Dumping Eco Term Paper Tm

8/7/2019 Dumping Eco Term Paper Tm

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Term paper

Mana

gerial economics

Topic dumping-boon or bane

Submitted to:- submitteby:-

Mr.ashish Sharma AFIFA NAZIM YASMEEN

Roll no:- A68

Reg. no-11012577


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INDEX

1.Preface

2.Acknowledgement

3.Contents

4.Introduction

5.Objectives of study

6.Literature review

7.Methodology :-sources of data

8.Analysis

9.Conclusion

10.Research and Bibliography


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PREFACE

AS MBA Degree requires equal attention practical as well as theoretical aspect of the business,

various problems are to be dealt with in these courses, that is why research programs are there togive deep as well as through knowledge of the subjects.

WE have attempted to live up these requisites while preparing this term paper. It is part of

professional courses. With the help of term paper we can able to understand the deep knowledge

about the specific topic assign to us.

During our project work I observed some of the behind the DUMPING-BOON OR BANE.

It is hoped that this report meets the given expectations and various requirement of the research.


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ACKNOWLEDGEMENT

I take this opportunity to present my votes of thanks to all those guidepost who really acted

as lightening pillars to enlighten our way throughout this project to

successful and satisfactory completion of this study.

We are really grateful to our HOD for providing us with an opportunity to undertake this

project in this university and providing us with all the facilities. We are highly thankful to

MR. ASHISH SHARMA for her active support, valuable time and advice, whole-hearted

guidance, sincere cooperation and pains-taking involvement during the study and in

completing the assignment of preparing the said project within the time stipulated.

Lastly, We are thankful to all those, particularly the various friends , who have been

instrumental in creating proper, healthy and conductive environment and including new and

fresh innovative ideas for us during the project, their help, it would have been extremely

difficult for us to prepare the project in a time bound framework.


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INTRODUCTION

Dumping (in trade)

Definition

The practice of selling goods abroad below the price charged for the same goods in thedomestic market or at a price below the cost of production, usually with the aim of drivingcompetitors out of the market.

Dumping is considered to be an unfair trade practice and, as such, is prohibited under manynational trade laws.

Types of dumping:

Sporadic Dumping: Occasional sale of a commodity at below cost in order to unload anunforeseen and temporary surplus of the commodity without having to reduce domesticprices.

Predatory Dumping: Temporary sale of a commodity at below cost or a lower priceabroad in order to derive foreign producers out of business, after which prices are raisedto take advantage of the monopoly power abroad.

Persistent Dumping: Continuous tendency of a domestic monopolist to maximize totalprofits by selling the commodity at a higher price in the domestic market thaninternationally (to meet the competition of foreign rivals). Forinternational pricediscrimination to take place, conditions must be met:

o Domestic and foreign markets must be separated.

o Demand elasticity of the product must be different in two markets. The good can

be sold with a lower price where the demand elasticity is high; and with a higherprice where demand elasticity is low.


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OBJECTIVE OF STUDY

To know about the dumping wheather it is a boon or bane for the country

Reason behind the dumping in a country

Adverse affect of dumping

What is anti-dumping regulation

Positive effect of antidumping

Steps taken by gonernment to stop dumping-like anti dumping regulation


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Reasons behind the dumping in the country

Dumping occurs when firms start using price discrimination as a strategy for profit

Maximization. The conditions mandatory for dumping to take place are

- Presence of an imperfect market where price discrimination between markets is

Possible. (Because in imperfect market firms are price setters not price takers).

- Segmented markets where there is no arbitrage easily possible between markets.

Only if the above two conditions are satisfied is it profitable for the exporting firm to

Engage in dumping. For any firm, price discrimination in favor of exports is more

Common because the share of exports is usually lesser than the domestic demand.

In the export market, individual firms have lesser monopoly power and hence choose to keep

prices lower in foreign markets while charging higher prices for domestic markets. This can also

be explained through the price elasticity of demand for goods. In areas where the demand is

price inelastic, producers tend to charge a higher price. This is said to be the case in domestic

markets. In foreign markets, price elasticity of demand is elastic and hence prices are low. Thus,

if there is high elasticity on export sales than on domestic sales, firms will dump.


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Adverse affect of dumping in India:-

1. India has become dumping ground for banned drugs, painkiller, depression,

pharmaceuticals

Many spurious drugs that have been banned, withdrawn or marketed under restrictions in othercountries, continue to be sold in India. The pharmaceutical companies and defaulters are playingwith the lives of thousands of people who are not aware of the harmful effects of the drugs theysell.

Life, it seems, comes cheap for the health officials of our country. Otherwise how else wouldyou justify the existence of drugs withdrawn elsewhere in the world but still sold and prescribedin India?

"More than 60,000 branded formulations are available in India. These preparations contain eithersingle drug or drugs in fixed dose combination (FDC). All formulations are used for treatment orprevention of diseases. Out of it only few drugs are lifesaving and essential drugs, otherwisemaximum of them are available as alternative or substitute to each other."

The safety of the combination drugs has to be thoroughly evaluated and there are considerationsfor the drugs that are already in the market as individual or single drug entity. However, thesafety profile of the established drugs will alter when they are combined together. There wasalarming increase in irrational FDCs in recent years and pharmaceutical companiesmanufacturing these FDCs are luring physicians to prescribe by unethical means. This may bedue to the implementation of product patent regime where the mediocre companies find various

alternatives to sustain themselves in the market place and combination products for newerindications play a major role. The total number of essential drugs mentioned in the 14th list ofessential medicines by WHO is 312, out of which only 18 are fixed dose combinations. Butmany of the irrational combinations are popular and widely prescribed by physicians in ourcountry.

India has become a dumping ground for banned drugs. The business for production of banneddrugs is blooming and because there are more consumers here and all illegalities are duly


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obeyed. The irony is that very few people know about the banned drugs and consume themunaware, causing a lot of damage to themselves. The issue is severe and we must not delay inspreading the warning message to the offenders and innocent people.

As big time business enterprises and small time defaulters, pharmaceuticals have been growing

in every direction. There are few provisions for a proper check and control of spurious drugs inIndian markets. Worst than that is the little knowledge and slapdash attitude of the buyers. Evenat this time, a large population takes medicine and drugs without prescribing a doctor, which infact is a very wrong decision and can be dangerous.

Thanks to a virtually "absent" adverse drug reaction mechanism in the country, drugs likeAnalgin, Cisapride, Nimesulide and Piperazine, discarded worldwide due to serious side effectsare among the bestsellers in India. According to a report of the World Health Organisation, therehas not been a single instance of adverse drug reaction reported against any drug in the country.

The business of production of these discarded drugs is booming in India. Some of the most

common ones include Nise (Dr Reddy's), Nimulid (Panacea Biotec) that are discarded forreported liver damage, while Vicks Action 500 from the stable of Procter and Gamble isdiscarded for increasing chances of brain hemorrhage. Anti-depressant drug Droperol (producedby Triokka) has been discarded for irregular heartbeats in patients. Anti-diarrhoeal drugFuroxone (from the house of Glaxo) was withdrawn from the market after reports of cancer insome patients, who were administered the drug.

Eleven drugs - including cisapride, furazolidone, nimesulide and phenylpropanolamine - thathave been banned, withdrawn or marketed under restrictions in North America, Europe andmany Asian countries, continues to be sold in India.

India's contribution to the worldwide collection of data on the side effects of different drugs isdismal. Countries like Ireland, Switzerland and Italy with a population of about 4 million, 33million and 57 million, respectively had submitted 25, 33 and 225 adverse drug reaction onnimesulide. However, India, with over 1 billion population did not report any. Another drugSildenafil (erectile dysfunction drug) had 18 adverse drug reactions reported from Australia butnone from India.

According to a health ministry source, monitoring of adverse drug reaction is not followed in thecurriculum for medical students in India and majority of doctors do not maintain records onpatients. Assessing adverse drug reaction is not an easy task and in a developed country like theUS not more than 10% of the side effects are recorded.

"Regulations in India and US vary. In the US, drugs are not banned; they are withdrawn from themarket. When a certain drug is found to have side affects, Indian regulatory authorities shouldalso withdraw it from the market. Unfortunately that does not happen".

Whenever a drug is banned by the Drug Controller of India, it should stop being available in themarket. But there are times when a drug is banned yet continues to be sold for a few months tillstock lasts. "There is a lot grey zone in the field".


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Drugs continue to be available over the counter because doctors keep prescribing it. "Till thetime the drugs are not banned by regulatory authorities, no doctor can be blamed for prescribingit and as long as doctors keep prescribing, chemists will keep selling these drugs".

Many doctors, experts say, are unaware of the researches being conducted worldwide. "There

have been campaigns against various drugs. Noted doctors keep themselves informed of theharmful side-effects of these drugs and do not prescribe them".

Many people have the opinion that "The problem is two-sided. The demand is still there forthese drugs and that is why they are supplied. Doctors and patients who are used to prescribingand using the drug should realize that there are better and safe alternatives".

2.Cheap imports threatens Indian chemical firms

The ongoing global recession is posing a unique threat to the Indian chemical industry as the

companies are finding increased competition from global chemical suppliers who are turning in

large numbers to tap the still growing Indian markets. Prices of a broad range of basic

chemicals including polymers, petrochemicals, and agro-chemicals have crashed 30 to 70 per

cent in the last two months due to cheap imports, industry complains.

The chemical industry, which comprises over 9,500 companies, says that the governments

attempt to rejuvenate Indian economy can only worsen the situation as India is amongst the very

few large markets that remain in its growth phase. The industry, which records an annual sales of

over Rs 2,45,000 crore and export revenues worth Rs 75,000 crore, has called for urgent anti-

dumping measures to create a level playing field for the domestic industry.

India remains the only bright spot among the large economies. This has resulted in major

chemical/petrochemical economies in this region (China, South Korea, Taiwan and West Asia)

focusing on India as the only large consuming nation without deep structural weaknesses, with

rock-bottom prices, said R Parthasarathy, vice-president, Indian Chemical Council (ICC).

With the external problems of various sick economies with huge surplus capacities in chemicals

and nowhere to go, India is the obvious target and this has already started, he added.

According to ICC, the problem is seriously aggravated by the prevailing import duty structure of

the chemical industry that is between 5 per cent and 7.5 per cent. This compares negatively

against the higher duties ranging from 12-30 per cent in neighbouring countries which havestrong chemical and polymer industries. Even developed countries like Japan, the US and the EU

have higher duties. Hence the stabilisation of the Indian economy and demand boost will not

help the chemical industry, Parthasarathy explained.

While construction and consumption will go up, only the manufacturers from China, West Asia,

South Korea, Taiwan and Asean will benefit. Indian money will be unintentionally supporting

jobs and industry in these countries at the expense of Indian jobs, he said.


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The ICC, along with industry chambers like Ficci, has already approached the high-level official

committee that is looking at the second stimulus package to present their case.

The industry feels that the government should take urgent measures to stop anti-dumping as

normal anti-dumping procedures are time consuming.

3.Cheap Chinese imports hurt SMEs

Industry wants strict anti-dumping measures

NEW DELHI: Cheap Chinese imports are giving Indian small and medium enterprises (SMEs) atough time, particularly when the global economic slowdown and weakening domestic demandare affecting companies across sectors.

Chinese manufacturers, whose products are 10-70 per cent cheaper than Indian products, areoffloading their products in India, reveals a survey conducted by the Federation of IndianChambers of Commerce and Industry (FICCI). Indian SMEs have asked the government to takestrict anti-dumping measures to stop cheaper Chinese imports and save Indian industry. Tradeand industry have reported that with western markets losing their appetite for imports, Chinesemanufacturers are increasingly looking at alternative markets to offload their wares. India is anobvious first choice in such a scenario given its geographical proximity and the fact that it is stillgrowing at an appreciable 6.5-7 per cent rate, the survey says.

4.Cheap Chinese hurts small and medium indusrties

A majority of Indian SMEs are feeling the heat in the domestic market due to rising importsfrom China. The industries that have been impacted by this onslaught includes processed fooditems such as honey; light engineering goods like power presses, welding machines and printingmachinery; heavy engineering goods such as high speed diesel engines; chemicals and chemicalproducts such as soda ash, ammonium chloride; and metal products like auto components, thesurvey points out. Interestingly, the price gap between the Indian and Chinese products is hugeand difficult to explain.

Indian SMEs have urged the government to clear quality and safety norms for Chinese imports

before being allowed to be marketed in India. Immediate imposition of severe testingrequirements on imports from China is a must as these include basic items of consumption andeven vaccines, the survey adds. In 2008 there has been a substantial rise in Chinese imports intoIndia, almost 75 per cent, eroding the market share of Indian companies. Indian SMEs areapprehensive that as the Chinese government gives more incentives to boost exports, importsinto India and other neighbouring countries would only go up.


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To deal with the over the counter export subsidies that Chinese manufacturers enjoy, companiesfeel that the anti-dumping investigations for imports from China need to be beefed up anddecisions taken at a quick pace.

5.Cheap Chinese goods harming Indian industry: government news

The government is taking measures to counter the threat posed to the domestic manufacturing

sector in India, especially from the small and medium scale segment, from cheap and subsidised

Chinese products, the commerce ministrys said today.

India imposed anti-dumping duty on Chinese goods in 22 cases, including final duty in 12 cases

and provisional duty in 10 cases, during 2008-09 and 2009-10 (up to November 2009). Final

safeguard duty was imposed in 4 cases during the two years, a government release said today.

These duties are in accordance with the Agreement on Anti-Dumping (the agreement on the

implementation of Article VI of GATT, 1995), the agreement on subsidies and countervailing

measures, and the agreement on safeguards, the release said.

These provisions are aimed at offsetting the adverse effects of 'dumped' imports, 'subsidised'

imports or 'increased' imports, it added.

POSITIVE EFFECT OF DUMPING:

The effect of dumping differs from country to country. For example it is beneficial for the

country who dumped its product but on other hand it is harmful for the country in which the

dumping is being done.

Positive effect:- Persistent beneficial for the country who dumped the product because due tothis a country would be able to earn revenue from the international market by selling their

dumped product or by selling those product having very low demand in the domestic market.

Due to dumping a country would be able to capture the international market and earn more

profit.


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Role of government

India takes 26 defence measures during 2008-09

India has taken 26 trade defence measures, including anti-dumping duty, since March 2008 up toNovember 2009, in order to protect its small and medium enterprises from cheap imports mainly

from China.

"During 2008-09 and 2009-10 (up to November 2009) anti-dumping duty was imposed in 22

cases and final safeguard duty was imposed in 4 cases," an official statement said.

Trade defence measures offset adverse effects of dumped, subsidised or increased imports.

Imports from China increased by about 35 per cent to Rs 147,605 crore in 2008-09 from Rs

109,116 crore in the previous year.

Anti-dumping duty is imposed when a product is imported at less than its normal value andcauses injury to the domestic industry. Meanwhile, safeguard duty can be levied in case there is

serious threat of injury/market disruption.

During a meeting with Chinese Prime Minister Wen Jiabao in Beijing on January 19, Commerce

and Industry Minister Anand Sharma took up the matter of increasing trade gap with China.

India had a huge trade gap of about $7 billion (over Rs 32,100 crore) in 2008-09, with imports

from China amounting to more than $32 billion.

India takes 26 trade defence measure during mar 2008-nov-09

NEW DELHI - India has taken 26 trade defense measures, including anti-dumping duty, since

March 2008 up to November 2009, in order to protect its small and medium enterprises from

cheap imports mainly from China.


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During 2008-09 and 2009-10 (up to November 2009) anti-dumping duty was imposed in 22

cases and final safeguard duty was imposed in 4 cases, an official statement said.

Trade defense measures offset adverse effects of dumped, subsidized or increased imports.

Imports from China increased by about 35 per cent to Rs 147,605 crore in 2008-09 from Rs

109,116 crore in the previous year.

Anti-dumping duty is imposed when a product is imported at less than its normal value and

causes injury to the domestic industry. Meanwhile, safeguard duty can be levied in case there is

serious or threat of injury/market disruption.

Indian industry urges govt to increase import duty

Indian Steel industry impels the government of India to increase import duty and imposition ofcountervailing duty on steel items in order to examine the cheap arrivals of the commodity from

abroad.

Steel Industry has come out with the proposed wish at a time when Indian Government is

preparing to reveal another package to boost demand.

Due to global economic slump, major steel companies from China and Ukraine started selling

their piled up stocks in India in bulk quantities, which motivated domestic manufacturers to urge

Indian Government for imposition of import duty.

Mr. S K Roongta, chief of Steel Authority of India Limited, urged the Government to impose anadditional 10% import duty on steel items, apart from 10% countervailing duty on TMT bars and

a special additional duty of 4% to save domestic industry.

According to sources, the Government imposed 5% import duty on steel products, which

according to the officials of steel industry is an inadequate to check dumping of the commodity

in the domestic market.

On this, Ispat Industry official stated that as part of package to boost demand, the government

should impose at least 20% import duty among other measures.

Jindal Steel and Power Director, Sushil Maroo, said the Government to further trim down excise

duty, apart from abolishing Central Sales Tax on steel.

Steel prices have touched a high of $1,250 a tonne earlier this year and are now hovering around

$550 mark.

Steel demand from infrastructure and automobile industry declined as they were hit by the global


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dismal economy and liquidity crunch in the market. The package is expected to infuse growth in

ailing sectors to increase steel offtake.

Pthallic anhydride imports to attract 20%safeguard duty news

The government has imposed a 20-per cent safeguard duty on pthallic anhydride (PAN), a

chemical used in the manufacture of plastics and dyes, for 200 day, in order to discourage

imports and protect local producers.

"The government has imposed 20 per cent safeguard duty on import of PAN," a senior

commerce ministry official said, adding the duty would remain in place for 200 days.

The duty was imposed following recommendations from the directorate general of safeguards

(DGS), which had recommended imposition of 25 per cent safeguard duty on import of pthallic

anhydride for about seven months.

The investigation followed an application filed by four affected firms - Thirumalai Chemicals

Ltd (Ranipet, Tamilnadu), IG Petrochemicals Ltd (Raigad, Maharashtra), Mysore

Petrochemicals Ltd (Raichur, Karnataka) and SI Group India Ltd (Navi Mumbai, Maharashtra) -

for imposition of safeguard duty to protect the domestic producers against serious injury caused

by the increased imports of phthalic anhydride into India.

The four companies account for about 85 per cent of pthallic anhydride production in the

country.

The applicants have alleged serious injury caused to the domestic producers by the increased

imports of phthalic anhydride into India. Phthalic anhydride is the principal commercial form of

phthalic acid. It is produced by catalytic oxidation of ortho-xylene (OX) with air or by the

catalytic oxidation of naphthalene and is used in organic synthesis of plastics (alkyd resins) and

plasticizers, etc.

Phthalic anhydride is imported into India from Republic of Korea, Indonesia, Israel, Taiwan and

Pakistan. The imports pthalic anhydride have shown an increasing trend in absolute terms as

well as compared to the domestic production.Imports of the chemical rose by 60 per cent from 19,599 tonnes for the whole of the financial

year 2004-05 to 18,600 tonnes in the first five months of fiscal 2006-07.

Unlike anti-dumping duty, which varies from product to product and country to country,

safeguard duties are levied in a uniform way.


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What is anti-dumping regulation act:

Although dumping does benefit the consumers of the importing country in the shortrun, it is harmful to the domestic producers as their products are unable to competewith the artificially low prices imposed by the imported goods. As a method ofprotection to the domestic industries, anti dumping duties are thus levied on theexporting country which has been accused of dumping goods in another country. Asthe antidumping duty is only meant to provide protection to the domestic firms in the

initial stages, as per the international laws, the antidumping legislations may last for amaximum period of five years.

Antidumping measures are of two kinds: 2

Antidumping duty: This is imposed at the time of imports, in addition to other customsduties. The purpose of antidumping duty is to raise the price of the commodity whenintroduced in the market of the importing country.


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Price undertaking: If the exporter himself undertakes to raise the price of the productthen the importing country can consider it and accept it instead of imposingantidumping duty..

This is a form of tariff and is hence treated under the customs tariff act. Anti dumpingduties are charges levied against the exporting country for selling their price lower thanthe normal price in another country. The main difference between anti dumping andthe other measures is that anti dumping is not retaliatory.

Hence, in the international context, it is the antidumping duty that protects thedomestic producers initially and consumers in the long run. The duty is justifiedbecause in case of many industries the start up period is long and start-up costs arealso high. Once these firms are forced out of the market as a result of dumping byexporters, it is very difficult for them to restart when the same exporters raise prices.

Usually, the intentions of charging such low prices to foreign consumers is to be able towipe out the domestic industries and eventually acquiring monopoly power in theforeign market (i.e. using predatory pricing). Thus it is on this ground that the antidumping duties have been justified. The main intension is to protect the domesticindustries.

India and Anti dumping

Acts and laws that govern dumping are:-

The first Indian Anti-dumping legislation came into existence in 1985 when theCustoms Tariff (Identification, Assessment and Collection of duty or Additional duty onDumped Articles and for Determination of Injury) Rules, 1985 were notified. Section 9of the Customs Tariff Act, 1975 empowers the central government to impose antidumping

duty. The manner and procedure of antidumping investigations and theappointment of designated authority, are governed by the anti-dumping rules. Theserules contain the operational provisions and confirm to the WTO agreement on antidumping.The Directorate General of Anti-Dumping & Allied Duties (DGAD) was constituted inApril 1998. It is located in New Delhi. Since then, all anti dumping cases in India havebeen handled by DGAD. Today, the DGAD is headed by the Designated Authority of thelevel of Additional Secretary to the Government of India who is assisted by a JointSecretary and a Director. Besides, there are eleven Investigating and Costing Officers

REVIEW OF LITRETURE

1.Dumping in a Global World: Why Product Quality Matters


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Jos Luis Moraga-Gonzlez

Jean-Marie Viaene

The authors Jos Luis Moraga-Gonzlez and Jean-Marie Viaene of the article DUMPING IN

A GLOBAL WORLD:WHY PRODUCT QUALITY MATTERS Anti-dumping actions are now

the trade policy of choice of developing and transition economies. To understand why these

economies have increasingly applied anti-dumping laws, we build a simple theoretical model of

vertical intra-industry trade and investigate the strategic incentives of exporting firms to

undertake dumping. We show that the definition of dumping matters. Based on a comparison of

low-quality and high-quality prices, only unilateral dumping by the low-quality firm obtains. By

contrast, the standard WTO definition leads to either reciprocal or unilateral dumping by the

high-quality firm, depending on cross-country differences in incomes, the height of tariff

protection and on exchange rate changes.

2. Universal Dumping of Homogeneous ProductsTracy Murray (2008)

In this article the author observed and explain thatContrary to predictions from traditional

comparative advantage analysis, a class of models with imperfect competition predicts intra

industry trade in homogeneous goods. Author explain that Brander and Krugman offer a model

with two countries and one firm in each country which generates the outcome that both firms

dump into the export market (reciprocal dumping). We determine the extent to which higher

dimensionality alters this outcome by introducing a model with several firms in each of several

countries. THE AUTHOR tries to prove that dumping is universal. Thus, whenever trade occurs

dumping occurs

3. Dumping and Anti-Dumping

Paolo Farah(2005)

Roberto Soprano

In this article the author Robert Soprano wants to explain that the Dumping is the practice of acompany exporting a product to another country at prices lower than the normal value of theproduct (the domestic prices of the product) on its own domestic market. He also explain that inthe European Union the adoption of antidumping measures (e.g. antidumping duties) is regulatedby the EU Antidumping Regulation 384/96 which complies with WTO obligations. The purpose
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of the Handbook of Paolo Farah and Roberto Soprano is to foster a greater understanding of theEU Antidumping Regulation and assist entrepreneurs in lodging antidumping complaints.

4. ANTI-DUMPING DUTY CLAMPED ON HOT ROLLED STEEL IMPORTS

In this article the author ( anonymous) explain about the anti dumping duties.he says that The

Indian Finance Ministry has levied anti-dumping duty on imports of hot rolled (HR) steel coils,

sheets, strips, plates and boiler quality plates. The anti-dumping duty has been levied from

November 27, 1998. The HR product producers like Steel Authority of India Ltd, Tata Iron and

Steel Company Ltd, Essar and Lloyds are expected to benefit from the move. The antidumping

duty will affect cold rolling units like Bhushan Steels and Ruchi strips as they have to pay more

on imports. While the reference price for the HR coils is 14,300 per tonne, it is around Rs15,000

per tonne for plates and Rs22,000 per tonne for boiler quality plates.

5.Is China killing Indian manufacturing sector?

In this article the author ISHA VERMA who is sales manager in LARSEN AND TOUBRO

wrote this article in the year 2009 and explain that the Private sector manufacturing engineering

in India is facing a stiff competition from neighbouring countries like China who is

systematically killing Indian manufacturing sector and sought 25% anti-dumping duty on

Chinese goods. China has a fixed currency. It is not a market economy like ours.

In India, we have taxes on goods manufactured locally, but none on imported products (from

China). This is an unfair situation for Indian goods. This is why there should be 25% anti-

dumping duty on Chinese products. The Indian power companies, especially those in the private

sector, have placed huge orders for power plant equipment with China.

6.Dumping Determination Discretions Analysis: Through Lenses of Relevant

Accounting Principles

Samreth Seng(2006)

The author observed that the Antidumping (AD) law and policy is concerned with fair trading among World Trade
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Organisation. However, it has been known to be used as protection policy. Article II of Agreement on

implementation of Article VI of GATT 1994 provides significant discretions to national investigating authorities in

investigating AD actions. Positive outcome of AD cases is predictable. The current paper contributes to AD

literature by investigating the discretions provided in accounting principles point of view. The findings indicate that

there is a great range of accounting principles relevant to the computation of exported price, normal value and

dumping -margin. Each of the accounting principles identified provides a different product cost.

7. Free Versus Fair Trade: The Dumping IssueKaren Schiele (2005)

Author says that theTrade liberalization has had little effect on the use of antidumping tariffs - tariffs imposed on

imports judged by a government the unfairly priced. As more countries resort to such tariffs, questions arise about

the merits of this form of trade protection, particularly when other remedies are available to industries hurt by

import competition.

8. Anti dumping Law and Practice: An Indian Perspective

Sugandh Saksena(2001)In this article the author observed that The concept of Anti -dumping measures serves a host of implications and is

important weapon in the arena of both national and international trade. Present trade policies have picked up the

most liberal approaches. Most of the countries have imbibed and implemented various provisions on anti-dumping

India, also being a member of WTO has drafted its laws and policies keeping in mind the provisions stated in the

WTO/GATT Agreement. Thereby to understand the Indian perspectives, international aspect cannot be ignored and

needs an immediate reference. Although, few of the statutes in India make arrangements for antidumping provisions

as put forward in the present paper.He also explains that Anti Dumping basically, deals with the price behavior of

the exporters whereby, injury is the main ingredient required to be proved.Dumping is per se not unlawful as prices

may vary from time to time, in accordance with the supply-demand market fluctuation .Dumping as a form of price

discrimination is a casual practice in the domain of international trade. Whenever dumping emerges as a threat to

domestic market of a country, its Designated Authority has the power under WTO Agreement to initiate necessary

action against such exporters

9. European Anti-dumping Law and China

Piet Eeckhout(1999)

According to the paper of the author examines recent developments in the European Union's

anti-dumping policy, as it is applied towards China. It concentrates on recent court cases

involving dumping from China and on the basic non-market economy issue. The author

essentially argues that the European Union's policy does not take account sufficiently of China's

development towards a market economy, and that there are various legal flaws in the way the

policy is applied.

10.DUMPING AND ANTIDUMPING: THE RHETORIC AND THE

REALITY OF PROTECTION IN INDUSTRIAL COUNTRIES1. J. Michael Finger(2007)
http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=834637http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=1544728http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=328170http://wbro.oxfordjournals.org/search?author1=J.+Michael+Finger&sortspec=date&submit=Submithttp://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=834637http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=1544728http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=328170http://wbro.oxfordjournals.org/search?author1=J.+Michael+Finger&sortspec=date&submit=Submit


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Author J.MICHAEL FINGER defines that the wide gap separates the rhetoric from the reality ofprotection in industrial countries. Antidumping is the current reality of that protection.Protectionist interests stretch the definition of dumping as far as they may to shelter actionsagainst imports under the antidumping umbrella.

This article is about antidumping, in particular about the history of antidumping regulation and

its evolution under the GATT system into a major instrument of protection. The thesis isstraightforward: antidumping is the fox put in charge of the henhouseordinary protection witha good public relations program. There is little in its history to suggest that the scope ofantidumping was ever more particular than protecting home producers from import competition,and there is much to suggest that such protection was its intended scope.

The article has three sections. The first looks into the origins of antidumping regulation, thesecond examines contemporary regulation (antidumping under the GATT), and the thirdsummarizes the significance of the first two.

11.Anti-dumping measures and international pricingpolicy: an Australian study.

Author:Rahman, Syed H. January 1, 2004

The author observed that the number of anti-dumping initiatives by governments all over theworld has increased significantly during the recent years. This has a potential effect on theinternational pricing policy of firms.

This research focuses on the impact of the anti-dumping measures on the international pricingpolicy of firms and any strategic measures that the firms take to counter the anti-dumpingactions. An a priori model of the impact of anti-dumping measures on international firm's pricingpolicy has been developed based on literature review and tested using structural equationmodelling technique. Data for the research has been gathered from 178 Australian internationalmarketers. Results of the study show that there is an agreement among the participating firmsthat the current anti-dumping laws of different countries are often confusing and there is nouniform definition of what may be called as ' dumping'. There is a general perception among theparticipating firms that more and more governments are using this as another non-tariff barrier.

Results of this study also show that international firms are finding concentrating in less sensitiveproduct categories, cooperation with local competitors and differentiation through enhancedservices and trading up as good strategic measures, to counter the effects of anti-dumpingactions.


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ANALYSIS

In economics, "dumping" can refer to any kind of predatory pricing. However, the word is now

generally used only in the context of international trade law, where 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. The term has a negative connotation, but advocates of free markets see "dumping"as beneficial for consumers and believe that

protectionism to prevent it would have net negative consequences. Advocates for workers and

laborers however, believe that safeguarding businesses against predatory practices, such as

dumping, help alleviate some of the harsher consequences of free trade between economies

at different stages of development

Remedies and penalties

In United States, domestic firms can file an antidumping petition under the regulations

determined by the Department of Commerce, which determines "less than fair value" and theInternational Trade Commission, which determined "injury". These proceedings operate on a

timetable governed by U.S. law. The Department of Commerce has regularly found that products

have been sold at less than fair value in U.S. markets. If the domestic industry is able to establish

that it is being injured by the dumping, then antidumping duties are imposed on goods imported

from the dumpers' country at a percentage rate calculated to counteract the dumping margin
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Conclusion

I have concluded that the dumping have different effect on different countrylike it is beneficial for the country who dumped the product but harmful for the country beingdumped. The government of the dumped country creates anti-dumping duties on the importedgoods.

The Antidumping Agreement was codified during the Tokyo Round of GATT negotiation(1973-79) to stop "predatory" pricing. It was thought that if such a protective tool ismade available to a country, it may feel encouraged to trade freely. Theunderdeveloped economies have every reason to feel scared that the large scalemanufacturers of the developed world will be able to flood the domestic markets withaggressive pricing. This is a very valid point and there can be no objection toantidumping duty applied on this basis.However in reality, as has been observed through past cases that more often than not,anti dumping legislations are filed by firms who have strong power in the domesticcountry and hence are able to lobby the governments. Well organised industries, areable to manoeuvre their way and get the decision in their favour. This is even easier, ifmoney can buy political influence as big firms have the financial muscle to bulldoze

their way through the bureaucracy. These firms apply for antidumping protection merelybecause they feel threatened by foreign firms and in the process breed inefficiency. Ifwe study the cases in India so far, we realise that the duties do seem to be in favour of

the dominant players. As large as 40 out of 64 cases on which final antidumping dutieshave a single petitioner6.

REFERENCES AND BIBLIOGRAPHY

BOOKS PREFERED:-

MANAGERIAL ECONOMICS- GEETIKA AND GYALI GHOSH

BOOKS OF MODERN THEORY K. K. DWETTE

NEWSPAPER AND JOURNALS


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Economics Times-Business International

Business Standard

Journal of International Business Research

WEBSITES:-

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