ANTI DUMPING DUTY PUT ON SACCHARINE
06, May 2019
Prelims level : Economics Mains level : Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management
Why in News:
- The Finance Ministry has, on the recommendations of the Commerce Ministry, imposed an anti-dumping duty of $1,633.17 per tonne on the import of saccharine from Indonesia.
- Saccharine is a compound most commonly used in sugar-substitute sweeteners.
- Indonesia, accounted for a large chunk of India’s saccharine imports.
- In 2017-18, India imported $4.36 million worth of saccharine from Indonesia, which is 43% of the total imports of the sugar-substitute compound.
- In the April 2018 to February 2019 period, India imported only $1.48 million worth of saccharine from Indonesia, about 20% of its total imports from around the world.
Why should an anti-dumping duty be levied?
- Dumping is a process where a company exports a product at a price lower than the price it normally charges in its home market.
- 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.
- India is one of the largest consumption economies in the world and a potential ground for dumping a wide variety of goods, especially from China, Taiwan and South Korea.
- Thus, India must have strong anti-dumping defences in place.