Why in the News?
The Government has imposed a Minimum Import Price (MIP) of US$0.766/kg on PVC (Polyvinyl Chloride) Suspension Resin to protect domestic manufacturers from cheap imports.
What is MIP?
- Minimum Import Price (MIP) is the minimum price below which a product cannot be imported.
- It protects domestic industries from low-priced imports.
- Unlike anti-dumping duty, MIP applies to all imports, irrespective of the exporting country.
What is DGTR?
- The Directorate General of Trade Remedies (DGTR) investigates unfair trade practices.
- It recommends: Anti-dumping duties, Countervailing duties, and Safeguard measures
Why was MIP Imposed?
- Protect domestic PVC manufacturers from cheap imports.
- Address import dependence due to insufficient domestic production.
- Exemptions are available for:
- Export Oriented Units (EOUs)
- Special Economic Zones (SEZs)
- Advance Authorisation Scheme imports.
Challenges
- Higher input costs for PVC-based industries.
- Possible disputes at the World Trade Organization (WTO).
- Does not address the domestic capacity gap.
- Requires strict customs enforcement against under-invoicing.
Prelims Facts
- India uses MIP, anti-dumping duty, countervailing duty and safeguard duty as trade remedy measures.
- PVC (Polyvinyl Chloride) is a widely used plastic in pipes, cables, packaging and construction.
- DGTR functions under the Department of Commerce, Ministry of Commerce and Industry.
[2020] With reference to the international trade of India at present, which of the following statements is/are correct?
1.India’s merchandise exports are less than its merchandise imports.
2.India’s imports of iron and steel, chemicals, fertilisers and machinery have decreased in recent years.
3.India’s exports of services are more than its imports of services.
4.India suffers from an overall trade/current account deficit.
Select the correct answer using the code given below:
a) 1 and 2 only
b) 2 and 4 only
c) 3 only
d) 1, 3 and 4 only