determined that they are unaffected by the relationship. In order to determine
whether two parties are associated, account may be taken of the definition of
related parties set out in Article 127 of Commission Implementing Regulation (EU)
2015/2447 ( 1 ).
- Sales of the like product intended for domestic consumption shall
normally be used to determine the normal value if such sales volume
constitutes 5 % or more of the sales volume of the product under
consideration to the Union. However, a lower volume of sales may be used
when, for example, the prices charged are considered representative for the
- When there are no or insufficient sales of the like product in the
ordinary course of trade, or where, because of the particular market
situation, such sales do not permit a proper comparison, the normal value of
the like product shall be calculated on the basis of the cost of production
in the country of origin plus a reasonable amount for selling, general and
administrative costs and for profits, or on the basis of the export prices,
in the ordinary course of trade, to an appropriate third country, provided
that those prices are representative. A particular market situation for the
product concerned within the meaning of the first subparagraph may be deemed
to exist, inter alia, when
prices are artificially low, when there is significant barter trade, or when
there are non-commercial processing arrangements.
- Sales of the like product in the domestic market of the exporting
country, or export sales to a third country, at prices below unit production
costs (fixed and variable) plus selling, general and administrative costs
may be treated as not being in the ordinary course of trade by reason of
price, and may be disregarded in determining the normal value, only if it is
determined that such sales are made within an extended period in substantial
quantities, and are at prices which do not provide for the recovery of all
costs within a reasonable period of time. If prices which are below costs at
the time of sale are above weighted average costs for the period of
investigation, such prices shall be considered to provide for recovery of
costs within a reasonable period of time. The extended period of time shall
normally be one year but shall in no case be less than six months, and sales
below unit cost shall be considered to be made in substantial quantities
within such a period when it is established that the weighted average
selling price is below the weighted average unit cost, or that the volume of
sales below unit cost is not less than 20 % of sales being used to determine
- Costs shall normally be calculated on the basis of records kept by the
party under investigation, provided that such records are in accordance with
the generally accepted accounting principles of the country concerned and
that it is shown that the records reasonably reflect the costs associated
with the production and sale of the product under consideration. If costs
associated with the production and sale of the product under investigation
are not reasonably reflected in the records of the party concerned, they
shall be adjusted or established on the basis of the costs of other
producers or exporters in the same country or, where such information is not
available or cannot be used, on any other reasonable basis, including
information from other representative markets. Consideration shall be given
to evidence submitted on the proper allocation of costs, provided that it is
shown that such allocations have been historically utilised. In the absence of a more appropriate method, preference
shall be given to the allocation of costs on the basis of turnover. Unless
already reflected in the cost allocations under this subparagraph, costs shall
be adjusted appropriately for those non-recurring items of cost which benefit
future and/or current production.
Where the costs for part of the period for cost recovery are affected by the use
of new production facilities requiring substantial additional investment and by
low-capacity utilisation rates, which are the result of start-up operations
which take place within or during part of the investigation period, the average
costs for the start-up phase shall be those applicable, under the abovementioned
allocation rules, at the end of such a phase, and shall be included at that
level, for the period concerned, in the weighted average costs referred to in
the second subparagraph of paragraph 4. The length of a start-up phase shall be
determined in relation to the circumstances of the producer or exporter
concerned, but shall not exceed an appropriate initial portion of the period for
cost recovery. For this adjustment to costs applicable during the investigation
period, information relating to a start-up phase which extends beyond that
period shall be taken into account where it is submitted prior to verification
visits and within three months of the initiation of the investigation.
- The amounts for selling, for general and administrative costs and for
profits shall be based on actual data pertaining to production and sales, in
the ordinary course of trade, of the like product by the exporter or
producer under investigation. When such amounts cannot be determined on that
basis, the amounts may be determined on the basis of: (a) the weighted
average of the actual amounts determined for other exporters or producers
subject to investigation in respect of production and sales of the like
product in the domestic market of the country of origin; (b) the actual
amounts applicable to production and sales, in the ordinary course of trade,
of the same general category of products for the exporter or producer in
question in the domestic market of the country of origin; (c) any other
reasonable method, provided that the amount for profit so established shall
not exceed the profit normally realised by other exporters
or producers on sales of products of the same general category in the domestic
market of the country of origin.
- (a) In the case of imports from non-market-economy countries ( 1 ), the
normal value shall be determined on the basis of the price or constructed
value in a market economy third country, or the price from such a third
country to other countries, including the Union, or, where those are not
possible, on any other reasonable basis, including the price actually paid
or payable in the Union for the like product, duly adjusted if necessary to
include a reasonable profit margin. An appropriate market-economy third
country shall be selected in a not unreasonable manner, due account being
taken of any reliable information made available at the time of selection.
Account shall also be taken of time limits. Where appropriate, a
market-economy third country which is subject to the same investigation
shall be used. The parties to the investigation shall be informed shortly
after its initiation of the market-economy third country envisaged and shall
be given 10 days to comment. (b) In anti-dumping investigations concerning
imports from the People's Republic of China, Vietnam and Kazakhstan and any
non-market-economy country which is a member of the WTO
at the date of the initiation of the investigation, the normal value shall be
determined in accordance with paragraphs 1 to 6, if it is shown, on the basis of
properly substantiated claims by one or more producers subject to the
investigation and in accordance with the criteria and procedures set out in
point (c), that market-economy conditions prevail for this producer or producers
in respect of the manufacture and sale of the like product concerned. When that
is not the case, the rules set out under point (a) shall apply. (c) A claim
under point (b) must be made in writing and contain sufficient evidence that the
producer operates under market-economy conditions, that is if: - decisions of
firms regarding prices, costs and inputs, including for instance raw materials,
cost of technology and labour, output, sales and investment, are made in
response to market signals reflecting supply and demand, and without significant
State interference in that regard, and costs of major inputs substantially
reflect market values, - firms have one clear set of basic accounting records
which are independently audited in line with international accounting standards
and are applied for all purposes,
- the production costs and financial situation of firms are not subject to
significant distortions carried over from the former non-market-economy system,
in particular in relation to depreciation of assets, other writeoffs, barter
trade and payment via compensation of debts, - the firms concerned are subject
to bankruptcy and property laws which guarantee legal certainty and stability
for the operation of firms, and - exchange rate conversions are carried out at
the market rate. A determination whether the producer meets the criteria
referred to under this point shall normally be made within seven months of, but
in any event not later than eight months after, the initiation of the
investigation, after the Union industry has been given an opportunity to
comment. That determination shall remain in force throughout the investigation.
The Commission shall provide information to the Member States concerning its
analysis of claims made pursuant to point (b) normally within 28 weeks of the
initiation of the investigation. (d) When the Commission has limited its
investigation in accordance with Article 17, a determination pursuant to points
(b) and (c) of this paragraph shall be limited to the parties included in the
investigation and any producer that receives individual treatment pursuant to
- Export Price
8. The export price shall be the price actually paid or payable for the product
when sold for export from the exporting country to the Union.
9. In cases where there is no export price or where it appears that the export
price is unreliable because of an association or a compensatory arrangement
between the exporter and the importer or a third party, the export price may be
constructed on the basis of the price at which the imported products are first
resold to an independent buyer, or, if the products are not resold to an
independent buyer or are not resold in the condition in which they were
imported, on any reasonable basis. In those cases, adjustment for all costs,
including duties and taxes, incurred between the importation and resale, and for
profits accruing, shall be made so as to establish a reliable export price, at
the Union frontier level. The items for which adjustment shall be made shall
include those normally borne by an importer but paid by any party, either inside
or outside the Union, which appears to be associated or to have a compensatory
arrangement with the importer or exporter, including usual transport, insurance,
handling, loading and ancillary costs, customs duties, any anti-dumping duties,
and other taxes payable in the importing country by reason of the importation or
sale of the goods, and a reasonable margin for selling, general and
administrative costs and profit.
10. A fair comparison shall be made between the export price and the normal
value. This comparison shall be made at the same level of trade and in respect
of sales made at, as closely as possible, the same time and with due account
taken of other differences which affect price comparability. Where the normal
value and the export price as established are not on such a comparable basis,
due allowance, in the form of adjustments, shall be made in each case, on its
merits, for differences in factors which are claimed, and demonstrated, to
affect prices and price comparability. Any duplication when making adjustments
shall be avoided, in particular in relation to discounts, rebates, quantities
and level of trade. When the specified conditions are met, the factors for which
adjustment can be made are listed as follows:
- Physical characteristics An adjustment shall be made for differences in
the physical characteristics of the product concerned. The amount of the
adjustment shall correspond to a reasonable estimate of the market value of
- Import charges and indirect taxes An adjustment shall be made to the
normal value for an amount corresponding to any import charges or indirect
taxes borne by the like product and by materials physically incorporated
therein, when intended for consumption in the exporting country and not
collected or refunded in respect of the product exported to the Union.
- Discounts, rebates and quantities An adjustment shall be made for
differences in discounts and rebates, including those given for differences
in quantities, if those are properly quantified and are directly linked to
the sales under consideration. An adjustment may also be made for deferred
discounts and rebates if the claim is based on consistent practice in prior
periods, including compliance with the conditions required to qualify for
the discount or rebates.
- Level of trade (i) An adjustment for differences in levels of trade,
including any differences which may arise in OEM (original equipment
manufacturer) sales, shall be made where, in relation to the distribution chain
in both markets, it is shown that the export price, including a constructed
export price, is at a different level of trade from the normal value and the
difference has affected price comparability, which is demonstrated by consistent
and distinct differences in functions and prices of the seller for the different
levels of trade in the domestic market of the exporting country. The amount of
the adjustment shall be based on the market value of the difference. (ii)
However, in circumstances not envisaged under point (i), when an existing
difference in level of trade cannot be quantified because of the absence of the
relevant levels on the domestic market of the exporting countries, or where
certain functions are shown clearly to relate to levels of trade other than the
one which is to be used in the comparison, a special adjustment may be granted.
- Transport, insurance, handling, loading and ancillary costs An
adjustment shall be made for differences in the directly related costs
incurred for conveying the product concerned from the premises of the
exporter to an independent buyer, where such costs are included in the
prices charged. Those costs shall include transport, insurance, handling,
loading and ancillary costs.
- Packing An adjustment shall be made for differences in the directly
related packing costs for the product concerned.
- Credit An adjustment shall be made for differences in the cost of any
credit granted for the sales under consideration, provided that it is a
factor taken into account in the determination of the prices charged.
- After-sales costs An adjustment shall be made for differences in the
direct costs of providing warranties, guarantees, technical assistance and
services, as provided for by law and/or in the sales contract.
- Commissions An adjustment shall be made for differences in commissions
paid in respect of the sales under consideration. The term 'commissions'
shall be understood to include the mark-up received by a trader of the
product or the like product if the functions of such a trader are similar to
those of an agent working on a commission basis.
- Currency conversions When the price comparison requires a conversion of
currencies, such conversion shall be made using the rate of exchange on the
date of sale, except that, when a sale of foreign currency on forward
markets is directly linked to the export sale involved, the rate of exchange
in the forward sale shall be used. Normally, the date of sale shall be the
date of invoice but the date of contract, purchase order or order
confirmation may be used if those more appropriately establish the material
terms of sale. Fluctuations in exchange rates shall be ignored and exporters
shall be granted 60 days to reflect a sustained movement in exchange rates
during the investigation period.
- Other factors An adjustment may also be made for differences in other
factors not provided for under points (a) to (j), if it is demonstrated that
they affect price comparability as required under this paragraph, in
particular if customers consistently pay different prices on the domestic
market because of the difference in such factors.
Subject to the relevant provisions governing fair comparison, the existence
of margins of dumping during the investigation period shall normally be
established on the basis of a comparison of a weighted average normal value
with a weighted average of prices of all export transactions to the Union,
or by a comparison of individual normal values and individual export prices
to the Union on a transaction-to-transaction basis. However, a normal value
established on a weighted average basis may be compared to prices of all
individual export transactions to the Union, if there is a significant
difference in the pattern of export prices among different purchasers,
regions or time periods, and if the methods specified in the first sentence
of this paragraph would not reflect the full degree of dumping being practised. This paragraph shall not preclude the
use of sampling in accordance with Article 17.
12. The dumping margin shall be the amount by which the normal value exceeds the
export price. Where dumping margins vary, a weighted average dumping margin may
The Comparative Analysis:
Here, upon viewing both sections for the first time, the difference is blatantly
clear. The Indian section is miniscule and simplistic compared to the EU one in
the following ways:
- The EU legislation is far more specific in defining normal pricing, leaving
no opportunity for misunderstanding. According to EU anti-dumping rules, normal
value-which is the comparable price of the products when sold in the usual
course of business in the exporting nation-determines normal pricing. The
constructed value of the items or the corresponding price of the product when
sold in the exporting country's or a third country's customary course of
business are both considered to be normal value under the EU Anti-Dumping
Regulation. The built-in value of the item, a similar price in the exporting
country, a comparable price in a third country, or both are utilised to
determine the normal value. The EU regulation also specifies different methods
for determining normal value in particular situations, such as when the market
in the exporting country is unbalanced or when there is a lack of pertinent and
The EU compares the price of the product in the exporting nation to the price of
the product when sold in the EU when determining the normal value using the
comparable price in the exporting country. The EU compares the price of the
product in a third nation to the price of the product when sold in the EU when
determining the normal value using the comparable price in a third country.The
EU determines the normal value by adding to the cost of production a suitable
sum for administrative, selling, and general costs, as well as for profits, when
the normal value is established using the constructed value of the product.
However, It's crucial to understand that the EU reviews and verifies each
case-by-case determination of normal value.
Thus we can see that the Indian law merely mentions normal price without
defining it. This creates a lacuna in interpretation.
- In terms of determining export price the EU law is far more detailed, leaving
no room for misinterpretation. According to the EU Anti-Dumping Regulation, the
export price is the price at which the exporter or a related party first sells
the goods to an independent buyer in the EU or for export to the EU. When the
export price is contrasted with the typical value of the commodity, it can be
used to determine if dumping has taken place. Anti-dumping duties may apply if
the export price is below the normal value and is deemed to constitute dumping.
Depending on the situation, the EU employs several techniques to estimate the
export price. These techniques consist of:
It's vital to remember that the EU reviews and verifies export prices on an
individual basis and in each situation. EU may further assess the validity of
the export price by contrasting it with the costs of comparable goods offered in
the exporting nation or in other nations.
- the cost at which the exporter or a connected party initially sells the
goods for export to the EU.
- the cost at which the product is initially offered to a private buyer in
- the cost at which the product is initially offered to a private buyer in
- The built export price is established by adding to the cost of
production an appropriate sum for selling, general, and administrative
expenses as well as for profits.
- the cost at which the product is initially offered to a private buyer in
the exporting nation.
- the price that the product is initially offered for sale to a private
buyer in a third nation.
Thus we can see that the Indian law merely mentions export price without
defining it. This also creates a lacuna in interpretation.
- In terms of comparison the EU law is far more detailed, leaving no room for
misinterpretation. In the EU law, The export price and the normal value must be
fairly compared. This comparison must be done on an equal footing with other
businesses, with sales that occurred as nearly simultaneously as feasible, and
with proper consideration for any other factors that may impact price
comparability. Where the normal value and the export price as established are
not on such a comparable basis, due allowance, in the form of adjustments, shall
be made in each case, on the basis of its own merits, for differences in factors
that are claimed to affect prices and price comparability and which are
demonstrated to do so. It is important to prevent duplication while making
modifications, especially when it comes to discounts, rebates, quantities, and
trade volume. Physical qualities, import fees and indirect taxes,
transportation, insurance, handling, loading, and auxiliary costs, among other
things, are among the variables for which adjustments may be made when the
required circumstances are satisfied. Thus we can see that the Indian law merely
mentions comparison without defining it. This also creates a lacuna in
interpretation. This is particularly worrying as this is among the final steps
for determining dumping.
- The EU regulation is far more specific when it comes to figuring out the
dumping margin, therefore there is no opportunity for misunderstanding.
According to EU law, a weighted average normal value and a weighted average of
prices for all export transactions to the Union, or a comparison of individual
normal values and individual export prices to the Union on a
transaction-by-transaction basis, will be used to determine whether there were
margins of dumping during the investigation period. So, we can see that a
predetermined method of computation is provided. But under Indian law, the
phrase "margin of dumping" is used without any more explanation. Concerning the
law, this is unacceptable.
After viewing all of this, I contend that the Indian law has to be much more
particular and well-written because, in my opinion, laws need to be more
specific and thorough for a number of reasons.
- Clarity: Exact and explicit rules give clear instructions on what is
permitted and what is banned, making it simpler for people and organisations to comprehend
and abide by the law.
- Fairness: Detailed and precise legislation can aid in ensuring that the
law is administered consistently and fairly, since they offer precise
standards for judgement and lessen the possibility of prejudice or discretion.
- Predictability: Detailed and precise rules can contribute to the
creation of a predictable legal environment, which can promote investment
and economic growth as people and companies are better equipped to foresee
the risks and expenses of legal action.
- Compliance: Comprehensive and precise rules might promote greater
observance of the law since they clearly define expectations and make it
simpler to identify and punish lawbreakers.
- Effective enforcement: Laws that are explicit and in-depth can aid in
the efficient application of the rule of law because they establish clear
standards for decision-making and lessen the possibility of prejudice or
discretion in enforcement activities.
D. Initiation Of Proceedings
In the Customs Tariff (Identification, Assessment and Collection of Anti Dumping
Duty on Dumped Articles and for Determination of Injury) Rules, 1995:
5. Initiation of investigation:
In The Regulation (Eu) 2016/1036 Of The European Parliament And Of The
Article 5- Initiation of proceedings
The Comparative Analysis:
Now the comparative analysis will be different. Since both laws are similar, the
comparison with regards to ground reality.
Both regulations have a comparable requirement that businesses must meet in
terms of percentages in order to be eligible to start an inquiry. i.e. The
complaint shall be deemed to have been made by, or on behalf of, the entire
industry if it is backed by those producers whose aggregate output represents
more than 50% of the total production of the like product produced by that
portion of the Union industry professing either support for or opposition to the
complaint. However, if manufacturers explicitly supporting the application
account for less than 25% of the industry's total output of the same commodity,
no inquiry shall be launched.
This creates a problem. You see, there are far more monopolies in India than in
Europe due to the weakness of anti-competition laws. For example, here are some
companies and their market share in India:
Monopoly Stocks in India #1 � IRCTC � 100%
Monopoly Stocks in India #2 � HAL � 100%
Monopoly Stocks in India #3 � Nestle � Cerelac � 96.5%
Monopoly Stocks in India #4 � Coal India � 82%
Monopoly Stocks in India #5 � Hindustan zinc � 78%
Monopoly Stocks in India #6 � ITC� 77%
Monopoly Stocks in India #7 � Marico � Oil Products � 73%
Monopoly Stocks in India #8 � Pidilite � 70%
Monopoly Stocks in India #9 � CONCOR � 68.52%
Monopoly Stocks in India #10 � BHEL
In India there are more companies having a monopoly share of market as compared
to EU. There are several reasons why there may be more monopolies in India
compared to the European Union (EU), including
- Size of the market: India has a population of more than 1.3 billion,
whilst the EU has a population of just over 447 million. It may be simpler for a
business to gain dominance and establish a monopoly if the market is bigger.
- Absence of a comprehensive competition law to protect monopolies and
encourage fair competition: Up until recently, India lacked a competition
law. Only in 2003 was the Competition Act, 2002, passed, creating the
Competition Commission of India. The Treaty of Rome, which created the
European Economic Community and its competition laws in 1957, contrasts this
with the lengthy history of competition law in the EU.
- Government policies: In rare instances, Indian government policies may
unintentionally result in the formation of monopolies. For instance, laws
may favour seasoned players over newcomers, or a government-owned company may
dominate a certain sector.
- Infrastructure issues: India has had issues with its infrastructure,
including insufficient electricity and transportation networks, which may
make it difficult for new competitors to join the market and threaten
The most often employed kind of trade protection is now antidumping duties.
Abuse of antidumping laws can shield domestic businesses against unfair
international importers who are more effective. Firstly, This means that big
companies tend to disrupt trade for their own benefits and make complaints, at
expense of rest of industry. They qualify as they have the necessary market
share. Second, large corporations that control a sizable portion of the market
for a specific product and have significant political clout inside the
government often abuse anti-dumping laws.
Antidumping duties can, in theory, only be imposed when a foreign trading
partner charges less overseas than in its home market. This is thought to be a
form of "unfair" dumping that requires regulation. In contrast, it is difficult
for the present antidumping regulations to discern between "fair" and "unfair"
trade. Prices are inevitably lower when overseas companies create items more
affordably, particularly when they export to a sizable market like India where
they are probably going to encounter more competition than in their own home
markets. What can seem to be unfair commerce may really be a sign of comparative
advantage present in foreign companies. One cannot rule out the possibility that
antidumping protection might be "misused" to shield less efficient domestic
businesses from "fair" foreign importers due to the blurry line between "fair"
and "unfair" trade.
Few businesses control a sizable portion of the market, as was already said.
What then happens to the remaining businesses in the industry. The majority of
the burden is placed on small businesses. Currently, the majority of nations
implement anti-dumping taxes even when doing so would be detrimental to the
industry as a whole. And when we consider a nation like India, which has a
sizable proportion of unorganised sector enterprises, it becomes challenging for
the remaining businesses to unite and establish a group that can present their
viewpoints at DGAD.
Therefore, I advocate for tougher antitrust regulations. Antitrust laws preserve
competition. Customers benefit from free and open competition because it
guarantees lower prices and the launch of new, superior products. In a market
with plenty of rivalry, competing businesses often try to attract clients by
decreasing their costs while improving the quality of their products or
Through competition and the economic possibilities it offers,
businesses are driven to develop new, creative, and more efficient methods of
manufacturing things. Competition helps customers in two ways: lower prices and
better products and services. Businesses run the danger of slipping behind the
competitors in the market if they don't anticipate or address client needs.
However, when opposing domestic monopolies agree to participate in unethical practises like violating anti-dumping laws, consumers lose out on the benefits
of competition. As a result, the Indian economy suffers, as do Indian taxpayers
Thus we need to democratize and level the playing field when it comes to
initiation of proceedings with regards to anti dumping. Small producers play a
part in our economy too and deserve to have their voices heard. Or else, a
situation will be created wherein a few monopolies control the entire domestic
D. Understaffed Authority
To end this paper, I would like to point out yet another crucial aspect which
sheds light on the reality of the situation.
To date, according to the official DGTR website, there are 118 active ongoing
cases, the oldest being from
Determination Of Injury
are employed only 22
officers in the whole department.
There are a number of factors that might cause anti-dumping investigations in
India to be delayed.
According to me some explanations are:
- Lack of adequate evidence:
The Directorate General of Trade Remedies (DGTR) must have sufficient proof
of dumping before opening an anti-dumping inquiry. The study can take longer
if the allegation is not sufficiently supported by the available data.
- Information that is insufficient or inaccurate:
If the parties engaged in the inquiry do not offer comprehensive and correct
information, the investigation may be delayed since the DGTR may need to ask
for further details.
- Absence of personnel or resources:
The DGTR can be understaffed or lack the tools necessary to launch an
inquiry quickly. Delays in the investigating process may result from this.
- Delays brought on by bureaucracy:
India's anti-dumping inquiry procedure is renowned for being bureaucratic
and sluggish, with many layers of review and appeals.
- Political meddling:
On occasion, political meddling may result in delays in the anti-dumping
- Lack of international cooperation:
Delays may occur if the importer's country of origin does not cooperate with
Thus, while on paper it may seem that there is a set time limit according to
which the case should be complete, the reality is starkly different. The
existing legal framework stipulates that an investigation must be completed and
final findings submitted within a year of the day it was first launched. The
Central Government may choose to extend the aforementioned time frame by six
months. But we can still see cases from 2 decades ago pending. Thus, it is the
need of the hour to increase the staff in the DGTR, in order to make the process
Conclusion And Suggestions
In this paper, I compared 3 aspects; that is 2 sections and 2 situations based
on ground realities. As seen when compared with the EU, the Indian law, its
process and authority are severely lacking in their ability to deal with
This is a dangerous situation, especially in a highly globalized world.
Dumping can lead to:
Thus, In light of all the revelations, I suggest the following:
India may strengthen its anti-dumping regulations by doing a number of
- Harm to domestic industries:
Dumping may hurt domestic industries by oversaturating the market with cheap
items and making it challenging for domestic companies to compete. This may
result in the loss of jobs, the closing of domestic manufacturing, and a
decline in sales for domestic businesses.
- Trade imbalance:
Dumping may cause a trade imbalance by allowing foreign businesses to sell
their products for less than their fair market value. A trade imbalance and
a reduction in revenue for the domestic economy may arise from this.
- Loss of innovation:
Due to their inability to contend with the cheap costs of dumping, domestic
businesses may be less inclined to innovate and invest in research and
- Import dependency:
Dumping can result in a rise in import dependence and a decline in local
- Consumer harm:
In the near term, consumers could profit from the cheap cost of dumping
goods. Consumers may lose access to a wide variety of items in the long run
and may have to pay more for imported goods if domestic companies are unable
Dumping can lead to a distortion of the market by allowing foreign firms to
sell items at prices that do not accurately represent their real costs of
production, which is bad for fair competition.
- Loss of sovereignty:
Because domestic businesses are unable to compete and foreign firms may end
up dominating the market, dumping can result in a loss of sovereignty in
- Adopting a more reliable data analysis methods and improving
decision-making openness to strengthen its investigative process.
- Enhancing communication between the directorate general of trade
remedies (dgtr) and the department of commerce, ministry of commerce &
- Reviewing and upgrading its current anti-dumping legislation to bring
them into compliance with rules and procedures used in international
- Simplifying processes and cutting down on investigative time to improve
the efficacy and efficiency of its anti-dumping review process.
- Increasing the DGTR's staff, resources, and support will allow it to
undertake inquiries and reach conclusions quickly and effectively.
- Promoting more involvement in anti-dumping investigations from smaller
domestic companies and educating them on the procedure.
- Reducing the influence of big monopolies on the anti-dumping procedure
- http://www.bareactslive.com/ACA/ACT2197.HTM for annexure1