India has initiated a probe into the alleged dumping of aluminium foil from China, Indonesia, Malaysia and Thailand following a complaint by domestic manufacturers. Hindalco Industries, Raviraj Foils and Jindal India have filed an application before the commerce ministry’s investigation arm Directorate General of Trade Remedies (DGTR), seeking initiation of anti-dumping investigation on imports of ‘Aluminium foil 80 micron and below’ from these countries.
The applicants have alleged that dumping has impacted the industry and has requested for imposition of the anti-dumping duty on the imports. In a notification, DGTR said that on the basis of prima facie evidence submitted by the applicants, “the authority, hereby, initiates an investigation”.
In the probe, the directorate will determine the existence, degree and effect of any alleged dumping in respect of the product under consideration from the four nations. If it would finds that there is a dumping and it is impacting the domestic manufacturers, it will recommend the amount of anti-dumping duty, which if levied, would be adequate to remove the injury to the domestic industry. While DGTR recommends the duty, the finance ministry imposes it.
The period of investigation is from April 2019 – March 2020. It would also look into the data of April 2016-19 period.
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 price of that product in the importing country, hitting margins and profits of local 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, such as DGTR, in India.
In its probe, the directorate has to conclude whether the imported products are impacting domestic industries.Imposition of anti-dumping duty is permissible under the World Trade Organization (WTO) regime. These countries are members of the Geneva-based organisation, which deals global trade norms.
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.