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Anti-dumping duties
Context:
The finance ministry’s anti-dumping duties throughout the preceding three fiscal years were primarily attributed to goods produced by one or two domestic producers.
More on News:
- Out of 46 anti-dumping levies, 60% were aimed at products that came only from China, and 26% were aimed at products that came from China as well as at least one other country.
- In the FY24, the Ministry of Finance applied anti-dumping taxes in 86% of cases recommended by the Ministry of Commerce and Industry.
- This is a big jump from the 42% rate seen in the two previous fiscal years.
Types of duties on Foreign Trade:
Tariffs:
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- Tariffs are taxes imposed by one country on goods and services imported from another.
- Tariffs provide a price advantage to domestically produced items over similar imported goods, while also increasing government revenues.
- Example: The import duty imposed on cars imported from other nations is an example of a tariff.
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Custom Duties:
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- Customs duties are taxes levied on commodities as they pass international borders. It is a type of indirect tax.
- Customs taxes are levied on the import and export of products around the world to generate revenue and/or protect native institutions against international rivals.
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Anti-Dumping Duties:
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- Dumping is the practice of exporting goods at a price lower than the domestic market to increase one’s share of the global market.
- Anti-dumping duties are levied on imported goods if dumping harms domestic manufacturers of rival goods in the importing nation. It is a protectionist tariff
- These taxes are meant to make up for the gap between the export price and the typical worth of the items.
- Example: India has decided to impose anti-dumping duties on three Chinese products, namely wheel loaders, gypsum tiles, and industrial laser machinery.
- The purpose of these duties is to protect local manufacturers from the influx of cheap imports from China.
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Countervailing Duties:
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- Countervailing Duties (CVDs) are taxes imposed on imported goods to compensate for subsidies provided to producers of these commodities in the exporting country.
- CVDs are intended to level the playing field between domestic and foreign producers of a product, who can offer it at a lower price due to government subsidies.
- The WTO only allows countervailing duties to be imposed once the importing nation has performed a thorough investigation into the subsidized exports.
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