Page 9 - Annual Report 2019

INTRODUCTION

ndia has always believed in the benefits of free (a) Anti-Dumping Duty (“ADD”): Duty imposed
trade and economic openness. However, against imported goods, when the export price of the
Iglobalization of trade, despite its several imported goods is lower than the normal value of the
advantages, has sometimes posed challenges to the goods in the domestic market of the exporting country
domestic industry in the importing country due to and there is a causal link between the dumping and
adoption of unfair trade practices by some exporters or injury suffered by the competing Domestic Industry in
exporting countries, which need to be addressed by the country of import.
timely and effective trade remedial measures.
(b) Counter-vailing Duty (“CVD”): Duty imposed
World Trade Organization (WTO) is the only global to offset the unfair advantage to exports on account of
organization dealing with the rules of trade between subsidy policies, rules, and regulations by the
nations. The WTO Agreements were negotiated and Government of exporting countries, if, such subsidized
signed by most of the world’s trading nations and imports are causing injury to the Domestic Industry of
ratified in their parliaments. The goal was to liberalize the importing member country.
as well as supervise the world trade. Binding tariffs,
and applying them equally to all trading partners (c) Safeguard Duty (“SD”): Duty imposed on
(Most-Favoured-Nation treatment, or MFN) are key to imported goods to prevent injury or threat of injury to
the smooth flow of trade in goods. The WTO allows the the Domestic Industry of the importing country from a
members to use Trade Remedy instruments namely, sudden surge of imports. The Safeguard duties are
Anti-Dumping, Anti-Subsidy and Safeguard measures applicable to all exporting countries irrespective of the
against the import of products to prevent injury or origin of the product.
threat of injury to the Domestic Industry of the
importing Country. These measures can be applied (d) Safeguard Quantitative Restriction (“SQR”):
within the disciplines of the following WTO SQRs are remedial measures taken in the form of
Agreements: quantitative restrictions applied on import of goods to
prevent injury/ threat of injury to Domestic Industry of
the importing country due to a sudden surge in
(I) Agreement on Implementation of Article VI
imports. QRs are applicable against exports from all
of GATT 1994 (Anti-Dumping);
exporting countries irrespective of the origin of the
(ii) Agreement on Subsidies and Countervailing
products.
Measures (ASCM);
(iii) Agreement on Safeguards.
The duties imposed under trade remedy instruments
are levied in addition to the standard duties on the
The Trade Remedy instruments, which are aimed at respective products. A product may be subject to both
providing a level playing field to the Domestic Anti-Dumping Duty and Counter-vailing Duty which
Industry from the adverse impact of the unfair trade are generally levied for 5 years (rarely it has been
practices, if any, from any exporting country, redress imposed for a lesser period) to counterbalance the
trade distortions in the following different ways: impact of dumped imports and subsidies in an exporting

1 | Annual Report 2018-19 | DGTR