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Dumping
1. PRESTIGE INSTITUTE OF
MANAGEMENT AND RESEARCH
SUBMITTED TO: SUBMITTED BY:
PROF. DR. RUPAL CHOWDHARY AMAN PARMAR
MUSKAN PAHWA
MUSKAN RAHEJA
SIDDHARTH SAHU
YASHI PACHAURI
INTERNATIONAL ECONOMICS PRESENTATION
3. CONTENTS
Introduction to dumping
Reasons for dumping
Objectives of dumping
Forms of dumping
Effects of dumping on importing and exporting countries
Management of dumping (price undertaking , antidumping)
Antidumping measures
Facts or latest news related to dumping
4. INTRODUCTION TO DUMPING
Dumping is a situation of price discrimination, where the price of a product when sold to
the importing country is less than the price of the same product sold in the market of the
exporting country.
Dumping is price discrimination between two markets in which the monopolist sells a
portion of his produced product at a low price and the remaining part at a high price in the
domestic market.
5. REASONS FOR DUMPING
Price discrimination
Predatory pricing
Surplus stock
Economies of large scale production
6. OBJECTIVES OF DUMPING
The main objectives of dumping are as under:
To dispose off an over-stock casually produced due to wrong judgment of demand.
To develop new trade connections by charging low prices.
To drive competitors out of the foreign market, whether foreigners or native
producers.
To reap economies of large scale production.
To take advantage of differences in demand elasticity.
To Find a Place in the Foreign Market
Expansion of Industry
7. FORMS OF DUMPING
Sporadic dumping
Companies dump excess unsold
inventories to avoid price wars in the
home market and preserve their
competitive position. They can either
dump by destroying excess supplies or
export them to a foreign market where the
products are not sold.
Predatory dumping
Unlike sporadic dumping, which is
occasional, predatory dumping is
permanent. It involves the sale of goods
in a foreign market at a price lower than
the home market. Predatory dumping is
done to gain access to the foreign market
and eliminate competition. It creates
a monopoly in the market.
8. Persistent dumping
When a country consistently sells
products at a lower price in the foreign
market compared to the local prices, it is
called persistent dumping. It happens
when there is a constant demand for the
product in the foreign market.
Reverse dumping
Reverse dumping happens when the
demand for the product in the foreign
market is less elastic. It means that
changes in price do not impact demand.
Therefore, the company can charge a
higher price in the foreign market and a
lower price in the local market.
9. EFFECTS OF DUMPING ON IMPORTING
COUNTRIES
Positive effects:
Cheap rates of goods and services available in the country.
Help to change people’s taste which is beneficial for standard of living.
Creates a competition in the market.
Negative effects:
Domestic country is not able to bear competition.
Reduced profits and decline in productivity.
Reduced return on investments.
10. EFFECTS OF DUMPING EXPORTING
COUNTRIES
Positive effects:
Exporting country earns foreign currency.
Helps to improve trade balance.
Negative effects:
Increases the demand of raw material in exporting country.
Reduces the trade in domestic market.
11. MANAGEMENT OF DUMPING
It is basically divided into two categories:
Price undertaking: Undertaking by an exporter to raise the export price of the product to
avoid the possibility of an anti-dumping duty.
Anti-dumping: It is a measure to rectify the situation arising out of the dumping of goods
and its trade effect. It helps in reestablishing fair trade . It provides relief to the domestic
industry against the problems caused by dumping.
13. LATEST NEWS RELATED TO DUMPING
India may extend anti dumping duty on ployester fabric used in shoes.bags imported from
China.
Government extends anti dumping duty on steel items by two months.
Indonesia may impose 15% anti dumping duty on steel products.
US imposes anti dumping duty on steel pipe imports from India.
Government may impose anti dumping duty on imports of coated paper.
Anti dumping duty imposed on import of bus / truck tyres from China.
Government may impose anti dumping duty on a chinese medicine for infections.
