Page 36 - Annual Report 2019

prevailing duty needs to be adjusted in line with Countervailing Duties (CVDs) and prescribes the
changed circumstances duly supported by evidence provisions for such imposition with a view to increase
and documentation. and improve the GATT disciplines relating to the use
of both subsidies and countervailing measures. CVDs
Anti-Circumvention Investigations are applicable when a government in the exporting
country provides subsidies or assistance to a local
6.14 The Authority considers application where industry which could be in the form of subsidized
evidence is brought before it to show that imposed loans, tax exemptions, indirect payments, etc. The
measures are being circumvented. The circumvention assistance provided enables these foreign suppliers
can be of various types and follows the discipline and manufacturers to potentially export and sell the
mentioned in the Rules. It may be noted that neither goods for a price less than that at which domestic
the Anti Dumping Agreement nor any other legal companies of the target member country can
instrument under WTO has any provision concerning reasonably sell. Countervailing Duties are meant to
anti-circumvention of ADD. Nonetheless, many neutralize the adverse effects of the subsidies allowed
countries apart from India, such as the European for a particular product in the exporting country, on
Union, the United States, Australia, and Canada the same industry in importing country. The
have their own anti-circumvention provisions within subsidies create an unfair advantage to the exporting
their domestic anti-dumping frameworks. In India, producer and distort fair trade. Therefore, member
the provisions concerning anti-circumvention were countries are becoming very wary of these practices
introduced vide Section 58 of the Finance Act, 2011, and globally there is an increasing trend in number of
accordingly, Section 9A(1A) was inserted in the Act. CVD investigations, as can be seen in the previous
These provisions act as a deterrent for circumventing chapter.
the measures imposed. There have been very few
investigations of Anti-Circumvention world over 7.2 The year 2018-19 was a landmark year for DGTR
including in India. as highest ever initiations of anti-subsidy
investigations took place. The Directorate received 15
6.15 The DGTR issued the first ever finding in anti- applications from the domestic industry seeking anti
circumvention investigation during 2016-17 followed subsidy action which in itself was highest number
by another one during 2017-18. The number of
indicating the increasing trend in allegations towards
final finding notifications during 2018-19 were trade distortions due to subsidisation. After proper
highest ever as the Authority issued three findings scrutiny and mandatory consultations with alleged
made possible by stricter monitoring of the exporting country, the Authority initiated 5 CVD
investigations. There was no pending anti- Investigations as detailed at Annexure II B. The
circumvention investigation as on 31.03.2019. Authority issued two final findings against these
investigations during the year. The ongoing
7. Countervailing Investigations by India investigations will be completed within the stipulated
period. List of CVD measures in force as on 31.3.2019
7.1 The SCM Agreement allows imposition of is at Annexure IB.

CVD Investigations Initiated and Final Findings issued by DGTR

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