With the liberalization of the Indian economy in the early nineties and coming into existence of WTO our domestic sector has been exposed to a reality hitherto unknown to it. And dumping by foreign manufacturing entities of their products into our markets has added to the worries of the domestic industries.


What is meant by “dumping”? It basically an act of export of goods at prices which is substantially below the prices which are prevalent in the domestic market and not sufficient to cover the cost of production. Many in the industries circles harboured and expressed apprehension with advent of WTO regime that dumping may be resorted to by many countries especially China which has built huge manufacturing bases, to flood our markets causing serious injuries to our economic interests.


As it can be observed that dumping aims at capturing markets in a manner which is not fair. But how does it help a foreign exporter selling goods at price which does not absorb the cost of production? A manufacturing exporter whose products enjoy a strong demand in his domestic market, can set off his losses arising out of his dumping products into the foreign market. But then why should he engage himself in a losing proposition! The answer is simple. He builds up his overseas market in the hope of raising the price to the sustainable level once he succeeds in establishing in big way in these markets


Do we have any mechanism to prevent dumping? .Under the new dispensation of WTO regime member countries have been given the right to make suitable legislation in this regard and India being a member of WTO has taken advantage of this right. Indian laws were amended to bring them in line with anti-dumping provisions of the WTO agreement. For example, Sections 9A and 9B of the Customs Tariff Act empower conduct of anti-dumping duty investigation which is done before imposition of anti-dumping duty. There are several such investigations like the one concerning imports of of Penicillin-G from China and imports of Nylon Filament Yarn from China, Chinese Taipei, Malaysia, Indonesia, Thailand and Korea R.P.  

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