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Indian industry will have greater protection against dumped imports from next year as the government is set to tighten measures related to imposition of anti-dumping duties (ADD) and countervailing duties (CVD) to check flouting of rules.
“The new rules, to be implemented from January 1, 2022, will ensure that exporters trying to circumvent anti-dumping duties by routing items through third countries or other means are not allowed any respite with prompt action taken against such moves. There are also provisions to check duty absorption by some exporters,” a government official told BusinessLine .
ADD, CVD explained
ADD are imposed when it is conclusively proved that the domestic industry is being harmed due to imports taking place at prices lower than those in the exporting country’s home market while CVD is imposed to counter the subsidies being given to the foreign exporters by their governments.
In Budget 2021-22 presented on Monday, the Finance Minister proposed to make certain amendments in the provision relating to ADD and CVD. One of the important provisions is to allow imposition of duty from the date of initiation of anti-circumvention investigation.
“There are cases when anti-dumping duties are imposed by India against a country but to circumvent those duties the exporter routes them through another country or uses other methods. It takes time for the Indian industry to get anti-circumvention duties imposed on these as there is a time gap between initiation of investigation and the findings. Now, with the new rules this will change as ADD against imports from third countries can be initiated right from the day the anti-circumvention investigation begins,” said Dhruv Gupta, Partner, PDS Legal.
New rules’ workings
Explaining how the new rules, once implemented, are likely to work, Gupta pointed out that as soon as the government initiates an anti-circumvention investigation, the duties to be imposed against such imports will be provisionally assessed. The importer will have to give a bank guarantee, at the end of investigation, if circumvention is established. Duties will then be paid on whatever imports have happened during the period of investigation.
Another important proposal is to put in place anti-absorption provisions in the ADD and CVD rules. “This will prevent an exporting country from reducing price of their exported item to nullify the effect of the ADD or CVD imposed by India on the item. For instance, if India finds that an item is being imported at a dumped price and imposes an ADD of, say, ₹20 on it, the anti-absorption provisions will prevent the exporting country to reduce the price by a further ₹20 to do away with the effect of the duty,” Gupta pointed out.
The new rules also propose that final findings are to be issued in ADD/CVD, in investigation in review proceedings, by the designated authority, at least three months prior to expiry of the ADD under review. This is to ensure that the Finance Ministry has enough time to come up with the relevant notifications.
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