“Towards the end of 2021, India imposed an anti-dumping duty on five Chinese products for five years. It includes some aluminum products and chemicals,” Scorch shared with her friends, Orak, Verum, and Felix.
“Whoa! Whoa! You lost me there, pal! What is the anti-dumping duty?” Felix said.
Scorch explained, “Dumping is a term used in international trade. Trade is buying and selling of goods and services. In international trade, countries export and import goods from each other. Imports are goods that a country buys from another country and exports are goods that one country sells to other countries.
Sometimes, a country exports goods to another country at a low price. This price is far lower than the normal price of the goods. It is known as dumping.”
“I still don’t understand,” Felix said, confused.
“Okay, let me explain it to you with an example,” Scorch said.
“Country A makes a toy car for ₹10. It sells the toy car in its own market for ₹15. Now, Country A wants to expand its business to other countries. It decides to approach Country B. But there are already local companies in Country B that sell toy cars for ₹14 each. So, why will the people of Country B buy toy cars from Country A?
Country A decides to sell the toy cars for a lower price. It sells them for ₹12 each. Since Country A’s price is lower, its toy cars are everywhere in Country B’s market. People often buy products at lower prices. This is known as dumping.”
“Dumping is so unfair towards Country B!” Verum said.
“So the anti-dumping duty is to prevent such dumping of goods and help local companies?” Orak said.
“Exactly!” Scorch said.
“India’s organization Directorate General of Trade Remedies (DGTR) conducted several investigations. It reported the need for anti-dumping duty on the products. India’s finance ministry imposed the antidumping duty,” Scorch concluded.
“Also to be noted,” Scorch added, “that India has initiated maximum anti-dumping reports against China.”