What is Dumping ?<br /> Dumping is defined as the act of a manufacturer in one country exporting a product to another country at a price which is either below the price it charges in its home market or is below its costs of production<br /> A product is considered as dumped when, <br />export price < normal price<br />The difference between the export price and normal value is known as margin of dumping( expressed as % of export price of a product)<br />
Types of Dumping<br />Intermittent Dumping : When production of a product is more than demand in home country , the stocks are piled up even after sales. In such situation, the producer sells the remaining stock in foreign countries at a lower price than in home country<br />Persistent Dumping : The monopolist sells the remaining production in foreign market at low price continuously<br />Predatory Dumping: : The monopolist sells the product in a foreign market at low price to drive away competitors and increase the price once they leave the market.<br />
WHY is it happening?<br />To enter the Foreign market by eliminating the competitors<br />To sell Surplus Production, the producers dump their products<br />To Develop Trade Relations ,the manufacturers sell their output in foreign countries at lower price.<br />
EFFECTS Of Dumping:<br />ONIMPORTING COUNTRY:<br />Decline in sales and profits<br />Affects the survival of industry<br />Preferences of the consumers is changed which leads to forcible importation at high price if the dumping is stopped<br />Increases the deficit of Balance Of Payments( BOP)<br />Importing country benefits because of anti-dumping tarriffs<br /> ON EXPORTING COUNTRY:<br />The consumers of exporting country pay higher price where as, the foreign market enjoys at a lesser price<br />Finds market for its excess production &earns foreign exchange<br />
HOW is it happening?-Anti-Dumping investigation process<br />
Anti dumping measures<br /> In view of negative effects of Dumping , the importing country imposes Anti Dumping Measures<br />Tariff Duty : High rates of import tariff on dumping<br />Import Quota : Restricts the volume of imports<br />Import Embargo : Bans the import of particular goods or all goods from a country<br />Voluntary Export Restraint : Exporting countries realises the negative effects and voluntarily come for Bilateral agreements. <br />In INDIA , anti-dumping actions are taken by , <br />Directorate of Anti-Dumping and Allied Duties,Ministry of Commerce,as per Customs tariff Act,1975 as ammended in 1995,based on Article VI of GATT 1994.<br />
ADM are not applicable if:<br />The margin of dumping is significantly small (less than 2% of export price)<br />The volume of imports is negligible(less than 3%of total imports of that product in a country)<br />Ex-Developing countries<br />Anti-Dumping actions may be suspended or terminated if the exporter concerned furnishes an undertaking to revise the price to remove the dumping or the injurious effect of dumping.<br />
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