What are Anti-Dumping and Countervailing Duties and Difference (Download PDF)

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Anti-dumping (AD) & Countervailing (CVD) duties are enforced to protect local manufactures- they are protectionist. Customs duty on the other hand is used purely for revenue. Customs duty is specific to product and unlike AD and CVD not specific to country or manufacturer.

Image of Anti-Dumping Duty V/S Customs Duty

Image of Anti-Dumping Duty V/S Customs Duty

Image of Anti-Dumping Duty V/S Customs Duty

Definition of Anti-Dumping and Countervailing Duties

Anti-Dumping

  • Dumping occurs when foreign manufacturers sell their goods at less than fair market value- injuring domestic industry potentially putting it out of business.

  • Government has established “anti-dumping” measures like anti-dumping (AD) duties to bridge the gap to fair market value. AD cases may be manufacturer-specific or countrywide.

Countervailing

  • Similar to Anti-dumping with one significant difference- Countervailing Duties (CVD) are established when a foreign government provides assistance and subsidies to local exporting manufacturers, such as tax breaks enabling foreign exporter to sell the goods cheaper than domestic manufacturers.

  • Bring the importer’s costs up to the fair market value as locally produced goods. CVD cases are country-specific

  • Sometimes done deliberately to stifle competition and then raise prices later.

Anti-Dumping Duty Enforced on 93 Chinese Products

Anti-dumping duty enforced on 93 Chinese products to save domestic industry from cheap Chinese goods.

  • Products fall in the broad groups of chemicals and petrochemicals, steel and other metals, machinery items, fibers and yarn, rubber, plastic products, electric and electronic items and consumer goods.

  • 40 cases concerning imports from China initiated by Directorate General of Anti-Dumping and Allied Duties (DGAD).

Mechanism of Anti-dumping and Countervailing Duty

  • Imposed under multilateral World Trade Organisation (WTO) regime

  • In India, duties are recommended by the Union Ministry of Commerce (i. e. by DGAD) and imposed by the Union Finance Ministry.

- Published/Last Modified on: September 4, 2017

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