April 10, 2019
To protect domestic manufacturers from cheap imports from the Southeast Asian country, the commerce ministry has recommended an anti-dumping duty of USD 1,633.17 per tonne on Saccharin, a kind of sweetener, from Indonesia.
Saccharin is used in a variety of industry such as food and beverage, personal care products, tabletop sweeteners, electroplating brighteners, and pharmaceuticals. Saccharin is more than 500 times sweeter than sugar.
Import of the item into India has increased from 421 tonnes in 2014-15 to 543 tonne during 2017-18. Indonesia is a key trading partner of India in the Southeast Asian region. The bilateral trade between the countries increased to 20.4 billion in 2017-18 from about USD 17 billion.
In international trade parlance, dumping happens when a country or a firm exports an item at a price lower than the price of that product in its domestic market. Dumping impacts the price of that product in the exporting country, hitting margins and profits of manufacturing firms.
According to global trade norms, a country is allowed to impose tariffs on such dumped products to provide a level-playing field to domestic manufacturers.
The duty is imposed only after a thorough investigation by a quasi-judicial body, like – Directorate General of Trade Remedies (DGTR) in India, which has conducted the probe of alleged dumping of this product following a complaint from Swati Petro Products Ltd. The directorate has concluded in its findings that the product has been exported to India from Indonesia below their normal values, due to which the domestic industry has suffered material injury.
The DGTR has said in a notification that material injury has been caused by the dumped imports and hence the authority recommends imposition of definitive anti-dumping duty… so as to remove the injury to the domestic industry, but the final call to impose the duty would be taken by the finance ministry.
In its probe, the directorate has to conclude whether the dumped products are impacting domestic industries. Imposition of anti-dumping duty is permissible under the World Trade Organization (WTO) regime. The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a-vis foreign producers and exporters.