What is Anti-dumping duties ?

Definition:

  • It is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value. 
  • A penalty imposed on suspiciously low-priced imports, to increase their price in the importing country and so protect local industry from unfair competition.
  • Anti-dumping duties are assessed generally in an amount equal to the difference between the importing country's FOB price of the goods and (at the time of their importation) the market value of similar goods in the exporting country or other countries. 
  • It is counter import measure used by a country under the multilateral World Trade Organisation (WTO) regime to protect its domestic producers and market from below-cost/cheap imports.
  • It varies from product to product and from country to country.
  • Anti dumping is a measure to rectify the situation arising out of the dumping of goods and its trade distortive effect.
  • Thus, the purpose of anti dumping duty is to rectify the trade distortive effect of dumping and re-establish fair trade.
  • 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  for the domestic industry.
  • It provides relief to the domestic industry against the injury caused by dumping.