Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

Anti-dumping duty on viscose fibre from Indonesia


From UPSC perspective, the following things are important :

Prelims level: Anti-dumping duty

Mains level: Not Much

The Directorate General of Trade Remedies (DGTR) has recommended the levy of anti-dumping duty (ADD) on viscose staple fibre imported from Indonesia.

What is Dumping?

  • Dumping is a process wherein a company exports a product at a price that is significantly lower than the price it normally charges in its home (or its domestic) market.
  • This is an unfair trade practice which can have a distortive effect on international trade.
  • Anti-dumping is a measure to rectify the situation arising out of the dumping of goods and its trade distortive effect.

What is Anti-Dumping Duty?

  • An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.
  • In order to protect their respective economy, many countries impose duties on products they believe are being dumped in their national market.
  • In fact, anti-dumping is an instrument for ensuring fair trade and is not a measure of protection per se for the domestic industry.
  • Such ‘dumped’ products have the potential to undercut local businesses and the local economy.
  • Anti-dumping duties provide relief to the domestic industry against the injury caused by dumping.

Mechanism in India

  • The Department of Commerce recommends the anti-dumping duty, provisional or final.
  • The Department of Revenue in Finance Ministry acts upon the recommendation within three months and imposes such duties.

WTO and Anti-Dumping Duties

  • The WTO operates a set of international trade rules, including the international regulation of anti-dumping measures.
  • It does NOT intervene in the activities of companies engaged in dumping.
  • Instead, it focuses on how governments can—or cannot—react to the practice of dumping.
  • In general, the WTO agreement permits governments to act against dumping if it causes or threatens material injury to an established domestic industry.

Issues with such duties

  • Anti-dumping duties have the potential to distort the market.
  • In a free market, governments cannot normally determine what constitutes a fair market price for any good or service.

Back2Basics: Viscose Fibre

  • Viscose is a type of rayon. Originally known as artificial silk, in the late 19th century, the term “rayon” came into effect in 1924.
  • The name “viscose” derived from the way this fibre is manufactured; a viscous organic liquid used to make both rayon and cellophane.
  • It is the generalised term for a regenerated manufactured fibre, made from cellulose, obtained by the viscose process.
  • As a manufactured regenerated cellulose fibre, it is neither truly natural (like cotton, wool or silk) nor truly synthetic (like nylon or polyester) – it falls somewhere in between.
  • Chemically, viscose resembles cotton, but it can also take on many different qualities depending on how it is manufactured.


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