Understanding Anti-Dumping Duty: A Tool for Fair Trade
Anti-dumping duty is a trade protection measure imposed by a country to guard its domestic industry against unfair pricing by foreign exporters. It is triggered when a country exports a product at a price lower than its normal value, typically the price in its own market, thereby harming local producers.
In the case of India, such duties are particularly crucial in curbing cheap imports from dominant exporters like China. These levies not only prevent market distortion but also create a level playing field for Indian manufacturers, helping them survive and thrive in an increasingly competitive global economy.
With India's trade deficit with China ballooning to USD 99.2 billion in 2024–25, protecting domestic production has become a strategic priority. The imposition of anti-dumping duties ensures fair pricing, secures jobs, and reduces overdependence on imports.
The New Measures: Six Products Under Watch
In a decisive move this June, the Central Board of Indirect Taxes and Customs (CBIC), acting on recommendations from the Directorate General of Trade Remedies (DGTR), imposed anti-dumping duties on six key products from China and other countries. These are:
· PEDA – Used in herbicides
· Acetonitrile – A crucial solvent for the pharmaceutical industry
· Vitamin-A Palmitate – Widely used in health supplements and fortification
· Insoluble Sulphur – Key in tyre manufacturing
· Potassium Tertiary Butoxide – A catalyst in pharmaceutical and agrochemical production
· Decor Paper – Used in furniture and interior design sectors
These duties, valid for five years, aim to neutralize the price advantage foreign suppliers enjoy through dumping practices.
The Specifics: Duties Imposed by Product
Each product now attracts differentiated duties, based on the country of origin and the extent of undercutting observed:
· PEDA: USD 1,305.6 to 2,017.9 per tonne (from China)
· Acetonitrile: Up to USD 481 per tonne (from China, Russia, Taiwan)
· Vitamin-A Palmitate: Up to USD 20.87 per kg (from China, EU, Switzerland)
· Insoluble Sulphur: Up to USD 358 per tonne (from China, Japan)
· Potassium Tertiary Butoxide: Up to USD 1,710 per tonne (from China, US)
· Decor Paper: Up to USD 542 per tonne (from China)
These figures reflect the seriousness of the price distortions faced by Indian producers and the government’s intent to mitigate the impact.
Broader Trade Implications and WTO Compliance
These anti-dumping actions align with World Trade Organization (WTO) norms, of which both India and China are members. Under WTO rules, countries are allowed to impose such duties when investigations, like those conducted by DGTR, establish material injury to domestic industries due to dumped imports.
Such defensive trade measures are increasingly becoming common as countries strive to balance open markets with domestic economic resilience.
A Strategic Move Amid Widening Trade Deficit
India's imports from China surged by 11.52% to USD 113.45 billion in 2024–25, while exports to China declined by 14.5%, plunging to USD 14.25 billion. This disparity highlights India’s dependency on Chinese raw materials and intermediates, particularly in sectors like pharmaceuticals, chemicals, and electronics.
By imposing these duties, India signals a shift towards self-reliance in critical industrial components and strengthening local production capacities, a key theme under government initiatives like 'Make in India' and Atmanirbhar Bharat.
A Timely and Necessary Economic Guardrail
India’s decision to impose anti-dumping duties on these six strategic products sends a clear message: trade openness must not come at the cost of domestic industry survival. As global supply chains become more volatile and geopolitical tensions rise, countries must assertively defend their economic interests within multilateral frameworks.
For India, this move is not just a protective shield—it is a strategic economic tool aimed at correcting imbalances, supporting manufacturers, and ultimately reducing its massive trade deficit with China. In doing so, India steps closer to a more self-reliant, resilient industrial base, capable of withstanding global price shocks and unfair competition.
(With agency inputs)
