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Dumping
- 1. PRESTIGE INSTITUTE OF MANAGEMENTAND RESEARCH SUBMITTED TO: SUBMITTED BY: PROF. DR. RUPAL CHOWDHARY AMAN PARMAR MUSKAN PAHWA MUSKAN RAHEJA SIDDHARTH SAHU YASHI PACHAURI INTERNATIONAL ECONOMICS PRESENTATION
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- 3. CONTENTS Introduction todumping 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 Themain 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 Whena 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 DUMPINGON 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 DUMPINGEXPORTING 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 Itis 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.
- 12. ANTIDUMPING MEASURES Tariffduty Import quota Import embargo Voluntary export restraint
- 13. LATEST NEWS RELATEDTO 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.
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