Anti-dumping Duties Beneficial to Industry and External Sector, Claims C-DEP's Bhattacharya

India's Anti-Dumping Duties: A Shield Against Unfair Imports

Anti-dumping duties are a crucial tool for India's industrial base, shielding it from unfairly priced imports while reducing external pressure through avoidable imports, according to Jaijit Bhattacharya, founder and president of the Digital Economy and Policy Research Centre (C-DEP).

Speaking at the launch of a report on anti-dumping duties on May 26, Bhattacharya emphasized that trade-remedy measures are based on objective assessments of unfair practices, rather than competing industry opinions. He noted that the implementation of anti-dumping duties is not a subjective decision, but rather a hard, cold calculation based on data.

The debate over the use of anti-dumping duties has been ongoing, with some downstream industries and MSMEs arguing that such measures raise input costs. However, domestic manufacturers argue that anti-dumping duties are necessary to counter unfairly priced imports.

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Bhattacharya highlighted the difference in the positions of companies within the manufacturing value chain. Upstream industries, which produce raw materials and industrial inputs, generally favor anti-dumping measures as they compete directly with imported products. In contrast, downstream industries prefer lower-cost imports.

Bhattacharya cited China as an example of the evolution of import patterns. Chinese exports initially targeted consumer goods segments, but increasingly moved into industrial sectors such as steel, plastics, and petrochemicals. Today, the parts used in Indian products are often Chinese, but the final product is Indian.

Anti-dumping investigations are governed by internationally accepted methodologies and are not arbitrary protectionist measures. Bhattacharya emphasized that the question is not whether some industries want anti-dumping duties or not, but rather whether a company is selling in India's market more aggressively and at lower prices than in its own market. If so, it is considered dumping.

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Bhattacharya stated that anti-dumping measures can reduce import expenditure and strengthen India's external position, although they are only one part of a larger picture. He estimated that anti-dumping measures could save India around $3 billion in import expenditure. While this figure is relatively modest compared to India's annual oil import bill of roughly $130 billion, the savings become more meaningful when energy prices rise sharply.

"If the oil import bill goes up by another $10 billion, then saving $3 billion becomes meaningful," Bhattacharya said.

Bhattacharya linked India's external-sector outlook and the rupee's trajectory to developments in West Asia. He noted that the West Asia conflict has encouraged investors to move money into safe-haven assets, while also fuelling concerns over oil supplies and import costs.

"If peace is achieved in West Asia and reconstruction of the oil infrastructure takes place, as long as oil starts flowing normally again, the pressure on the import bill will ease," Bhattacharya said. "Some of the hot money that has gone out of the stock market will start coming back."

Bhattacharya stated that policymakers are likely to favor a relatively stable exchange rate. "The government will try to keep the rupee a little weak so that exports remain competitive. The rupee has already gone down and the economy has adjusted to it. They will try to stick to it and try not to make it weaker," he said.