Companies in India are side-stepping the anti-dumping measures imposed by the government by deliberately misclassifying items imported from China.

Report by Parliamentary Standing Committee on Commerce:

Findings:

• The report notes that the government has been reluctant to review the effectiveness of its anti-dumping measures.
• The anti-dumping framework also suffers with lax implementation.
• The unscrupulous elements are able to import the Chinese goods by circumventing the goods put under the anti-dumping framework through misclassification of products.
• This mis-declaration while importing the goods which otherwise have been put under anti-dumping measures nullify the whole effort to protect the domestic industry from unfair trade practices.
• The Standing Committee named the steel industry as one of the major offenders in this regard, saying that there have been complaints from the domestic steel industry that Chinese non-alloy steel is being imported by being declared as alloy steel.
• The committee noted that though nearly 75-80% of Chinese steel imports are covered under the anti-dumping duty, the import of such steel products have increased 8%.
• The committee finds that while anti-dumping measures are being evaded on the one hand proving to be ineffective; on the other hand, there is a general reluctance on the part of the government to review the effectiveness of anti-dumping measures undertaken by it.

Recommendations:

• The committee feels that the government must take strong punitive measures so that the importers desist from such activities.
• The committee recommended that the Ministry of Steel, in consultation with the Directorate General Of Anti-Dumping And Allied Duties (now the Directorate General of Trade Remedies),to look into the rationalisation of anti-dumping duties and make them realistic to prevent adverse consequences of dumping of Chinese steel goods in the country.
• The committee finds it unfortunate that in the name of Ease of Doing Business, we are more than willing to give market access to Chinese goods which is destroying our manufacturing while China is smartly protecting its industry from Indian competition.

Anti-Dumping duty:

• Anti-dumping duty is an import duty imposed by government on imported products which have prices less than their normal values or domestic price.
• It is protectionist and counter import measure used by country under multilateral World Trade Organisation (WTO) regime to protect its domestic product and market from cheap import.
• Anti-dumping duty to be levied is recommended by Union Ministry of Commerce (i.e. by DGAD), while the Union Finance Ministry imposes it.

Way Forward:

• By adopting the policies and measures taken by the US and the European Union where they adopted aggressive steps to keep a check on the Chinese imports.
• Government can be more proactive in protecting the local business by introducing measures such as anti-dumping and anti-subsidy actions while imposing other restrictions.

Conclusion:

• The impact of Chinese imports has been such that India is threatened to become a country of importers and traders with domestic factories either cutting down their production or shutting down completely,” the committee said.
• According to commerce ministry data, India’s trade deficit with China increased more than two-fold at 219% from $16 billion in 2007-08 to $51 billion in 2016-17. India’s imports of $61 billion from China were six times its exports of $10 billion in 2016-17, making rising trade imbalance a major concern. India is negotiating a deal to get greater market access to China since last few years.
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