Chapter 1:INTRODUCTION: 1.1 Background

Chapter 1:INTRODUCTION
1.1 Background:
After the introduction of LPG (Liberalization, Privatization and globalization) in year

1991, the Indian economy has lifted the barriers of trade for various MNCs and other
foreign companies. This shaped India’s transition from planned economy to a market
economy. Along with this, the replacement of Monopolies and Restrictive Trade
Practices Act, 1969 with The Competition Act, 2002 further concretized the market
economy structure of India. And the new competition policy emphasized on the need of
promotion and sustenance of competition in the Indian market and ensuring all over
economic efficiency in wake of the liberalization policy. It aims at regulating competition
in the market and keeps a check on the anti-competitive practices such as abuse of
dominance, big rigging, predatory pricing, cartelization and mergers and acquisitions etc.
The opening up of markets posed a threat of competition to the domestic market. Now,
the foreign competition is not always ‘fair’ and ‘justified’ because of the simple reason
that India is still a developing nation and facing competition from already developed
economies would be unjustified. For the purpose of addressing the issue of possible
adverse effect of trade liberalization, the multilateral framework General Agreement on
Tariffs and Trade(GATT) for trade liberalization has a mention of contingency measures
of ‘anti-dumping’ for the purpose of safeguarding the interests of the domestic industry
from ‘unfair trade practices’ like ‘dumping’. Pursuant to the GATT, 1994, detailed
guidelines have been prescribed under the specific agreements which have also been
incorporated in the national legislation of the member countries of the WTO. Indian laws
were amended with effect from 1.1.95 to bring them in line with the provisions of the
respective GATT agreements.1 Until the 1980’s the Unites states, Australia, Canada and
EC were the main users of the anti-dumping duties.2 They were the main supporters of
the multilateral efforts to regulate the anti-dumping action, even though there were basic
disagreements between them and developing countries.
1
Anti-dumping- A guide, Directorate General of Anti-dumping and Allied Duties, Ministry of Commerce,
Government of India, p.1
2
SheelaRai, Anti-Dumping Measures under GATT and WTO, Eastern Book CO., p.392, 1st edition,2004
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After having a backdrop of competition policy in India and need of anti-dumping
measures, it is imperative to understand the meaning of ‘dumping’. Dumping is said to
have taken place when an exporter sells a product to India at a price less than the price
prevailing in its domestic market.3 In other words, for the purpose of GATT, a product is
to be considered as being dumped i.e. introduced into the commerce of another country
at less than its normal value, if the export price of the product exported from one country
to another is less than the comparable price, in the ordinary course of trade, for the like
product when destined for consumption in the exporting country.4 However, the
phenomenon of dumping is not condemnable per seas it is recognized that producers sell
their goods at different prices to different market. It is also not unusual for prices to vary
from time to time in the light of market variables of demand and supply. It is also
recognized that price discrimination in the form of dumping is a common international
commercial practice. Therefore, from the point of view of antidumping practices, there is
nothing inherently illegal or immoral about the practice of dumping. However, where
dumping causes or threatens to cause material injury to the domestic industry of India,
the Designated Authority initiates necessary action for investigations and subsequent
imposition of anti-dumping duties.
The use of anti-dumping law as a viable trade policy measure to protect domestic
industry together with the enactment of the Competition Act, 2002 to promote and sustain
competition in markets presents a unique policy challenge and is one of the more
important policy concerns facing India. Prima-facie competition law and antidumping
law may be at crossroads. While competition law is focused on the larger goal of
protecting and promoting competition in markets, antidumping law has a much narrower
focus, i.e. protecting the domestic industry. Given the divergence in the objectives of the
two sets of laws, it is important to analyze the possible ways in which the two may
interact and determine whether they are in conflict with each other. Particularly in light of
the fact the fact that the competition law regime in India is still evolving, it is imperative
3
Anti-dumping guidelines, http://commerce.nic.in/ visited on 13/04/2015
4
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994,
https://www.wto.org/ visited on 13/04/2015
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to understand the manner in which the Competition Act, 2002 may interact with the
existing antidumping law.
In India, there has been a prolific use of anti-dumping duties as a protectionist tool for the
domestic markets. In light of the ‘protectionist tool role’ of these duties, with this another
dimension of study is added which shall underline the misuse of it. There is no doubt that
they have been quite helpful in safeguarding the domestic producers but the Designated
authorities before levying these duties should keep in mind that it should not be used for
the purpose of driving away the foreign competition and in any form being detrimental to
the interests of the consumers at large. Like in case of China, a number of times anti-
dumping duties have been charged and often it is asked that does India specifically target
China for application of anti-dumping measures. Is it due to China’s non-membership of
WTO that India has so many anti -dumping cases against China? The simple answer to
this question is that, the anti-dumping investigations in India are conducted under the
national law as enshrined in the Customs Tariff Amendment Act, 1975, as amended in
1995, which is in consonance with the provisions of WTO. And those measures are
country neutral and the rules apply uniformly to China as to any other country. There is
no intention on the part of DGAD (Directorate General of Anti-dumping and Allied
Duties) or the Government of India to specifically target China for application of anti-
dumping measures. The principles and procedures prescribed under the law are fully
complied with in the cases involving China as in the cases involving other countries. 5
1.2Research Problem:
The idea is to study the interface of Competition and anti-dumping laws in Indian
perspective. The overlaps of these two laws crops up the confusions relating to
applicability and need of the same. The former one is pro-competitive and the latter is
anti-competitive in some areas. Therefore, an attempt has to be made to harmonize two of
them to fit in the economic structure without any possible dilemmas.
5
http://commerce.nic.in/ visited on 14/04/2015
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1.3Objectives of study:
The major objective is to understand the interaction of anti-dumping laws and

competition laws in an economy. To this end, the study seeks to analyze the following:
1. To understand the concepts of anti-dumping and competition laws along with their
rationale.
2. To analyze the position of these two laws in the developed economies like US and EU.
3. To discuss the interface between the substantive provisions and rules on procedures
under the two sets of laws.
4. To identify the conflicts and complementarities between antidumping and competition

law in terms of the conduct that they seek to regulate.
5. To highlight that has there been a misuse of the Anti-dumping in terms of a

protectionist tool?
6. To cull out the solutions for the harmonious applicability of the two laws in order to
strike a balance.
1.4 Methodology:
To do research on the given topic the non-empirical or doctrinal method is adopted.

Various primary data in the form of legislations of States, Judgments and Government
reports were used. Apart from the primary source some secondary sources are also used
such as books, articles, websites etc.
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Chapter 2: UNDERSTANDING THE CONCEPTS
2.1 What is Dumping?
Often, large manufacturers from abroad may export goods at a very low price as
compared to prices normally prevalent in the export market. Such dumping may be with
the intention to cripple the domestic industry or to dispose of their excess stock. This is
called ‘dumping’ an unfair trade practice. 6Dumping, in economic trade terms, is when a
country lowers the sales price of one of its exports for the express purpose of gaining
unfair market share in that industry in another country. The exporter usually lowers the
price below what it would sell for at home, and sometimes even below its actual cost to
produce. This is an unfair trade practice which has a distortive effect on the international
trade. Defined as the “the sale of the commodity on a foreign market at a price below
marginal costs’7
Dumping defined in the as sale of goods in foreign market at low price. 8
Haberler defined dumping as “the sale of goods abroad at a price which is lower than the
selling price of the same goods at the same time in the same circumstances at home,
taking account, of differences in transport costs”.
A product is to be considered as being dumped i.e. introduced into the commerce of

another country at less than its normal value, if the export price of the product exported
from one country to another is less than the comparable price, in the ordinary course of
trade, for the like product when destined for consumption in the exporting country.9
6
VS Datay,’ Customs law practice and procedure’, p. 46, Taxman Publication pvt. Ltd., 2013 edition
7
RavindraPratap, ‘India at the WTO Dispute settlement System’, p. 282. 1st edition,2004.
8
According to The Consice Oxford Dictionary
9
https://www.wto.org/visitied on 14 April, 2015
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2.1 Types of Dumping:
After considering the views of various economists, it can be inferred that there are four
types of dumping:
 Sporadic Dumping: As the term implies it means occasional and unforeseen trade
phenomenon .This type of dumping is usually used to dispose of the surplus
stocks at low prices in an unknown market. Usually, this will be for a short period
like at the end of every season, every producer will try to get rid of the surplus
unsold stocks at lower prices. Sometimes, the sellers are compelled to sell at a
lower price when the demand decreases in a highly capitalized industry, simply to
maintain output at full capacity.
 Intermittent Dumping: When the production of the product is more than the
demand in the home country, the stocks piled up even after sales In such case the
producer sells the remaining stock in the foreign countries at low price without
reducing the price in domestic countries. Such a situation is called intermittent
dumping.10
 Persistent or Continuous Dumping: When the monopolist sells the remaining
production in the foreign market at low prices continuously, it’s called persistent
dumping. This practice is motivated by the intent of maximizing the market share
in order to maintain the existing market or to acquire a new one. Most of the
countries believe that importing country benefits from the continuous dumping.
 Predatory Dumping: When the monopolist sells the product in the foreign market
at lower price initially with the view to drive away the competition and increase
the price after the competitors leave the market it’s called predatory dumping. 11
 Other types of dumping: Cyclical dumping12, market expansion dumping13, state
trading dumping14, strategic dumping15 and social dumping16.
10
S R Myneni, International Trade law, Allhabad Law agency, p.72, 2012, 2nd edition
11
S R Myneni, International Trade law, Allhabad Law agency, p.73, 2012, 2nd edition
12
I i.e. selling at lower prices because of over-capacity due a downturn in demand in the domestic market.
13
i.e selling at lower price in order to gain market share.
14
i.e selling at lower price in order to earn foreign exchange
15
i.e dumping upon an overall strategy including both low export pricing and maintain a closed home
market in order to reap monopoly and oligopoly profits.
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2.2 Why do firms dump?
After having an understanding of the concept of dumping the next question that flashes in
the mind is that what is the need to do so? What is the rationale behind it? To answer these
questions we would discuss the viewpoints of some of the exponents who gave their own
reasons for this practice. But in general, the basic and viable reasons for it are- to clear the
excessive stock, driving out competitors from the market and maximization of profits.
Garten advanced four major reasons for dumping:
i. Closed home market of exporters.

ii. Anti-competitive practices in the exporting country market which permits export
sales below cost,
iii. Government subsidization and
iv. Non-market conditions. 17
After appreciating the ideas of Garten, we can identify that his point of view says that if
the relevant authorities find dumping as harmful they should apply anti-dumping laws
and if there is some issue with respect to the competition then the competition laws
should be applied.
According to Hoekman and Kosteci18, dumping may occur in the following cases:
i. The exporters have to decide how much to produce before demand conditions or
exchange rates are known, or the exporters lack experience in pricing new
product. This is also called as sporadic dumping
ii. The exporter practices price discrimination in different markets that are separated
by market barriers to re-importation of the dumped product back to the exporters
home market.
16
i.e in which difference in wage standards, social security measures etc are responsible for an unfair
competitive advantage which the foreign exporter has over the domestic producer.
17
SheelaRai, Anti-Dumping Measures under GATT and WTO, Eastern Book CO., 1st edition,2004, p.2
18
Bernard M. Hoekman, Michel M. Kostecki, writers of the book- “The Political Economy of the World
Trading System: The WTO and Beyond”
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iii. If the demand is slack, it is perfectly rational for the firm to reduce prices to cover
only average variable cost in order to stabilize the production over the business
cycle and ensure job security. This is cyclical dumping.
iv. The firm prices its exports below production costs to minimize losses resulting
from excessive capacity which is maintained to deter entry by potential
competitors into its home market. This is called defensive dumping.
v. The firm prices its products below the production costs on a long-term basis to
realize economies scale or to attain full capacity utilization.
vi. The firm is trying to establish market share quickly. In that case, dumping may
also be an effective competitive strategy. 19
Effects of Dumping:
Dumping per se is not harmful but the degree and the frequency of dumping decides that
it has to be regulated or not. Even the GATT obligations do not render dumping as
harmful per se. 20Some of the effects are inherent in this practice which may be positive or
negative. We will now identify the possible effects of dumping on the exporting country
and importing country.
a) What are the effects of dumping on importing countries?
 The domestic industry faces a decline in demand and profits.

 If the dumping is for the longer period, it effects the survival of the industry and
also changes the industrial structure in the foreign currency. If the dumping
company increases the price at the later stage ( after eliminating competition
from the importing country) the importing country will be at loss both in terms of
high cost of imports and change in structure of domestic industry.
 Dumping changes the preferences of the consumers of industry. But, if dumping
is stopped after sometime, the country is forced to import at high prices.
 The importing country can benefit from dumping by imposing anti-dumping
tariffs.
19
K.D Raju, World Trade Organisation Agreement on Anti-dumping – A GATT and Indian Legal
Jurisprudence, p.7,Wolters Kluwer India Ltd, First Indian Reprint , 2008
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b) What is the effect of dumping on exporting countries?
 The consumers of the exporting country pay higher price when the consumers of
foreign country enjoy the products at lower prices.
 The exporting country finds market for the excess production.
 The exporting country earns foreign exchange and contributes to the surplus
balance of payment position. 21
21
S R Myneni, International Trade law , p.73,Allahabad Law agency, 2012, 2nd edition
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2.3 Anti-dumping
The practice of dumping is followed by the imposition of anti-dumping duties, they are
levied by the importing country if it’s of the view that the goods are being dumped in the
country. These duties are imposed when dumping is proved and it shows a material injury
to the ‘domestic market’ of the importing country. Duties are imposed on a source specific
basis and can be expressed either on ad valorem or specific basis.22 These duties were
developed by developed countries to protect their domestic markets against the low-priced
imports. Until the 1980’s the Unites states, Australia, Canada and EC were the main users
of the anti-dumping duties.23 They were the main supporters of the multilateral efforts to
regulate the anti-dumping action, even though there were basic disagreements between
them and developing countries.
As stated above, dumping is not per se prohibitive its adverse effect on the domestic
market makes it problematic and hence, attracts anti-dumping duties.Article VI of the
GATT stipulates that ‘in order to offset or prevent dumping a contracting party may levy
on any dumped product an antidumping duty not greater in amount than the margin of
24
dumping in respect of such countries’. The ADA (Agreement on Anti-dumping)
mandates the satisfaction of the following criteria before the imposition of duties:
 The imported goods must be ‘dumped’, or sold at prices less than the normal
value;
 The dumped imports must cause or threaten to cause material injury to the
domestic import-competing industry;
 There is a clear and casual link between injury to the domestic industry and
dumping.25
22
http://commerce.nic.in/traderemedies/Anti_Dum.pdf visited on 19 April 2015
23
RaiSheela, Anti-Dumping Measures under GATT and WTO, Eastern Book CO., 1st edition,2004, p.392
24
AradhnaaggarwalAnti dumping law and practice: an indian perspective , working paper, published by
Indian council for research on international economic relations , April, 2002
25
Jurisprudence,p.35,Wolters Kluwer India Ltd, First Indian Reprint , 2008
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Need of Anti-dumping duties:
26
Anti-dumping is not so much of a revenue measure, as it is a trade remedy measure. It
is believed that anti-dumping duties protect the domestic producers in the short run and
the consumers in the long run. This can be understood in a way that it provides temporary
relief to the domestic producers who feel that certain dumping of articles is causing
material injury to the market and on the other hand it also protects the consumers in the
long run because the foreign exporters after acquiring a considerable market share in the
economy and making consumers dependent on their products tend to increase the prices
at the later stage.
The above mentioned justification is a general one. To be more specific about the need of
anti-dumping duties, we should understand the viewpoints of the exponents of different
schools of thought in this respect. These schools consider anti-dumping as:
 A response to unfair trade

 Special protection
 A strategic weapon27
The very first school of thought justifies it to be a protection against unfair trade.
According to them, the anti-dumping duties are imposed as a response to the unfair trade
practices by the exporters. In an Indian case, SS Enterprises v. Designated Authority’28
, it was observed that purpose of imposition of anti-dumping duties is to curb unfair trade
practices resorted to by the exporters of a particular country of flooding the domestic
market at rates lower than the normal selling price of the same goods in their own
country, so as to injure the domestic market. The second school perceives it to be a tool
to provide special protection to the domestic producers, anti-dumping measures act as a
safeguard mechanism for them from international competitors. The third school explains
that it is essentially a strategic weapon; there have been numerous instances where the
anti-dumping protection has been granted to the politically significant countries or
26
ChottulalDagav. CC (2008)226 ELT 516 (CESTAT)
27
Raju K.D, World Trade Organisation Agreement on Anti-dumping – A GATT and Indian Legal
Jurisprudence, , p.7,Wolters Kluwer India Ltd, First Indian Reprint , 2008
28
SS Enterprises v. Designated Authority’,AIR 2005 SC 1527
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developed economies. The countries use the anti-dumping protections form a ‘club’ and
tend to apply anti-dumping against one another rather than ‘non-club’ members. 29 In
Reliance Industries Ltd. v. Designated Authority30, it was observed thatthe concept of
anti-dumping is founded on the basis that a foreign manufacturer sells below the normal
value in order to destabilize domestic manufacturers. Dumping, in short term, may give
some transitory benefits to local consumers on account of low priced goods, but in long
run, it destroys the local industries and may have a drastic effect on prices in the long run.
As it has to be kept in mind that trade liberalization is also important to be observed,

international communities have kept in mind that only that amount of duty is to be levied
which is required to save the domestic market. It’s also called as Lesser Duty Rule- under
the GATT provisions; the national authorities cannot impose duties higher than the
margin of dumping. It is, however, suggested that it would be desirable if theappropriate
Government authorities impose a lesser duty which is adequate to remove the injury to
the domestic industry. Under the Indian laws, the Government is obliged to restrict the
anti-dumping duty to the lower of the two i.e. dumping margin and the injury margin. 31
29
M.J Finger in his book “Anti-dumping: How it works and who gets hurt”, 1993, university of Michigan
press, p.6
30
Reliance Industries Ltd. v. Designated Authority ,2006 (202) ELT23 (SC)
31
http://commerce.nic.in/traderemedies/Anti_Dum.pdf visited on 19th April,2015
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2.4 Competition Laws
The evolution of competition laws has been for the purpose of promoting competition
and regulating the anti-competitive practices such as cartels, predatory pricing, abuse of
dominant position etc .The developed nations have already been familiar with the
application of these laws and there has been a lot of jurisprudential development. The
competition related legislations across different jurisdictions, most modern competition
laws seek to address the issue of anti-competitive practices (broadly as manifested in
anti-competitive agreements and abuse of dominant position) and combinations ( as
manifested in mergers, acquisitions etc.).
In India, the idea of promoting competition and curbing monopolies was perceived by
the Indian government after the introduction of LPG (Liberalization, Globalization and
Privatization) in 1991, wherein Indian markets opened doors to foreign companies and
MNCs etc. to enter. As a natural consequence of this the Indian market has to be geared
to face the competition from within and outside the country. The Monopolies and
Restrictive Trade Practices Act, 1969 has become obsolete in light of the international
economic developments so the need was felt to shift the focus from curbing monopolies
to promoting competition. With the introduction of competition laws in Indian markets
the need was felt to regulate and control competition. The promotion, regulation and
sustenance of competition in markets was done by introduction of an enactment called
Competition Act, 2002, it covered three major areas: The anti-competitive agreements,
abuse of dominant position and combinations and its regulation. The regulation of all
these activities was vested in a commission called as Competition Commission of India
which shall be constituted by the Central Government as provided under the Act.
Need of Competition laws for free and fair trade?
Competition refers to the efforts of two or more commercial businesses to secure the
same business from third parties. Fair competition means a just, open, and equitable
competition between business competitors. Many countries enforce fair competition laws.
The U.S. antitrust laws aim to prohibit agreements or actions that reduce competition and
harm customers. A healthy competition can improve a country’s economic performance,
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open business opportunities to its citizens and reduce the cost of goods and services
throughout the economy. 32
After the advent of liberalization, it has become imperative for the developing countries
like India to appreciate the idea free and fair competition to exist in the market. The
Competition laws take care that the traders do not face any problem in having free access
to the markets and any kind of anti-competitive behavior from the fellow traders. The
practices like predatory pricing, cartelization, abuse of dominance, bid rigging etc., are
the major hindrances in the free flow of trade and fair competition in the market.
So, we can say that competition laws play a very important role in regulating and
promoting free and fair trade in the economy.
32
http://definitions.uslegal.com/f/fair-competition/ visited on 19 April 2015
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Chapter 3:ANTI- DUMPING LAWS: POSITION IN INDIA AND OTHER
JURISDICTIONS.
3.1 Anti-dumping Laws in other Jurisdictions:
To have a better understanding, we would study the position of anti-dumping laws in

other jurisdictions and their position in India as well. The jurisdictions which will be
discussed are:
 US
 European Union
1. U.S.-
Dumping:
Dumping occurs when a foreign producer sells a product in the United States at a price
that is below that producer's sales price in the country of origin ("home market"), or at a
price that is lower than the cost of production. The difference between the price (or cost)
in the foreign market and the price in the U.S. market is called the dumping margin.
Unless the conduct falls within the legal definition of dumping as specified in U.S. law, a
foreign producer selling imports at prices below those of American products is not
necessarily dumping. 33 The anti-dumping laws in US are governed by the Antidumping
Act of 1921.
Governing Bodies:
The International Trade Administration (ITA) of the U.S. Department of Commerce is

the “administering authority” with overall responsibility for enforcing anti-dumping laws,
and specific responsibility for determining whether the goods under investigation are
being dumped. The International Trade Commission (ITC), an independent federal
agency, determines whether the U.S. domestic industry producing that class of products
is either injured or threatened with injury by reason of the subject imports. The two
33
http://enforcement.trade.gov/intro/index.html visited on 20April , 2015
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agencies perform their responsibilities simultaneously and notify each other of any
determinations.
The domestic firms can file an antidumping petition under the regulations determined by
the U.S Department of Commerce, which determines "less than fair value" and the ITC,
which determines "injury". These proceedings operate on a timetable governed by U.S.
law. The International Trade Commission considers all relevant economic factors,
including the domestic industry's output, sales, market share, employment, and profits.
If both Commerce and the International Trade Commission make affirmative findings of
dumping and injury, Commerce instructs U.S. Customs and Border Protection to assess
duties against imports of that product into the United States. The duties are assessed as a
percentage of the value of the imports and are equivalent to the dumping and subsidy
margins. 34
Initiation:
The anti-dumping investigations are initiated on the basis of a petition requesting an

investigation, filed by an interested party or parties. Petitions are filed simultaneously
with Commerce and the ITC. “Interested parties” may include:
1. a manufacturer, producer or wholesaler in the United States of a like product;

2. a certified or recognized union or group of workers that is representative of an
industry engaged in the manufacture, production or wholesale in the United
States of a like product; or
3. a trade or business association, a majority of whose members manufacture,
produce or wholesale a like product in the United States.
Investigation:
An investigation proceeds as follows:
34
http://enforcement.trade.gov/intro/index.html visited on 20 April 2015
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 Within 20 days of the filing of a petition, Department of Commerce (hereinafter
referred as commerce)determines whether there is sufficient evidence of injurious
dumping to warrant an investigation. Commerce has found very few petitions to
be insufficient at the initiation stage. The deadline may be extended to 40 days if
it is necessary for Commerce to determine whether there is sufficient industry
support for the petition.
 If the petition is accepted, the ITC conducts a preliminary investigation to
determine whether there is a reasonable indication of material injury. The
preliminary determination must normally be issued within 45 days of the date of
filing.
 If the ITC preliminary determination is affirmative, Commerce makes a
preliminary determination of whether dumping is occurring. The preliminary
determination must be released within 160 days after a filing or 140 days after an
investigation is initiated, whichever is later. Extensions may be requested by
interested parties. If the determination is affirmative, Commerce establishes
preliminary dumping margins, resulting in the application of provisional duties.
The ITC then commences its final injury investigation.
 Commerce issues its final determination 75 days after issuing the preliminary
determination (or after 135 days upon the request of an exporter when the
preliminary determination was affirmative, or of a petitioner when the
preliminary determination was negative).
 The ITC final injury determination must be released before the 120th day after
Commerce makes its affirmative preliminary determination or the 45th day after
Commerce makes its affirmative final determination, whichever is later.
 If both dumping and injury are found, an anti-dumping duty order is issued by
Commerce within 7 days of notification by the ITC of its decision.
 Each year on the anniversary of the issuance of an order, the parties have an
opportunity to request an administrative review of the dumping margins for the
most recent annual period.35
35
http://www.international.gc.ca/ visited on 19 April , 2015
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Evidence:
The information needed to determine whether dumping exists, and to what degree, is
obtained by sending importers and exporters requests for information or questionnaires.
If a respondent is unable or unwilling to provide the information requested by
Commerce or the ITC within the set time limits and in the form requested, the agencies
may rely on the “facts available” Issues sometimes arise as to whether a particular
product is included within the scope of an anti-dumping investigation. In such cases,
Commerce may issue “scope rulings” that clarify the scope of an order with respect to
particular goods.
The rulings are intended to ensure that the imported goods are being compared to
similar U.S.-produced goods or “like products.” A “like product” is defined by the
Tariff Act of 1930 as “a article subject to an investigation.”36
Normal Value
For the purpose of identifying that the goods are being dumped or not it becomes
imperative to identify the margin between the ‘Export Value’ and ‘Normal Value’.
Normal value is based on the ex-factory prices, its calculated by reducing the following-
packing costs, warehousing expenditure, transportation costs, indirect taxes, loyalty
discounts,etc.
Export Price
Export price is the price at which the subject merchandise is first sold (or agreed to be
sold) before the date of importation by the producer or exporter outside the United States
to an unaffiliated purchaser in the United States or an unaffiliated purchaser for
exportation to the United States. In order to calculate ex-factory export price its required
that the price should be reduced by movement expenses, import duties and taxes,
countervailing duties and discounts and rebates.
36
http://www.international.gc.ca/ visited on 20 April , 2015
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Calculation of Dumping Margins:
To determine whether a dumping margin exists, Commerce subtracts the weighted-

average export price from the weighted-average normal value for the like merchandise.
Any positive difference serves as the basis for a dumping margin, which is then averaged
on a weighted basis to find one estimated margin amount for all sales to the United States
during the period of investigation. The De Minimis Margins concept, in accordance with
Article 5.8 of the Anti-Dumping Agreement, the Tariff Act of 1930 has been amended to
provide that a dumping margin found to be less than 2% ad valorem will be considered to
be de minimis and will be disregarded. Commerce, however, has interpreted Article 5.8
as applying only to original investigations. For reviews, until January 1, 2000, Commerce
retained the practice of considering a margin to be de minimis only if it is below 0.5% ad
valorem. 37
ITC Injury Analysis:
The role of the ITC in anti-dumping investigations is to determine whether the U.S.
domestic industry producing like products is materially injured or threatened with
material injury, or whether the establishment of an industry in the United States is
materially retarded by reason of the subject imports.The ITC determination of injury
involves a two-pronged inquiry: first, with respect to the fact of material injury; and
second, with respect to whether the dumping is a cause of material injury or threat
thereof. For the above said determination of injury, it has been directed by the statute to
consider various factors- the volume of imports, the effect of imports on the price of
goods in U.S markets etc. but it’s not restricted to these factors, it can keep in mind other
factors as well according to the cases.
37
http://www.international.gc.ca/ visited on 20 April, 2015
Page | 19
Reviews:
There are various types of reviews which are prevalent under the U.S anti-dumping laws:
1. Administrative review-
This review of anti-dumping order is done after a period of 12 months from the date of
effect of the order.The administrative reviews determine actual duty owing for the period
under review, and establish an estimated duty deposit rate for future entries.
2. Changed Circumstances Reviews
A party subject to a final anti-dumping duty order or suspension agreement can seek its
removal by establishing that there are changed circumstances in the U.S. industry
sufficient to warrant the revocation of the anti-dumping order or suspension agreement.
The ITC must determine whether the revocation of the order or termination of the
suspended investigation is likely to lead to the continuation or recurrence of material
injury. The party seeking the revocation has a burden of persuasion and must convince
the ITC and Commerce that revocation is appropriate.38
3. Five year ‘sunset’ reviews-
It is one of the mandatory requirements of the WTO Agreement, which requires the
member states to review the levied anti-dumping duties after the expiry of five years.39
The U.S AD Laws also stipulate that Commerce and ITC must review the anti-dumping
order after every five years.
4.Changed Circumstances Review
The party which is subject to the Anti-dumping duties can seek its removal by
establishing that there has been change in circumstances and the US market is no more
being adversely affected by his imports. The party seeking the revocation has a burden of
persuasion and must convince the ITC and Commerce that revocation is appropriate.A
changed circumstances administrative review is to be conducted upon receipt of a request
38
http://www.international.gc.ca/ visited on 20 April 2015
39
Artcle 11.1 of WTO AD Agreement,
Page | 20
containing sufficient information concerning changed circumstances. 40 Commerce’s
regulations permit the ITC to conduct a changed circumstances administrative review
based upon an affirmative statement of no interest from the petitioner in the proceedings.
Commerce may also revoke an order, or revoke an order in part, if it determines that the
order under review is no longer of interest to interested parties.
An Analysis of USA’s Anti-dumping laws and Competition Laws :
The US (Antidumping Act, 1916) antidumping laws across all the subject countries of
WTO do not seem to (directly) address the issue of ‘predatory pricing’. It is pertinent to
note that the US’s Antidumping Act of 1916 was targeted at ‘predatory pricing’; however
the Antidumping Act of 1921(which is the existing antidumping legislation in the USA)
does not contain any such explicit reference.
It is a basic principle of US antitrust law that antitrust laws should protect competition,
not competitors. The fact that a particular competitor is injured by a practice does not
mean that the practice is or should be prohibited. In fact, for a competition to exist there
has to be some who are heading ahead of others. The historic goal of the antitrust laws is
to protect economic freedom and opportunity by promoting competition in the
marketplace. The US antitrust regime aims at protecting the vitality of the market
economy by imposing rules that assure that the competitive struggle will be fairly
waged.41
By and large the anti-dumping and competition law in the US is carried on

simultaneously because they do not have the protectionist attitude for competitors rather
they protect competition. So it can be said that US have an anti-dumping policy
structured in accordance with the WTO ADA but it applies it only when there is a
considerable injury to the domestic producers.
40
Section 75(b)(1) of the U.S Tariff Act of 1930
41
http://www.cci.gov.in/images visited on 21 April , 2015
Page | 21
 European Union:
Dumping:
A product is to be considered as being dumped if its export price to the Community is

less than a comparable price for the like product, in the ordinary course of trade, as
established for the exporting country. 3. The exporting country shall normally be the
country of origin. However, it may be an intermediate country, except where, for
example, the products are merely transshipped through that country, or the products
concerned are not produced in that country, or there is no comparable price for them in
that country. 42
Governing Bodies:
The governing body for the application of anti-dumping laws in European Union is the
European Commission. And the legislation governing the same is called as COUNCIL
REGULATION (EC) No 1225/2009 of 30, November 2009 on protection against
dumped imports from countries not members of the European Community. It
encapsulates the proper procedures and regulations regarding AD measures.
Initiation:
Proceedings are initiated upon a written complaint by any natural or legal person, or any
association not having legal personality, acting on behalf of an EU industry. Where, in
the absence of any complaint, an EU country is in possession of sufficient evidence of
dumping and of resultant injury to the EU industry, it shall immediately communicate
such evidence to the Commission.
The complaint must include evidence of dumping, injury and a causal link between these
two elements. It shall contain such information on the following:
 the identity of the complainant and a description of the volume and value of the
EU production concerned;
42
Article 1, COUNCIL REGULATION (EC) No 1225/2009 of 30 ,November 2009 on protection against
dumped imports from countries not members of the European Community.
Page | 22
 a complete description of the allegedly dumped product, the country of origin, the
identity of each known producer/exporter and importer;
 information on prices at which the product in question is sold when destined for
consumption in the domestic markets of the country of origin or export, export
price of the product;
 Information on changes in the volume of imports of the product concerned and

effect of those imports on prices of the like product in the EU.
The complaint is considered to have been made by or on behalf of the EU industry if it is

supported by those EU producers whose collective output constitutes more than 50 % of
the total EU production.
The complaint is examined by an advisory committee, which consists of representatives

of each EU country, with a representative of the Commission as chairman. If this
consultation reveals that the complaint does not contain sufficient evidence to justify
initiating a proceeding, the complaint is rejected and the complainant duly informed.
Where, after consultation within the committee, it is apparent that there is sufficient
evidence to justify initiating a proceeding; the Commission must do so within 45 days of
the lodging of the complaint. The Commission publishes in the Official Journal of the
European Union a notice of initiation of the investigation, indicating the product and
countries concerned, giving a summary of the information received and stating the period
within which interested parties may make themselves known and present their views.
The complaint may be withdrawn prior to initiation of the investigation. 43
Investigation:
The Commission has 45 days to examine the complaint, consult EU Member States and
decide whether or not there is enough evidence to merit a formal investigation.
43
http://europa.eu/legislation_summaries/ visited on 21 April , 2015
Page | 23
An investigation normally takes 15 months. During this period, the Commission
investigates the matter in depth (comparing and verifying on-the-spot data provided by all
participating parties), and consults further with EU Member States.
Within 9 months, the Commission generally imposes provisional duties. These duties
consist in the provision of bank guarantees for the value of the duties that importers must
provide when importing the product. Thereafter, the EU Council of Ministers has the
authority to decide whether to impose definitive duties and order the collection of the
provisional duties.
Definitive duties are valid for five years before they expire. If, however, EU producers
demonstrate that the removal of duties is likely to lead to further dumping and the
renewed imposition of duties, the Commission may reopen its investigation (an “expiry
review”), and extend the protective measures beyond the initial five year period.44
Injury45
The application of any anti-dumping duty presupposes the presence of a second key
element: significant material injury to an EU industry, be it injury caused to an industry
established in the EU, the threat of injury or substantial retardation of the establishment
of such an industry.
The determination of injury must be based on positive evidence and involve an objective
examination of the following elements:
 the volume of the dumped imports, particularly where there has been a significant
increase, either in absolute terms or relative to production or consumption in the
EU;
 the price of dumped imports, in particular to determine whether there has been
significant price undercutting as compared with the price of a like product of the
44
http://www.nortonrosefulbright.com/ visited on 21 April 2015
45
Page | 24
EU industry, or whether the effect has been to depress prices or prevent price
increases;
 the consequent impact on the EU industry concerned, particularly in relation to

production and utilisation of capacity, stocks, sales, market share, price changes,
profits, return on investments, cash flow and employment.
Moreover, the effect of the dumping must be assessed in relation to the production of the
like product by the EU industry, taking into account the narrowest production sector.
The term EU industry covers EU producers as a whole or those of them whose collective
output constitutes a major proportion of the total EU production. However, when
producers are themselves importers of a dumped product, EU industry may be interpreted
as referring to the other producers in this sector.
For the adoption of measures, such as provisional or definitive duties or the termination
of an investigation, the Commission is assisted by a trade defence committee. This
committee comprises representatives of the Member States and is chaired by the
Commission. The committee serves as a forum of discussion between the Commission
and Member States and the most satisfactory solution is always sought. When the
Commission wants to take a decision, the committee is always asked to deliver an
opinion. In case of most important decisions, such as imposition of duties, the committee
may even block the Commission's proposal. 46
Dumping Margin47
The dumping margin is the amount by which the normal value exceeds the export price.
The comparison is made between sales at the same commercial stage and on dates which
are as close to each other as possible. The necessary adjustments are made to take
account of differences in sales conditions, taxation and other differences which affect
price comparability.
46
http://eur-lex.europa.eu/ visited on 21 April 2015
47
Article 2 (D), COUNCIL REGULATION (EC) No 1225/2009 of 30 ,November 2009 on protection
against dumped imports from countries not members of the European Community.
Page | 25
Export Price:48
The export price shall be the price actually paid or payable for the product when sold for
export from the exporting country to the Community. In cases where there is no export
price or where it appears that the export price is unreliable because of an association or a
compensatory arrangement between the exporter and the importer or a third party, the
export price may be constructed on the basis of the price at which the imported products
are first resold to an independent buyer, or, if the products are not resold to an
independent buyer, or are not resold in the condition in which they were imported, on any
reasonable basis.
Imposition of definitive anti-dumping duties49
Where the facts as finally established show that there is dumping and injury caused
thereby, and the Community interest calls for intervention in accordance with Article 21,
a definitive anti-dumping duty shall be imposed by the Council, acting on a proposal
submitted by the Commission after consultation of the Advisory Committee.
The duty must be imposed on a non-discriminatory basis on imports of a product found to

be dumped and causing injury. The regulation imposing the duty specifies the amount of
duty applied to each supplier or, if that is impracticable, to the supplying country
concerned.
Provisional and definitive duties may not be applied retroactively. However, a definitive
duty may be levied on products which were entered for consumption not more than
90 days prior to the date of application of the provisional measures.50
48
Article 2 (B), COUNCIL REGULATION (EC) No 1225/2009 of 30 ,November 2009 on protection
49
50
http://europa.eu/ visited on 21 April 2015
Page | 26
Community Interest 51
The term ‘Community industry’ is referred to the Community producers as a whole of the
like products or to those of them whose collective output of the products constitutes a
major proportion. Anti-dumping measures may not be applied if it is concluded that their
imposition is not in the EU interest. To this end, all the various interests are taken into
account as a whole, including the interests of the EU industry and of the users and
consumers. All the parties concerned are given the opportunity to make their views
known.
Reviews:52
An anti-dumping measure only remains in force as long as is necessary to counteract the

dumping which is causing injury. The duties expire five years after their date of
imposition or five years after the conclusion of the most recent review of the measures
concerned. This review is carried out on the initiative of the Commission or at the request
of the EU producers. The duties shall remain in force during the period of the review.
Refund of duties53
Duties collected may be refunded where the importer can show that the dumping margin
has been eliminated or reduced to a level below the anti-dumping duty. The importer
must request a refund within six months of the date on which the amount of the definitive
duties to be levied was duly determined or within six months of the date on which a
decision was made definitively to collect the provisional duties. The application must be
submitted via the EU country in which the product was released for free circulation. The
EU country shall forward the application to the Commission, which comes to a decision
after consultation of the Committee.54
51
52
53
Article 11 (8), COUNCIL REGULATION (EC) No 1225/2009 of 30 ,November 2009 on protection
54
http://eur-lex.europa.eu/ visited on 21 April 2015
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Competition Laws and Anti-dumping Laws in EU
There is a well-developed jurisprudence with respect to the competition and anti-duming

laws in the European communities. In EC, they have concluded various way outs to
nullify or reduce the effect of anti-dumping on competition. In cases where investigation
is opened and commission finds out that there is dumping which causes injury, there are
two options open:
 Direct leverage of anti-dumping duties.

 Undertakings given by exporters
The first option is self-explanatory in nature. The need and importance is of the second
one as it talks about the undertakings to be given by exporters in order to the commission
with respect to the price so that the predatory pricing is avoided and price is maintained
in the domestic market.
Undertakings given by exporters:
After being identified as the exporters who are dumping the goods in EC are generally
required to give price related undertakings pursuant to which they undertake not to export
the product in question to EC directly or indirectly through a subsidiary branch at a price
lower than the undertaken price. This has the inclusion in the Article 8 of the WTO
Agreement on Anti-dumping.
Such undertakings have effect on competition and that is their very purpose. And the
effect of such a practice is that the exporters are bound by undertakings are no longer able
to lower their export prices below their threshold fixed by the undertaking, atleast as long
as they respect the undertaking. Thus, the community producers can fix their prices
below the threshold fixations from the danger of being outbid by the exporters concerned.
The exporters are then no longer to compete with the community industry with respect to
the prices.55
55
http://www.jstor.org/ visited on 22 April 24, 2015
Page | 28
Anti-dumping Measures in Uncompetitive markets.
The first EEC Anti-dumping Regulation 1968 contained expressed reference to the
degree of competition between the community producers themselves as one of the factors
to be taken into consideration while assessing injury. 56 Though this wasn’t included in the
later regulations but this doesn’t mean that it should not be taken into consideration.
Competition between the community producers rather lack of such competition poses a
problem if:
 There is an agreement between the community producers restricting competition.

 One or several community producers are dominating.
a) The concerted practices of domestic producers.
A parallelism in the anti-dumping and competition proceedings may be witnessed while

defining injury. But the injury must be established within the meaning of Article 4(1) of
the Council Regulation for anti-dumping. It means injury to a community industry
working in a normal competitive environment.
Under Article VI of the GATT Anti-dumping Code57, anti-dumping measures should not
be imposed as a protecting instrument against unfair trade practices in an environment
where trade is basically free and all companies can compete.
In case of Sodium Carbonate Originating in Soviet Union58, the decision was made not to
impose the anti-dumping measured with respect to the dense sodium carbonate based on
a part of the fact that supply of dense sodium carbonate in the community was subject to
strengthen the contractual ties between community producers and main consumers. This
was already being investigated by the community as possibly restraining competition in
dense sodium carbonate market though these anti-trust proceedings ended soon.
56
Council Regulation (EEC) No. 459/68, 5.4.1968 O.J EC 1968 Spl. Edititon L 73/1 at Atr. 4(3)
57
Agreement on Implementaion of the Article VI of the GATT, 12.4.1979,O.J EC 1980 L71/90
58
Council Regulation(EEC) No. 407/80, 18.2.1980, O.J EC 1980 L 48/1
Page | 29
b) Market dominating domestic producers
It is imperative to understand whether interest of the community call for investigation to

prevent injury to the community producers who are in a market dominating position. This
was the case in Glycine Originating in Japan,59 basically consumers could either buy it
from the community producers or from Japanese producers. The commission concluded
that it was necessary in the community interest to take protectionist measures.
After considering the ideas of EU for dealing with the issues relating to anti-dumping and
competition laws we can conclude that they have a kind of structured way of dealing with
it. But there is still a scope of improvement in it.
59
Glycine originating in Japan (1984)
Page | 30
An Analysis of the Anti-dumping Laws in other jurisdictions:
Stated Aims The US The EC India WTO’s

ADA
Remedying the injury Yes Yes Yes Yes

Caused to the domestic
Industry due to dumping
Community or Public
Interest No Yes No No
Addressing Predatory Yes

Pricing (Anti- No No No
dumping
Law of
1916)
Consumer Welfare No Yes No No
Page | 31
3.2 The Nuts and Bolts of the WTO Anti-dumping Agreement
The World Trade Organisation Agreement on Anti-dumping consists of the anti-dumping

measures to be followed by the member nations in case they identify dumping is
happening in their country. All the members are bound by this agreement. It mentions the
definition of dumping, injury, determination of injury, threat of injury, like products, the
procedures involved, definition of domestic industry etc. all have been mentioned at
length. There have been some changes in the agreement after the Uruguay Round – the
major one was the introduction of the sunset clause which requires that all anti-dumping
actions will be reviewed and terminated after five years. By and large, in the following
text an attempt has been made to highlight the main features and inclusions in the ADA.
The ADA requires that the following criterian must be satisfied before the Anti-dumping
duties are imposed:
 The goods which have been imported must have been ‘dumped’, or should have
been sold at prices less than ‘normal value’;
 The dumped goods must cause or threaten to cause material injury to the domestic
industry of the nation
 There should be a casual and direct link between the injury and domestic market.
1. Determination of Dumping:
Article 2 of the ADA spells out the most important part of the agreement because it deals
with the determination of dumping. The very basic idea of this agreement is to identify
that when the goods are being dumped into the domestic market of a country.
A product is considered as dumped, if the export price is less than the comparable
price, in the ordinary course of trade, for the like product in the exporter’s
domestic market. 60
A comparison must be made between the export price of the product and the ‘normal
value’ of the like product in the exporting country. If the export price is lesser than the
60
Article 2 of the WTO Agreement on Anti-dumping
Page | 32
normal value, the product is considered as dumped. And the difference between two is
the ‘dumping margin’.61
A comparison of these prices is made at the same level of the trade, normally at the ex-
factory level, and in respect of the sales it is made as much as possible at the same time.
2. Determination of injury and casual relationship:
One of the basic requirements mandated by the Article VI of the GATT and Tokyo
Round is that for the leverage of the anti-dumping duties is that the country initiating the
anti-dumping duties must demonstrate that such dumping has caused or threatened to
cause injury to the domestic market. The ADA has almost same provisions. In
determining the injury to the domestic industry by the dumped goods, the investigating
authorities are required to examine the volume if the imports, the effect of the imports on
the prices in the domestic market and the consequent impact on the domestic industry,
they have to basically take into consideration allt the relevant economic factors before
deciding it.
The term ‘injury’ shall, unless otherwise specified , be taken to mean material
injury to a domestic industry, threat of a material injury to a domestic industry or
material retardation of the establishment of such an industry shall be interpreted
in accordance with the provisions of this Article.62
It basically highlights that determination of injury should be based on ‘positive injury’

and should have a detailed examination of the volume of dumped imports. The effect
should be severe so as to effect whole of the industry, injury to a single firm is not
sufficient for such determination.
3. Threat of Injury
The concept of threat of injury is based on the idea that when the domestic producers
initiate a complaint with respect to the dumping of goods, they claim that if the anti-
61
Jurisprudence, Wolters Kluwer India Ltd, First Indian Reprint , 2008, p.36
62
Article 3 of the WTO Agreement on Anti-dumping
Page | 33
dumping measures are not taken then there is a threat of ‘material injury’ to their market.
The determination of injury cannot be based on mere allegation by the domestic
producers. Rather, a ‘threat of injury’ can be ascertained where there is:
 A significant increment in the dumped articles

 A potentially significant depressing or suppressing effect on the domestic prices
because of the increased risk of dumped imports.
 A significant increase in inventories of the dumped product.
There cannot be a exhaustive list so the national authorities have been given the freedom
to make additions to this list according to their convenience and need.
4. Like Product:
This issue has always been in conflict as it is bound to have some controversies. The
categorization of the product is a very crucial step, as it sets the foundation for the further
investigation to take place. The ADA defines ‘like product’ as:
‘Like product shall be interpreted to mean a product, which is identical i.e., alike
in all respects to the product under consideration, or in absence of such s
product, another product although not alike in all respects, has characteristics
closely resembling those of the product under consideration.’63
This concept of ‘like product’ was examined in the case of New Zealand- Imports of
Transformers from Finland64. In this cast the panel held that ‘ the New Zealand
transformer industry which produces the whole range of transformers… was not affected
by the imports from Finland.’ There was a narrow interpretation of the ‘ like product’.
In Japanese Liquor Taxes II case 65, a drink named sochu was foind to be like product
when compared with vodka. The broad definition can always lead to finding of the ‘like
product’ and consequently, the imposition of the anti-dumping duty.
63
Article 2.6 of the WTO Agreement on Anti-dumping
64
New Zealand- Imports of Transformers from Finland, GATT , Basic Instruments and Selected instruments
, 32nd supplement, 1985, para 4.4
65
Japanese Liquor Taxes II case AB 1996-2
Page | 34
5. Domestic Industry:
It is important to identify that what is the relevant domestic industry which is being
affected by the dumping of goods. The domestic producers are defined as producers of
the like products,’ or the whole collective output of the products that constitute a ‘major
proportion’ in the total domestic product.66
The most important exclusion while assessing domestic producers are those who are
themselves involved in the importation of the dumped goods in question. But these
exclusions are to me made purely at the discretion of the national investigating
authorities.
6. Initiation of Investigations:
Any AD investigation shall be based on the written request by or on behalf of the

industry affected.67 And the complaint should contain sufficient evidence of dumping,
potential injury and casual link. The ADA doesn’t have special mention of the procedures
to be followed and consequently the national governments decide the procedures related
to initiation of investigation on their own.
Adequacy of evidence is quite essential for the initiation of the proceedings68 and
application regarding initiation of investigation should be supported by domestic
producers whose collective output constitutes more than 50% of the total production of
the ‘like product’ produced by that proportion of domestic industry. 69
7. De Minimus dumping margin and rejection of Applications:
This is a novel addition to the ADA, this principle explains that if the investigating
authorities are of the view that there are insufficient evidence to prove dumping or injury,
or if dumping margin id de minimusi.e., dumping margin is less than 2% or injury is
otherwise negligible, then the application can be terminated or rejected immediately.
66
Article 4.1 of the WTO ADA which defines domestic industry
67
66
69
Page | 35
8. Procedures in investigation:
The procedures to be followed and the evidentiary requirement for an anti-dumping

initiation have been mentioned in the Artile 6 of the ADA.
They consist of:
 Notice of, opportunity to defend and treatement of confidential information;

 Verification of information by the authorities and use of ‘facts available’
provision when the party doesn’t respond adequately.
 Disclosure of the factual basis of a decision
 Sampling of exporters in case of many parties involved in a dispute.70
9. Provisional Measures:
Article 7 of ADA encapsulates a striking provision of provisional measures which can be

taken during the investigation process of anti-dumping. As soon as the domestic
authorities come across a positive evidence in a specified case and if itsimportant to
protect the domestic industry during this period of investigation, it may impose
provisional measures, they may be in the form of cash deposit or a bond.
10. Price Undertaking:
Article 8 provides for an escape for the exporters from the anti-dumping duties as it
introduces a getaway for avoiding AD duties by signing an undertaking to the national
investigating authorities stating that they cant sell their products at a price lower than a
specific threshold. These national authorities are not bound by any law to accept these
undertakings, its totally upon their discretion.
11. Imposition and collection of Anti-dumping duties
Its not a compulsion for any of the member nations to impose anti-dumping duties, even
if they have found positive evidence and dumping has been proved. Its totally upon the
national investigating authorities that they wish to collect the duties or not.
70
Jurisprudence, p.44,Wolters Kluwer India Ltd, First Indian Reprint , 2008
Page | 36
12. Sunset Review of Anti-dumping Duties and price undertakings:
This review has been included by the Uruguay round of the WTO Agreement. It speaks
of the review of the anti-dumping duties and price undertakings by the national
authorities after a specific period of time which is generally 5 years.
13. Judicial Review
Article 13 mentions every member whose national legislation consists of the AD

measures shall maintain judicial, arbitral and administrative tribunals.
14. Special and Differential treatment of Developing Countries
Article 15 provides that ‘special regard’ must be given by developed countries to the
‘special situation’ of developing countries.
15. Dispute Resolution System in GATT and WTO
At present the dispute settlement procedures are in accordance with the Tokyo Round,
1979. After this round there has been a substantial change and the rules have been
formalized in order to achieve an understanding between the member nations.
Page | 37
3.3 Anti-Dumping In India:
In India, anti-dumping actions have gone hand in hand with the liberalization of the
economy since 1991. Imports were highly restricted through a number of tariff and non-
tariff barriers. The shift in economic policy made India reduce its tariffs and quantitative
restrictions. Though India had its anti-dumping legislations since 1985, no case was
initiated until 1992. The Indian government inculcated these duties in its legislation by
way of amending its Customs Tariff Act, 1975 (as amended in 1995) which came into
effect from 1.1.1995 to abide the requirements of GATT. Since then, India has pioneered
in in the initiations. It is observed that China is the major victim of Indian anti-dumping
initiations nearly 20% of its total initiations. Another striking feature of anti-dumping
initiations in India is that they have always been concentrated upon a narrow group of
products like petrochemicals, chemicals, yarns and fibers, steel and metals etc.
In order to avoid dumping and to protect the domestic industry, the Central government
can impose, under section 9A of the Customs Tariff Act, anti-dumping duty, if the goods
are being sold at less than the normal value. Levy of such an anti-dumping duty is
permissible as per the WTO agreement. An Anti-dumping action can be taken only when
an Indian industry is producing the ‘like articles’.71
The prime objective of antidumping action is to relieve domestic producers from "unfair"
and "injurious" low-priced imports
The legal framework for the AD duties in India includes:
 The Customs Tariff Act, 1975

 The Customs Tariff (Identification, Assessment and Collection of Anti-dumping
Duty on Dumped Articles and for Determination of Injury) Rules, 1995
 Investigations and Recommendations by Designated Authority, Ministry of
Commerce
 Imposition and Collection by Ministry of Finance
71
VSDatay, Customs law practice and procedure, p. 46, 2013 edition, Taxman Publication Pvt Ltd.
Page | 38
Excerpt of Customs Tariff Act, 1975 relating to anti-dumping provisions:
The first legislation which was amended in India to bring it in line with the GATT
provisions was the Customs Tariff Act, 1975 in the year 1995. The additions were made
in section 9 of the Act, specifically sections 9A; 9B and 9C speak out about these duties.
In the following part of this head an overview of these provisions shall be given.
Dumping:
Where any article is exported from any country or territory (hereinafter in this section
referred to as the exporting country or territory) to India at less than its normal value,
then, upon the importation of such article into India, the Central Government may, by
notification in the Official Gazette, impose an anti-dumping duty not exceeding the
margin of dumping in relation to such article. 72
Provisional Duties
By virtue of Section 9(2), the central government has been empowered to levy
provisional duties on an article if a case is pending investigation by arriving on an
estimated valuation of that product and the resulting margin, though after knowing the
exact value, the government is required to reduce such duty to the exact value and to
refund the excess of duty to the exporting country. In Nicto Tiles Ltd. v. Designated
authority73, here the validity of provisional duty had expired. Later, definitive anti-
dumping duty was imposed with retrospective effect. It was held that anti-dumping is
payable in respect of imports during the intermediate period.
Exemptions to SEZs and FTZs-

It provides that the articles which are imported by a hundred per cent Export-oriented
undertaking or a unit in a free trade zone or in a special economic zone shall be excluded
from the purview of this section or leverage of the anti-dumping duties unless it is
specifically mentioned in the notification,
72
Section 9A, Customs Tariff Act, 1975
73
Nicto Tiles Ltd. v. Designated authority, 2006 (193) ELT 17 (CESTAT 3 member anti-dumping bench)
Page | 39
Retroactivity:
If during an inquiry of dumping it comes to the notice of the Central Government that a
specific article have been dumped in large quantities in a short period of time and the
injury caused by such dumping cannot be remedied by a limited leverage of the duty.
Then, it has been authorized to order retrospective leverage of duty by notification in the
official gazette in respect of that article.
Sunset Review:
The provision of sunset review has been encapsulated in Section 9A (5), it provides that
the anti-dumping duty levied under this Act shall be revoked after the expiry of 5 year,
unless it’s revoked earlier. But the central government has been given the discretion to
extend the leverage for a period of next 5 years if there is a probability to injure the
domestic market. In DA v. Indian Refractory Makers’ Association 74, the respondents
raised the plea that Indian manufacture of the sintered magnesia, had closed its
operations, and therefore continuation of anti-dumping duties would serve no purpose.
Then SC directed the DA to assess the facts afresh of the new circumstances. So, it can
be inferred from this case that subsequent change in circumstances of the market of the
product can lead to the reviews of the AD duties.
In Kalyani Steels v. Revenue Secretary75, it was held that Designated Authority suo moto
can recommend to Central Government to conduct a sunset review. This case shows the
inherent powers with the Central Government with respect to the sunset review.
Prohibition of levying of Anti-dumping duties:
The section 9 B specifies the conditions in which the Central Government cannot levy
anti-dumping duties. The situations have been enlisted below:
 The anti-dumping and countervailing duties cannot be levies for the same article
and situation of export subsidization
74
DA v. Indian Refractory Makers’ Association ,2008 (224) E.L.T 349 (SC)
75
Kalyani Steels v. Revenue Secretary (2008)224 ELT 47 Delhi HC DB
Page | 40
 When the articles are exempt from duties by virtue of being a like product in the
market of the exporting country
 The exports from countries that have a most favored nations agreement with India
cannot be subject to leverage of anti-dumping duties, unless it materially retards
the domestic industry.
 On the receipt of satisfactory voluntary undertakings have been taken by the
Government of the exporter’s nations relating to revision of prices to eliminate the
effect of dumping
Determination of Export Price:
The “export price”, in relation to an article, means the price of the article exported from
the exporting country or territory and in cases where there is no export price or where the
export price is unreliable because of association or a compensatory arrangement between
the exporter and the importer or a third party, the export price may be constructed on the
basis of the price at which the imported articles are first resold to an independent buyer or
if the article is not resold to an independent buyer, or not resold in the condition as
imported.76
Normal Value:
The normal value can be said to be the comparable price at which the goods which are
undergoing inquiry are sold, in the ordinary course of trade, in the domestic market of the
exporting country or territory. If the normal value cannot be determined by means of
domestic sales, the Customs Tariff Act, 1975 provides for the following two alternative
methods:
l Comparable representative export price to an appropriate third country.
2. Cost of production in the country of origin with reasonable addition for administrative,
selling and general costs and for profits.77
Judicial Review:
76
Section 9(A) (1) (b) of the Customs tariff Act, 1975
77
http://commerce.nic.in/ visited on 25 April 2015
Page | 41
An appeal can lie against the order or determination of the existence, degree and effect of
dumping. And Section 130-E of the Customs Tariff Act, 1975 provides that appeal
against any of the orders of CESTAT shall lie with the SC.
Other Concepts:
Like Product78:
Anti-dumping action can be taken only when there is an Indian industry which produces
“like articles” when compared to the allegedly dumped imported goods. The article
produced in India must either be identical to the dumped goods in all respects or in the
absence of such an article, another article that has characteristics closely resembling those
goods. The definition has been kept very broad which makes it difficult to disprove injury
to the domestic market.
Determination of Injury:
The Indian industry must be able to show that dumped imports are causing or are
threatening to cause material injury to the Indian ‘domestic industry’. Material retardation
to the establishment of an industry is also regarded as injury. Injury analysis can broadly
be divided in two major areas:
 The Volume Effect - The DA examines the volume of the dumped imports,
including the extent to which there has been or is likely to be a significant
increase in the volume of dumped imports, either in absolute terms or in relation
to production or consumption in India, and its affect on the domestic industry.
 The Price Effect- The effect of the dumped imports on prices in the Indian market
for like articles, including the existence of price undercutting, or the extent to
which the dumped imports are causing price depression or preventing price
increases for the goods which otherwise would have occurred.
A well celebrated case in this regard is the Nippon Zeon CO. Ltd. v. DA79, the authority
considered volume and market share of dumped import production trend and capacity
78
Rule 2(d) of the CT rules, 1985
Page | 42
utilization, sales, selling price, stock and profitability trends and concluded that the
imports from Japan have increased substantially and forced the Indian domestic markets
to reduce the price; it thus suffered material injury.
Definition of Domestic Industry80
The domestic industry is said to be the domestic producers as a whole who are engaged in
the manufacturing process of the ‘like article’ or those whose collective output
contributes a major portion of the domestic production of that article except for the
producers who are themselves engaged in the alleged dumping.
Casual Link:
A ‘causal link’ is necessary to exist between the material injury being suffered by the
Indian industry and the dumped imports. In addition, other injury causes have to be
investigated so that they are not attributed to dumping. There are various factors which
can help in ascertain the casual link like, volume and prices of imports not sold at
dumped prices, contraction in demand or changes in the pattern of consumption, export
performance, productivity of the domestic industry etc.
De Minimis Margin:
Any exporter whose dumping margin81 is less than 2% of the export price shall be
excluded from the purview of anti-dumping duties even if the existence of dumping,
injury as well as the causal link is established.In SS Enterprises v. Designated
Authority82it was held that if it is found that the volume of dumped imports is less than
3%of total imports of like articles, the de minimisrule will apply and anti-dumping cannot
be imposed.
Injury Margin:
79
Nippon Zeon Co. Ltd.vsDesignated Authority ,1996 (88) ELT 569 Tri Del
80
Rule 2(b) of the CT rules, 1985
81
Dumping margin refers to the difference between the Normal Value of the like article and the Export
Price of the product under consideration. Margin of dumping is normally established on the basis of a
comparison of weighted average Normal Value with a weighted average of prices of comparable export
transactions; or l comparison of normal values and export prices on a transaction to transaction basis.
82
SS Enterprises v. Designated Authority’,AIR 2005 SC 1527
Page | 43
Besides the calculation of the margin of dumping, the DA also calculates the injury
margin which is the difference between the fair selling price due to the domestic industry
and the landed cost of the product under consideration. Landed cost for this purpose is
taken as the assessable value under the Customs Act and the basic customs duties.83
In Korea Kumho Petrochemicals v. Designated Authority84, it was held that whilw

deciding injury margin, a sound appreciation based on relevant criteria, volume effect of
dumped imports are of vital importance and criteria mentioned in the Annexure 2 of the
CT Rules is a mere checklist. So, we can say that this criterion can be changed on case-
case basis.
83
http://commerce.nic.in/ visited on 25 April 25, 2015
84
Korea Kumho Petrochemicals v. Designated Auhtority 2003 (155) ELT 265 (CEGAT)
Page | 44
 The Policy Structure of Anti-dumping Provisions:
The policy structure shall include the meaning of dumping, procedural requirements,
definition of domestic market, and leverage of AD in India as per the rules made in
accordance with the amended sections of Customs Tariff Act, 1975.
Governing Bodies:
Anti-dumping in India are administered by the Directorate General of Anti-dumping and

Allied Duties (DGAD) functioning in the Dept. of Commerce in the Ministry of
Commerce and Industry and the same is headed by the "Designated Authority". The
Designated Authority’s function, however, is only to conduct the anti-dumping duty
investigation and make recommendation to the Government for imposition of anti-
dumping. Such duty is finally imposed by a Notification of the Ministry of Finance.
Thus, while the Department of Commerce recommends the Anti-dumping duty, it is the
Ministry of Finance, which levies such duty.85
Initiation and Investigation Process:
The process is initiated by the way of a written application which can be made by or on
behalf of the concerned domestic industry to the Designated Authority. Under the Rules a
valid application can be made only by those domestic producers who expressly support
the application, and account for more than 25% of total domestic production of the like
article in question. 86
The following steps are involved in handling the application so received by the
Designated Authority:
Step1. Preliminary Screening:
The application is scrutinized to ensure that it is fully supported by the documents and
provides sufficient evidence for initiating an investigation. If the evidence is not
adequate, then a deficiency letter is issued. Unless the deficiencies are rectified, the
85
http://www.eximguru.com/ visited on 25 April 2015
86
Rule 5, The Customs Tariff (Identification, Assessment and Collection of Duty or Additional Duty on
Dumped Articles and for determination of injury) Rules, 1985
Page | 45
submission made before the Authority cannot be construed as an application pending
before the Authority.
Step2. Initiation:
The DA ascertains that the application has been made by or on behalf of the relevant
domestic industry. It also examines the accuracy and adequacy of the evidence provided
in the application and when satisfied that there is sufficient evidence regarding dumping,
injury and causal link, a public notice is issued initiating an investigation.
The notice for initiation of investigation will be issued normally within 5 days from the
date of receipt of a properly documented application.
Step3. Access to Information:
The Authority provides access to the non-confidential evidence presented to it by various

interested parties in the form of a public file, which is available for inspection to all
interested parties on request after receipt of the responses. The right of presenting their
case and giving evidence is afforded to the respondents. The Rajasthan High Court
discussed this issue elaborately in J.K Industries Ltd. v. Union Of India87, the court
observed that an individual or an association representing his interest must be permitted
to participate in an investigation proceeding.
Step3. Preliminary Findings:
The DA will proceed expeditiously with the conduct of the investigation and shall, in
appropriate cases, make a preliminary finding containing the detailed information on the
main reasons behind the determination. The preliminary finding will normally be made
within 60-70 days from the date of initiation.
Step4. Disclosure of information and Evidence:
Based on the submissions made by the interested parties during the hearing and giving of
oral evidence and evidence gathered during the investigation and verification thereof, DA
will determine the basis of its final findings. However, the Designated Authority will
87
J.K Industries Ltd. v. Union Of India ,2005 (185) ELT 3 (Raj. HC)
Page | 46
inform all interested parties of the essential facts, which form the basis for its decision
before the final finding is made. 88 In Universal Chemicals v. DA89, it was held that if a
foreign exporter doesn’t provide reliable and full data, he should be treated as non-
cooperating exporter and normal value should be determined by designated authority in
terms applicable to the non-cooperating exporters.
Step5. Final Determination:
The interested parties submit their response to the disclosure and the final position of the
Authority taken therein. The Authority examines these final submissions of the parties
and comes out with final findings which though appealable.
Time-limit for Investigation Process90
Normal time allowed by the statute for conclusion of investigation and submission of
final findings is one year from the date of initiation of the investigation. The above period
may be extended by the Central Government by 6 months.
In Designated Authority v. HaldorTopspoe91, the procedure was explained- a)

Investigating authority while determining normal value can reject the material produced
by one of the party to proceeding and prefersother material to determine normal value.
Investigating authority can determine normal value on ‘best judgment assessment’.
Statute has given very wide powers to the investigating authorities; b) Comparable price
prevailing in ‘exporting territory’ and not the ‘exporting country’ should be considered.
‘Territory’ refers to larger geographical area. Thus, normal price in another European
Country can be considered as it’s a territory. c) Two different dumping duties on
different injury margins can be levied. d) If party to investigation withholds necessary
information, adverse inference can be drawn. e) time-limit of one year for the
investigation of anti-dumping can be extended.
88
Rule 6, sub-rule (4) of the CT Rules, 1985
89
UniversalChemicalsv. DA, 2002(146)ELT 449 (CESTAT)
90
Rule 17(1) of the CT Rules, 1985
91
Designated Authority v. HaldorTopspoe ,2000 AIR SCW 2653
Page | 47
Chapter4- ANTI-DUMPING AND COMPETITION LAWS: AN
INTERFACE
On the face of it, competition laws and anti-dumping laws look mutually exclusive but
they have convergence on various points. If we analyze closely, it can be observed that
anti-dumping laws are somehow hindering what the competition laws are trying to
promote i.e., competition. In the following chapter, an attempt has been made to identify
the interface between these laws.
4.1. Objectives:
The main objectives of Competition Laws are:
 Promotion of competition and prevention of anti-competitive practices:
The main purpose of competition laws of a country is to promote competition in

the market and to keep a check that there are no anti-competitive practices taking
place in the market like predatory pricing, cartelization, big rigging, abuse of
dominance etc. In India, the Competition Commission of India has been entrusted
with the responsibility of appreciating pro-competitive ideas and suppressing anti-
competitive practices.
 Protection and Promotion of Consumer Interest:
These laws indirectly protect the consumers by way of preventing anti-

competitive practices in the market. Moreover, more competitive the market is,
more beneficial it is for the consumers. This notion is based on the idea that if the
market will be competitive it shall directly be beneficial for consumers.
 Achieving economic efficiency:
Competition Laws are economic legislations and therefore they always strive for
attainment of economic efficiency. As when the markets will be competitive, it
will automatically increase the economic efficiency of a country.
Page | 48
 Public Interest:
Although the competition laws aim for protection of consumers indirectly but
directly they lend a helping hand to the producers who are being chucked away
from the market by the use of anti-competitive practices. So, we can say it works
in furtherance of public interest at large.
 Competition Advocacy:
It’s another important feature of the competition laws specifically in India, they
have the function making people aware of the competition laws and lending a
helping hand to them in case they are in need of a competition relating advice.
The main objectives of Anti-dumping Laws are:
 A remedy for unfair trade practices:

The anti-dumping laws serve the purpose of remedying the harm caused or likely
to be caused by the unfair trade practice of predatory pricing done by the
exporters in the process of dumping.
 Protection of domestic industries against injury:
The basic rationale behind the adoption of anti-dumping laws is to protect the
domestic producers against the dumping practices. This is because dumping of
articles from abroad can materially injure the domestic market and sometimes
even drive them out of the market.
 Addresses the issue of predatory pricing:
As mentioned earlier, anti-dumping laws are designed to address the issue of
unfair trade practices. Predatory pricing means when the producer of s product
sells the product below the normal value so as to attract more market share and
customers and to drive away the other competitors from the market.
 Public Interest:
Like the other legislations in India, public interest is one of the objectives of anti-
dumping laws. On the face of it, it seems to be a protectionist tool just for thr
domestic industry but it will affect the economy at large like draining out of
foreign exchange, closing down of industries will cause unemployment, poverty,
economic insufficiency. In order to safeguard and protect the public at large this
Page | 49
legislation has been developed. In Haridas Exports v. All India Float Glass Mnfrs
Association92, it was held that ‘public interest’ doesn’t necessarily mean the
interest of the domestic industry. Indian importer obtaining goods at lower prices
at a lower price didn’t contravene any law, he got them in a good bargain. The era
of protectionism has come to an end.
 Consumer Welfare:
The anti-dumping laws prima facie look like they are meant to benefit the
domestic producers only but indirectly the hidden motive is the consumer welfare.
Speaking, more elaborately, some of the exporters initially dump the articles at
very low prices and when they realize that they have driven out all the
competitors from the market, they tend to increase the prices and create a
monopoly which is in turn against consumer welfare. So, to do away with these
contingencies the anti-dumping laws are enacted.
92
Haridas Exports v. All India Float Glass Mnfrs Association, 38 SCL 1020 (SC)
Page | 50
4.2 Concept of Price Discrimination:
As discussed earlier, both the laws seek to prohibit price discrimination by the
enterprises which are practiced in the form of predatory pricing conduct that can cause
injury to the domestic market. Anti-dumping laws and competitions laws aim at
remedying "transnational price predation" and public interest. The trade (including
foreign investment) and competition policies, support, complement and reinforce each
other, facilitating market discipline and competitive behavior by both domestic and
foreign companies.93
 Sanctions:
Under anti-dumping laws, the sanctions are imposed in the form of anti-
dumping duties and price undertakings taken up by the government on
happening of such conduct.
Under the competition laws, price discrimination by the dominant enterprise

and if it’s found predatory in nature is followed by pecuniary sanctions on
such enterprises.
 Remedial vs. Punitive measures:
The most significant difference between these laws is the way they seek to
address the issue of ‘price discrimination’. Anti-dumping laws are remedial in
nature, they provide the solution to do away the effect of it but the
competition laws are stricter and provide for punitive measures. The remedy
prescribed under competitionlaw against the practice of predatory price
discrimination may range from an order to end the practice andnot desist from
it in future, to monetary penalty and in certain cases even division of the
enterpriseenjoying dominant position.
Notwithstanding the different nature of remedies provided under the two laws,
thepossibility of remedies under the antidumping laws having a bearing on
93
Rahul Goel,‘Antidumping And Competition Policy: Total Strangers Or Soul Mates?’, published by
Manupatra, available at http://www.manupatrafast.com/
Page | 51
competition cannot be negated. Particularly, the antidumping measures taking
the form of ‘price undertakings’ wherein the exporters agree to revise the
prices to the extent of the dumping margin or to the extent that the injurious
effects ofthe dumping are eliminated can be said to be promotion of collusion
and can have an impact of the conditions of competition.94
There is a negative impact of price undertaking as it tends to fix a price for the
article in the market which is against the very essence of competition laws
which propounds that price of a commodity is to be fixed by the free market
forces and not by any external factor. Moreover, the price undertakings
increase the price of the commodities in the domestic market.
Moreover, predatory pricing is concerned with the sales below the predator’s
cost of production with the intention to eliminate competition. Anti-dumping
investigations are attracted when an exporter sells his products at a price
below that of the price at which he sells in the country of origin. Anti-
dumping is focused on the sales price as opposed to cost of production. 95
94
Study on Antidumping and Competition law, submitted to Competition Commission of India by
Economic Laws Practice available at www.cci.gov.in
95
Jurisprudence, p.286, Wolters Kluwer India Ltd, First Indian Reprint , 2008
Page | 52
4.3 Concept of Injury vs. Adverse Appreciable effect
There is a parallelism in these laws with respect to the basis or reasons for application of
these laws. Under anti-dumping laws, the designated authorities are required to identify
the injury to the domestic market and under the competition laws; the competition
authorities ascertain the appreciable adverse effect of the conduct on the competition
 Determination of ‘Injury’ under Antidumping Law:
The practice of ‘dumping’ has not been declared as illegal per se in India or by the
WTO ADA. The practice of ‘dumping’ follows sanctions only when it can be
proved to cause ‘injury’ to the domestic industry. The rationale behind not
attaching sanctions to every form of international price discrimination (dumping)
was to prevent antidumping measures from being applied merely as a tool for
eliminating ‘fair’ competition from the international market. This is why, sanctions
that were attached to the practice of dumping resulting in injury to the domestic
industry were designed to ‘remedy’ the situation of ‘injury’ to the domestic
industry as opposed to providing a punishment for the conduct (both the AD
agreement and domestic legislations in all the subject countries refer to the conduct
of ‘dumping’ as being ‘unfair’). Antidumping duties can therefore utmost be
imposed to the extent of the ‘margin of dumping.’ Some countries such as India
take this rule further, and if the injury margin is lower than the dumping margin,
then duties will be levied only to the extent that it is sufficient to remedy the
‘injury’. Like in India, a domestic industry M/S Oswal Woolen Mills
Ltd96complained that exports from acrylic fiber from Japan, Portugal, Spain and
Italy were dumped in Indian market through an import house in India. The DA
found that the exports were below the normal value injuring the domestic market.
There was a causal link between dumping and injury; the DA imposed AD duties.
The parameters which are indicative of injury are:
(i) Material injury to the domestic industry;
96
Oswal Woolen Mills Ltd. v. DA,2000 (118) E.L.T 275 (Tribunal)
Page | 53
(ii) Threat of material injury to the domestic industry; and
(iii) Material retardation of the establishment of a domestic industry.
 Determination of ‘Adverse Appreciable Effect’ under Competition

Laws:
As stated above, to enforce the sanctions under competition laws the

competition authorities identify the adverse appreciable effect on the
competition in India. Under competition laws, a ‘price discriminatory’
conduct of an enterprise or a group in a ‘dominant position’ is per se
prohibited and the law does not impose any requirement that such conduct
shall cause or have any adverse effect on competition in the relevant market in
India. The general rule is that price discrimination is prohibited per se, is that
if an enterprise can show that the alleged ‘price discrimination’ is adopted to
“meet competition” then the prohibition no longer applies.
The requirement of ‘appreciable adverse effect on competition’ forms the

touchstone of the Competition Act, 2002.The factors for determining the
appreciable adverse effect are:
a. Creation of barriers to new entrants in the market;
b. Driving existing competitors out of the market;
c. Foreclosure of competition by hindering entry into the market;
d. Accrual of benefits to consumers;
e. Improvements in production or distribution of goods or provision of

services;
Page | 54
f. Promotion of technical, scientific and economic development by means of
production or distribution of goods or provision of services. 97
Identically, under antidumping law the touchstone for the imposition of antidumping
duties iswhether ‘injury’ is caused or likely to be caused to the domestic industry due to
dumping. But the concept of ‘injury’ is narrower as compared to the ‘AAE’ because the
examination of injury is limited to analyze the impact of alleged price discrimination on
the domestic producers whereas AAE analysis involves the ascertainment of impact on
the relevant market and not merely on competitors.
A positive finding on the ‘AAE on competition’ would be based on the consideration of

a number of factors and not just on the negative impact on the competitors. In essence
therefore this test is broader than the test for determining ‘injury’ under antidumping
law.
4.4 Consumer Oriented vs. Producer Oriented:
An analysis of objectives of both of the laws is boiled down to a conclusion that more or
less, the competition laws are aimed at protecting the consumers and they have been
successfully working in that respect. They have an object of indirectly protecting the
consumers against the anti-competitive practices in the market. Whereas, the anti-
dumping laws primarily aim at providing an umbrella to the domestic producers from the
exporters abroad. Along with that, the working and use of the anti-dumping duties have
always been in the nature of a protectionist tool against the foreign competition by the
domestic producers so as to hinder free and fair competition.
97
Section 19 (3), The Competition Act, 2002 ( Act 12 of 2003)
Page | 55
4.5 Extra-territorial Applicability of Antidumping and Competition Law:
The very essence of these laws make them extra-territorial in nature, they seek to
address the issues which might have originated outside India but have an impact in
India.As per the provisions of the WTO AD Agreement,the investigating authority can
impose sanctions against a third country, if the industry of another memberof the WTO
(not the nation of the investigating authority) is suffering injury on account of the
thirdcountry’s conduct in the Indian market.
The entire application of the antidumping law requiresthat the goods be imported into
India. Section 9 A of the Customs Tariff Act, 1975 which contains theprovisions related
to the imposition of antidumping duties clearly states that the Central Government may
impose antidumping duties on articles ‘upon their importation’.
Where any article is exported from any country or territory (hereinafter in this
section referred to as the exporting country or territory) to India at less than its
normalvalue, then, upon the importation of such article into India, the Central
Government may,by notification in the Official Gazette, impose an antidumping
duty not exceeding themargin of dumping in relation to such article.”98
In a particular instance, the Indian anti-dumping authority has continued duties in a

sunset review where there were no imports, on the basis that the injury was likely to
recur, based on theprices of exports by the enterprise to third countries and the surplus
capacities in the exporting country,even though there were no imports in to India
during the period of investigation. 99
98
Section 9 A (1), The Customs Tariff Act, 1975 ( Act 51 of 1975)
99
Anti-Dumping Investigation concerning imports of Caustic Soda from Qatar, No.55/1/2001-DGAD
Page | 56
4.6 Domestic Industry under Anti-dumping Duties and Relevant Market
under Competition Laws:
The areas to be analyzed by both the laws are different as under anti-dumping laws
the DA has to identify the domestic market and under the competition laws,
Competition Commission of India identifies the relevant market.
 Identification of ‘Domestic Market’:
The domestic market may be identified as per the definition provided
under the CT Rules, 1985.100 It shall include the producers contributing
into the total production of the ‘like article’ in question and are not the
ones who are involved in the dumping process. In AltekLammertz Needles
Ltd v. DA101, the appellant alleged that the exporters from Japan, Korea,
China, Czech Republic and Germany were dumping industrial sewing
machine needles into Indian market. But DA found that the company was
related to an exporter and cannot be deemed to be a part of domestic
industry.
So, the identification of domestic industry is a crucial process and it can
come to the notice of the investigating authorities.
 Identification of Relevant Market:
The Competition laws in India give an expressed definition of the relevant
market. For determining whether a market constitutes the relevant market,
the Commission shall have due regard to the ‘relevant product market’ and
‘relevant geographical market’. 102
The factors for determining relevant geographic market are:
a) Regulatory trade barriers
b) Local specification requirements
100
Rule 2(b) of Custom Tariff Rules, 1995 define domestic market as the domestic producers as a whole
engaged in the manufacture of like article and any activity connected therewith or those whose collective
output for the said article constitutes a major proportion of the total domestic production of that article,
except when such producers are related to the exporters or importers of the alleged dumped article or are
thremsleves importers thereof, in which case not forming a part of domestioc industry.
101
AltekLammertzNeedles Ltd v. DA ,2000 (115) E.L.T 266 (Tribunal)
102
Section 19(5), Competition Act, 2002 (Act 12 of 2003)
Page | 57
c) National procurement policies
d) Transport costs
e) Language
f) Consumer preferences and
g) Need for secure or regular supplies of after sale services.
The factors for determining the relevant product market are:
a) Physical characteristics of goods

b) Price of goods or services
c) Consumer preferences
d) Exclusion of in-house production
e) Existence of specialized producers
f) Classification of industrial products
As stated earlier, the process involved in competition laws is quite lengthy and
cumbersome because of the broad scope of the concepts like in the above said case,
the Competition Commission has to keep a number of factors in mind before
identifying a specific market as relevant. As compared to the competition law
procedures, in anti-dumping laws its quite convenient to tag some industry as
domestic or not.
Page | 58
4.7 Difference Between Anti-dumping Laws and Competition Laws:
Basis Competition Laws Anti-dumping Laws
Competition Law is concerned

1. Meaning An Antidumping law is
with the regulation of competition
concerned with addressing just
in a particular market within the
one type of unfair, international
territory of a country. Thus, it
practice that causes injury to the
would take within its sweep a
domestic industry, i.e. ‘dumping’
whole host of anti-competitive
of goods by an exporting
practices including anti-
country.
competitive agreements, bid-
rigging, predatory pricing, cartels,
abuse of dominance etc.
2.Complaint Under these laws, any person, An antidumping petition can be

Procedure: consumer or association can file filed by the domestic industry as
information before the defined under the Antidumping
Commission, a State Government, Rules or suo moto by the
central Government or statutory Designated Authority. (Rules
authority can also make a 2(b), 5(1) of the Antidumping
reference to the Commission for Rules
initiating an inquiry.
3.Interest Competition law procedures allow No interest group other than the
Groups: and require consideration of domestic industry has full legal
interest groups such standing in antidumping cases.
asmanufacturers,importers, The predominant interest group
Page | 59
exporters, consumers and the is of domestic producers.
general public. Commercial actors Industrial users and consumers
can have their interests assessed do not have legal standing to
through the determination of the maintain a complaint.
market, causation or injury.
Interests of consumers are taken
into account when assessing the
impact of business practice on
competition.
4. Casual Link In predatory pricing enquiries, the In antidumping complaints,

and Actual Complainant has to establish that intent is irrelevant but actual
Injury the predator acted with intent to injury has to be shown. Further,
eliminate competition and a causal link has to be
competitors. Actual injury is not established between the dumping
required. and the injury suffered.
5. Procedures In most countries, competition Antidumping enquiries are

cases are dealt with by a court of always conducted by government
law, where parties are entitled to agencies through administrative
full discovery rights and due procedures.
process. Though in India, CCI has
been entrusted with the
responsibility of deciding cases.
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4.8 Instances of Anti- Dumping and Competition with reference to India
1. Anti-dumping duty on polypropylene
In an attempt to protect the domestic polypropylene (PP) industries, the government

isrecommended a provisional anti-dumping duty on PP imported from Saudi Arabia,
Oman and Singapore. This followed an appeal by Reliance Industries, supported by
HaldiaPetrochemicals Ltd. (HPL), the only two producers of PP in the country. As a
result of thisduty, the companies from these countries selling the product cheap in India
were predicted to be discouraged.
The appellant Reliance Industries figures among the top eight PP producers in the world
and the company held a 70 percent share of the domestic market and catered to three
percent ofglobal consumption of PP. The government justified the imposition of the duty
on the groundthat imports from the subject countries have increased in absolute terms as
well as in relationto total imports, total demand and total production in India. Moreover,
the market share of theduopolistic domestic industry had come down, while the demand
had increased. Despiteincrease in demand, the prices of the domestic industry had been
suppressed hence there was significant underselling from these countries.
However, the local processing industry was apprehensive of the proposed duty as it
would lead toa significant price rise of the raw material (PP); in some cases the price may
rise to almost double as the amount of duty was almost equivalent to the international
market price. PP wasused as a raw material in a variety of industries, including
packaging, woven sacks forcement, fertilizers, sugar and various consumer items such as
house ware, auto components,pipes, water tanks, furniture, and medical appliances. Most
of the units associated with processing were small and medium enterprises (SMEs) and
there was a fear of hurting them incase of price rise in the domestic market.
Analysis:
In the above case ,it has been illustrated that trade distortions allegedly caused by the
unfair trade practices of dumping (by foreign companies) in case of PP. Remedies in the
form of levy ofanti-dumping duty to make the playing field more level and protect
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domestic industries. However, the duty was opposed by the domestic end-user industry
on the ground that the move would increase the price of the raw material. Most of the
manufacturersusing PP as raw material are SMEs. And they are at the mercy of a
domestic duopoly. Thequestion arises; will not the imposition of anti-dumping duty have
an adverse implication forSMEs who are already struggling for survival due to the
intensified global competition?Trade liberalization and use of tariffs to protect domestic
consumers are to be used topromote competition and not stifle it by using non-tariff
measures such as anti-dumping.
2. China accused of ‘predatory pricing’ tactics
China has been at the prime focus of India when it comes to anti-dumping initiations. In a
protest against Chinese business tactics, India’s small and medium enterprises
havewarned that they were hurt by “typical Chinese predatory pricing” intended to drive
rivals outof the business so that Chinese companies could capture the Indian market and
then raiseprices to more normal values. To deal with the situation, they are urging the
government tostep up the pace of its anti-dumping investigations and impose tougher
safety and qualitychecks to protect Indian companies from cheap Chinese goods.
In a survey conducted by Federation of Indian Chambers of Commerce and Industry

(FICCI)highlighted that majority of small and medium-sized manufacturers (SMEs) had
suffered aserious erosion of their Indian market share over the past year, because of
cheaper Chineseproducts. It is also estimated that Chinese imports were 10 to 70 percent
cheaper thancomparable Indian products. The dent was felt by companies in a range of
sectors, includingprocessed food, light engineering, building materials and heavy
engineering, chemicals andtextiles.
Looking at the high rise in imports of Chinese toys, Government announced a six-month
banon the import of Chinese toys. However, the ban was lifted after two months, when
Beijingthreatened to take the issue to the World Trade Organisation (WTO).
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Analysis:
The fact that India needs to protect its industry from alleged unfair competition from
Chinahas been debated and accepted for a long time now. It has been felt that China is,
by nomeans, a fair trading partner and is capturing Indian market at a very fast pace
through anticompetitive trade practices such as predatory pricing. Predatory pricing
involves pricingproducts below cost with the intention of acquiring market. The intention
is to recover thelosses through future price increases. As a control measure, India is using
various antidumpingand safeguard measures. It is a matter of research whether the influx
of cheaperChinese products into India (as well as in other developing countries) is
motivated bypredatory pricing or it is simply vigorous price competition by Chinese
firms. Consequently,this has resulted in lower production costs and hence lower prices
against which Indian firmsare unable to compete. Are the Chinese exports prices lower
than those of the same productsbeing sold at home?
An important issue in such cases is the time taken for anti-dumping investigations. In
India, ittakes 10 to 12 months which is more than enough for Chinese firms to damage
the Indianindustry. The issue in this situation is how to ensure quick action, particularly
in case ofChina?
3.Definitive dumping duty on phosphoric acid from Korea
Following the petition filed by Gujarat Alkalies& Chemicals Ltd., and Solaris Chemtech,
theFinance Ministry of India has levied anti-dumping duty of US$221.64/tonne on
phosphoricacid from South Korea. The duty shall be applicable for five years from June
22, 2010.
Analysis:
The moot question that needs to be answered in this regard is whether the South Korean
phosphoric acid producer was granting unfair competition to domestic producers in the
Indianmarket. Unfair competition can arise from subsidies from the South Korean
government,predatory behavior by the Korean producer or exclusive agreements with
dealers. If these oridentical factors are not present, the mentioned import is not the result
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of anti-competitiveaction. Instead, the anti-dumping duty can be interpreted as anti-
competitive. Possibleoutcome of dumping duty in such a case may be increased input
cost for domestic producersof the user industries like pharmaceutical applications,
beverages, calcium phosphate etc. resulting in higher consumer prices of the finished
products
So, we can say that there is a possible interface between both the laws which can be
identified in the cases discussed above.
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Chapter5: STRIKING BALANCE BETWEEN ANTI_DUMPING AND
COMPETITION LAWS:
5.1Do anti-dumping result in the Anti-competitive effects?
On the face of it, anti-dumping laws appear to be anti-competitive because they obstruct
the competition from the outside world. On the application made by domestic producers,
investigation procedures of dumping are started and it’s more or less looks like a
protectionist tool.
But in reality, it is not so anti-dumping laws are rather pro-competitive in nature. The
remedy of imposition of anti-dumping duty was provided so as to prevent distortion,
impairment and restriction of competition in the domestic industry. 103 To support this
argument, the ‘material injury’, ‘positive evidence’, ‘volume of exports’, and ‘dumping
margin’ provisions of anti-dumping laws can be highlighted.
The procedural requirements of Anti-dumping laws mandate that there should be material
injury to the domestic injury to the domestic industry which means that industry must
have actually been affected and materially retarded during the process of dumping. In
Nippon Zeon104dispute, the appellants pointed out that injury has been caused not by
import, but by inefficiency, inadequacy capacity utilization, wastage and similar factors.
The tribunal was of the view that ‘the position has to be considered not in the context of
ideal condition but in the specific circumstances of the domestic industry.’ Secondly,
there must be ‘sufficient and positive evidence’ in favor of allegation and in case of
insufficiency of evidence; the application for the same can be rejected by the Designated
Authority. Thirdly, ‘dumping margin’ being one of the essential requirements of
imposing anti-dumping duties is also applied strictly to avoid misuse of the anti-dumping
laws. The Central Government imposed an anti-dumping at different rates on Nylon Tyre
Cord Fabric (NTCF), exported into India from South Korea, Indonesia, Thailand and
Taiwan. An appellant, M/s Formosa Tea Co. Ltd, argued that there was no dumping by
103
Jurisprudence, p.286, Wolters Kluwer India Ltd, First Indian Reprint , 2008,
104
Nippon Zeon Co. Ltd. v. Designated Authority ,1996 (88) ELT 569 Tri Del, parah.25 (tribunal order)
Page | 65
them. Upon refusal of records, the Tribunal found that there was a negative dumping
margin in respect of this exporter. The export price was slightly higher than the normal
value of the exported goods worked out on the basis of cost of production. Anti-dumping
is imposed only in the cases of exporting of the goods below the normal value. If the
export price is above the normal value then there is no question of imposition of anti-
dumping duties. Consequently, the Tribunal set aside the dumping duty imposed by DA
vide notification No. 32/2000-Cus dated on 28 March 2000. Fourthly, ‘the volume of
exports’ also matters; it has to be in bulk quantities as small amount of imports even if
injurious in nature cannot attract the anti-dumping duties because mandatory requirement
is to prove the effect.
The argument in support of the Anti-dumping laws being pro-competitive are, through
the inculcation of the following provisions an attempt has been made to balance out the
anti-competitive effects of anti-dumping.
 Sunset Review:
A limitation on applicability of anti-dumping duties foe a period of 5 years so that
it doesn’t turn out to be against the free trade practices. This is because of the
change of circumstances in the market conditions or foreign exchange
fluctuations, the effect or injury may vanish. So, in order to prevent the necessary
restrictions for a longer period of this provision has been in the anti-dumping
laws. In Indian Metal and Ferro Alloys v. DA105, it has been held that sunset
review by Designated Authority is mandatory, if called upon to do so. Sunset
review is required to be completed as per rule 23 of the Custom Tariff Rules,
1995.
 Price Undertakings:
This is seen more or less like a bane than a boon for competition in a country as it
tends to set a price (an undertaking given by exporter not to reduce the price
below than the fixed price) for an article in the market. But the other perspective
of it can be that it fixes prices so that the domestic producers can freely compete
among themselves and they do not have fear of being driven out of the exports. In
105
Indian Metal and Ferro Alloys v. DA105, (2008) 224 ELT 375 (Delhi HC DB)
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support of this provision, AD duties seem to be pro-competitive in nature. But it
should be taken care of that price decided in the price undertakings should be
ascertained carefully in order to maintain its pro-competitive effect and should not
result in inflation of prices for customers.
 Transparency:
In order to misuse of anti-dumping laws at the hands of domestic producers and
consequently obstructing free and fair competition from outside India. The
Tribunal has strictly warned the DA on outside interference in the investigation in
addition to the finding of the dumping. In B.L.A Industries & Other and
Automotive Tyre Manufacturers Association v. DA106, while examining the
records, the Tribunal found that ‘outside elements’ had tried to influence the DA
in its decision making. The Tribunal rules that DA is entrusted with quasi-judicial
function in matters relating to investigation and the finding of dumping. Warning
given to DA was timely. There is a strong rationale for separating the DGAD
from the Ministry of Commerce and making it an independent agency for
maintaining the credibility of India among the WTO members.
So, conclusively we can say that anti-dumping laws can be anti-competitive in

nature if used liberally, therefore to do away with the anti-competitive effect of
these laws a stricter application of it should be there. As it is an enacted
legislation, it has its own rationales but it shouldn’t be used as a protectionist tool
by the domestic producers and obstruct competition from the foreign countries
because WTO is meant for promotion of liberal trade environment between its
member countries. And anti-dumping flows from the WTO agreement so its
purpose can never be to interrupt the free and fair trade
106
B.L.A Industries & Other and Automotive Tyre Manufacturers Association v. DA,2000 (117) ELT 625
(Tribunal)
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5.2Co-existence of the two laws or the replacement of one by the other?
It is imperative to understand that competition laws and anti-dumping laws can co-exist
or they can replace each other. Many economists are of the view that that anti-dumping
law can replace competition laws. The conflict between these laws arises when we
analyze the aims of both of them as competition law thrives to promote competition and
attach sanctions to only such price discriminations which adversely affect competition,
even if it harms some competitors in the process. Whereas, in anti-dumping ‘price
discrimination’ ignores the anti-competitive aspects of it and its aim is only to protect the
domestic industry.
The co-existence of both of these laws is challenged by the conflicts existent between
these laws. The debate of competition laws versus anti-dumping laws have flourished all
over the world for a long period of time. The major question is that whether competition
policy criteria are substituted for anti-dumping laws. It came before India, when the
appeals were filed by Haridas Exports107against orders passed by MRTP Commission,
(duly constituted for dealing with competition laws before CCI was formed and
Competition Act was enacted), whereby Indonesian manufacturers of float glass have
been importing to India at allegedly predatory prices. The Association of Float glass
manufacturers filed a complaint with the DA in 1998 for imposing anti-dumping duties
on the alleged imports of float glass. Later, they files a complaint with the MRTP
Commission alleging that Indonesian manufacturers were exporting float glass to India at
predatory prices, distorting and preventing competition. Consequently, the MRTP
Commission passed an injunction restraining the Indonesian Companies from exporting
float glass at predatory prices to India. The appellants challenged the order before the SC
and contended that MRTP Commission had no jurisdiction in this case to entertain and
adjudicate upon a complaint of injury to the domestic industry on account of low-priced
goods.
107
Haridas Exports v. All India Float Glass Mnfrs Association, 38 SCL 1020 (SC)
Page | 68
The apex Court was of the view:
The jurisdiction of the MRTP Commission, in our opinion, is not limited by the
anti-dumping provisions in the Customs Act. The two acts operate in different
fields and have different purposes…. The Commission is not a court with power
of legal review over legislative action..the Commission cannot prohibit import,
it’s jurisdiction commences after import is completed and restrictive trade
practices take place. 108.
The case is not the same in the present scenario, because competition laws now have the
authority of preventing any such practice which has AAE on the competition within
India. So, the decision could not have been supported with the above said reasoning.
Majorly, the anti-dumping and competition laws were meant to complement each other
but by and large they have not been able to fulfill that object because of the two reasons-
firstly, the pace of development of competition laws in India has been faster than the
dumping laws and secondly, competition laws have spread its tentacles over other
countries which has broadened its area of operation. Moreover, antidumpinglaws have
evolved within the shackles of the WTO Agreement and have become a protectionist tool
in several jurisdictions, with the result that in some extreme instances it impairs
competition rather than promotes it. Indeed now the ultimate objectives are quite
different with competition law aimed at protecting consumers’ interests and antidumping
law designed to safeguard firms’ businesses. Still, the two sets of laws were originally
meant to complement each other, and they are intended to act upon the same market
distortion.109
While the objectives behind earlier antidumping laws ensured that healthy price
competition between corporations was encouraged as long as predatory pricing was
avoided, today the mere presence of increasingly protectionist antidumping laws has
resulted in a change in the economic behavior of firm wherein instead of profit
maximization through healthy price competition, firms choose to seek protection or
108
Paras 47 and 48 of Supreme Court judgment
109
Ian Wooton and Maurizio Zanardi, “Trade and Competition Policy: Antidumping versus Anti-Trust”
available at: www.gla.ac.uk/
Page | 69
undertake steps that are more likely to lead to the imposition of an antidumping duty on
imports. On the other hand, competition laws continue to encourage price competition
within firms in a market as long as it does not result in predatory pricing, with a view to
maximizing consumer welfare and protecting the conditions of competition. In other
words, the change in the objectives for which antidumping and competition laws are
being used today has also in some instanceschanged their interaction from
complementary to conflicting. 110
So, we can conclude that there is no uniform view on the relationship between these laws.
Some authors are of the view that they complement each other and some perceive anti-
dumping to be an extension of the competition laws to the extent that it addresses the
issue of’ international predation’. Another diverging view is that anti-dumping is
protectionist by its very nature and is against the principles of competition policy.
110
Naveen Chugh, ‘Antidumping And Competition Law: Indian Perspective’, 2013, Competition
Commission of India
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5.3Does Anti-dumping hinders Free Trade? Effect on the Free trade Policies?
The use of anti-dumping measures to address the issue of ‘injury’ to the domestic
industry is majorly opposed by the economists as they find it totally against the free trade
regime of the country. However, GATT provides it as a trade policy instrument in order
to deal with the contingent situations (of selling of products in the domestic industry at
predatory prices). For promoting international market access and "fair" competition is
difficult in the presence of divergent rules for dealing with private market power and non-
border restraints to trade.111
Many studies suggest that anti-dumping laws can be replaced with competition laws,
specifically in the free trade agreements (FTAs). It has been suggested that the abolition
of antidumping laws in favor of harmonized antitrust laws enhances economic welfare,
and offers a practical solution to the global increase in antidumping actions. A uniform
standard of competition policy can be applied to regulate a single market, regardless of
the nationality of each producer. In this way, price discrimination will beexamined under
the national competition law (or possibly international law in the future); as long as it is
acceptable under the competition rules, no litigation will be initiated against it. A uniform
standard of competition policy can be applied to regulate asingle market, regardless of the
nationality of each producer.
Some countries have chosen to abolish rules on antidumping and incorporate rules on
competition in their free trade agreements with other trading partners because of the
above stated reasons. There does not seem to be any explicit linkage between the
abolition of one and incorporation of rules on the other. In certain free trade agreements
where countries have achieved this, it appears to have been made possible because of
complete integration of markets, whereas in others, one form of contingent protection has
given way to another, tillthe time economic integration could be achieved. It is difficult to
say that the guiding motive in any of these free trade agreements for the removal of
111
Ralf Boscheck,December 2000,’Trade, Competition and Antidumping - Breaking the Impasse!?’
Available on www.intereconomics.eu
Page | 71
antidumping rules and simultaneous incorporation of rules on competition has been the
idea that competition policy is a better tool to address the issue of ‘price discrimination’.
However this is not to suggest that India cannot explore the idea of incorporating rules on
competition in the free trade agreements that it enters with its trading partners. Whether
these rules shallreplace provisions on antidumping is a question that needs evaluation on
a case-by-case basis.
India’s decision on whether to altogether remove the provisions on antidumping in the

free trade agreements to which it is party should be based upon an analysis of the extent
to which it uses antidumping measures to protect its domestic industry as compared to the
other contracting parties to the agreement. If it is a more frequent user of such measures,
then the costs incurred in removing rules on antidumping may be higher than the ensuing
benefits and India may very well consider retaining them in the free trade agreement.
Nevertheless, if India decides to altogether remove provisions on antidumping in light of
the significantly high degree of economic integration with its trading partners (parties to
the agreement), it may be useful to examine the possibility of inserting provisions for
other forms of contingent protection such as safeguards so that the risk of exports from
the trading partners inundating its domestic markets and harming the domestic industry is
minimized. Also once rules on antidumping are removed, there would remain no
mechanism to check the practice of price predation, and to counter thisIndia should
ensure that relevant provisions of its competition law address such instances of predatory
pricing.112 In ChottulalDagav. CC 113,it was observed that anti-dumping is not so much of
a revenue measure, as it is a trade remedy measure.
112
Study on Antidumping and Competition law, submitted to Competition Commission of India by
Economic Laws Practice available at www.cci.gov.in
113
ChottulalDagav. CC (2008)226 ELT 516 (CESTAT)
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5.4Harmonious Usage of Both the Laws: Anti-dumping to be Protectionist as
well as pro-competitive:
The discussion in the previous part asserts that there anti-dumping has anti-competitive
effects on the free trade so it should be replaced or the free trade agreements should
inculcate the competition provisions in their agreements. But, to strike a balance between
both of the applicability of both of these laws an attempt should be made so as to mould
the anti-dumping laws in such a way so as to make it pro-competitive and protectionist
also for safeguarding the domestic producers against the dumping practices.
To harmonize dumping with the principles under competition law, one would have to
make three fundamental revisions:
(i) Redefine the domestic market to include all current suppliers or potential suppliers of
the product- regardless of whether the product is imported or domestically produced;
(ii) Revise the circumstances under which the conduct is challenged; and
(iii) Revise the evidence required to establish a breach. 114
To make the anti-dumping laws pro-competitive in nature, it will have to be integrated in

line with the competition policy of the country. The use of the laws should be such that
they complement each other rather than contradicting each other. In India, there is an
increased use of anti-dumping measure and the possible reasons for the same can be non-
competitiveness of the domestic industry and increased imports. And technically this
should not be the case and therefore harmonization of these laws is essential.
On the face of it, it seems as a very easy process but it includes a cumbersome process to
merge to laws and make them complement each other, which will be followed by joint
handling of cases by both of the governing bodies. In case of India, the competition
commission of India and the DGAD, which deal in competition laws and anti-dumping
laws respectively.
114
Kevin Harriott, June 2010, ‘Antidumping And Competition Law In Conflict’, Competition Bureau
Chief, p.13
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This harmonization process can be followed by the cooperation at the level of both of the
anti-dumping and anti-trust authorities. A two tier approach can the adopted in AD and
AT cases. In such a framework an anti-dumping case will first be judges using AT
criteria and only if it passes them, would it be allowed to proceed in an AD case. Thus
AD actions would only be justified if there were concern about abuse of market power,
reducing the competitiveness in the market. Linking AT and AD in such a way would
allow AT shaping AD in its own way115
115
Ian Wooton and Maurizio Zanardi, “Trade and Competition Policy: Antidumping versus Anti-Trust”
available at: www.gla.ac.uk/
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Chapter6: CONCLUSION AND SUGGESTION:
After studying the intricate details of anti-dumping and competition laws, we can
conclude saying that though these laws have points of conflict but they complement each
other. The rationale of both the laws is diverging as one aims at promoting competition
whereas other indirectly tries to hinder free and fair trade in the market. Trade barriers
like anti-dumping reveal the split between buyers and sellers. Sellers and consumers want
as many choices as possible, while producers want to limit choices. The present anti-
dumping laws of WTO member nations are not to serve the consumer interest; on the
contrary, it mostly affects the consumer interest. Only, EU has included the provisions of
“community interest” and the concerned authorities are required to look into three
elements of notion of national welfare: local consumer surplus, domestic firms profit and
possible tariff revenue. In India, such a provision is missing this is why the AD laws in
India are not consumer oriented.
The substantial provisions of both the laws have a parallelism in them like in AD laws
there is ‘domestic market’ similarly in competition laws there is ‘relevant market. Firstly,
both the laws seek to prohibit price discrimination by the enterprises which are practiced
in the form of predatory pricing conduct that can cause injury to the domestic market.
Anti-dumping laws and competitions laws aim at remedying "transnational price
predation" and public interest. Anti-dumping investigations are attracted when an
exporter sells his products at a price below that of the price at which he sells in the
country of origin. Anti-dumping is focused on the sales price as opposed to cost of
production. Secondly, we can also identify that there is a parallelism in these laws with
respect to the basis or reasons for application of these laws. Under anti-dumping laws, the
designated authorities are required to identify the injury to the domestic market and under
the competition laws; the competition authorities ascertain the appreciable adverse effect
of the conduct on the competition. Thirdly, the essence of these two laws is the extra-
territorial nature; they seek to address the issues which might have originated outside
India but have an impact in India.As per the provisions of the WTO AD Agreement,the
investigating authority can impose sanctions against a third country, if the industry of
another memberof the WTO (not the nation of the investigating authority) is suffering
Page | 75
injury on account of the thirdcountry’s conduct in the Indian market. The anti-dumping
measures by and large effect the free trade in an economy; it disrupts the competition by
hindering free and fair trade.
The analysis of anti-dumping measures in Indian jurisprudence, it can be inferred that its
used liberally. It highlights the protectionist bias of the law towards domestic countries.
Granting import protection to domestic industries is not always done with the economic
rationale and is consequently at the cost of consumer welfare. This brings in picture an
important question: Are the anti-dumping laws are providing protection for curbing
unfair trade, or is it for discouraging competition?
It can therefore be concluded that in this era of liberalization and free trade economies,
anti-dumping provides unnecessary discretionary powers to the national authorities,
which are being recklessly used as a protectionist tool for distorting international trade.
After analyzing the study, the following suggestions can be given as per the India’s way
of dealing with anti-dumping laws and anti-competitive laws simultaneously. Some of the
authors give the harsh suggestions of uprooting the anti-dumping laws from its roots and
to entrust the competition laws with the responsibility of handling such situations. But if
we are able to appreciate the idea that the rules of interpretation of law also call for a
harmonization of laws in case of conflict, then balancing between these laws will be
easier and the following suggestions would be fruitfully applicable:
1. Integration of Competition Laws and Anti-dumping Laws:
As discussed in the earlier parts of the study that attempt should always be made to
harmonize the anti-dumping and competition laws. It is suggested that both the laws
should be integrated in such a way that they complement each other rather than
contradicting one another.
The Competition laws encapsulate consumer interest more holistically therefore the
competition laws should play a central role in shaping the anti-dumping laws. This is
because the enforcement of competition laws in trade cases is of particular importance
Page | 76
since it limits the risk that domestic producers may use it as a threat of initiating action
under the domestic anti-dumping laws in order to eliminate the fair competition from the
foreign producers. It results in entering of domestic producers into anti-competitive
practices of restricting competition.
2. Adoption of two tier approach-
The harmonization will include a redefinition of a two tier approach, where an anti-
dumping case shall first be judged by the Competition law authorities and if it passes
only then it shall proceed as an anti-dumping case. This will result in a stricter criterion
for the determination of predation and will reject the frivolous and bogus complaints. In
Indian context, this approach shall be mutually applicable to Competition Commission of
India and the DGAD (Directorate General of Anti-dumping and Allied Duties). The
cooperation at these two levels will make this approach feasible. So, if any of the case of
anti-dumping is reported the application should first be assessed by the CCI and after
scrutinizing its competitive aspects and being satisfied that imposition of anti-dumping
wouldn’t result in anti-competitive effect, it shall forward the application to DGAD.
3. Addition of Public Interest Clause:
Every government policy should serve the interest of the governed to the extent that
promoting the welfare of many consumers, rather than welfare of few domestic
producers, harmonization should involve amending AD laws to confirm with the
competition laws.
4. Filtering the definition of Potential injury:
It is the need of the hour to filter the definition of potential injury and it more specific and
narrow. Under the anti-dumping laws, offering a product in the export market at a price
lower than its normal value is sufficient to trigger an investigation. It has been suggested
that price of any good is determined by the characteristics of the market in which the
product is sold. All factors being constant, prices tend to be higher when the consumers
are less sensitive to price increase.
Page | 77
The fact that the export price is lower than the normal value is no more indicative of the
potential harmful effect of dumping. A more logical and rational touchstone for
challenging a conduct is the extent to which the exporter’s price is below the cost of
making the product available to the consumers in the domestic market.
5. Strict Application of Anti-dumping duties:
After following the two-tier system of dealing with the anti-dumping applications would
reduce the unnecessary complaints. Further it is suggested that anti-dumping duties
should be applied in most serious cases, where material injury is so intense that it can
affect the industry substantially. A liberal application of anti-dumping duties hinder trade
at a massive level like India's decision to impose anti-dumping duty on imports of
polypropylene from Saudi Arabia and Oman is being alleged to be a protectionist
measure that will artificially reduce competition. Similarly, India's decision to impose
antidumping duty on phosphoric acid from countries across the globe (including China,
Korea, Israel, Taiwan etc.) are means adopted by the monopoly holding Indian industries
to systematically eradicate any kind of competition within the domestic Industry; in order
to sustain their market power and continuously increase prices of their product. By and
large, the provisions of anti-dumping laws have been blatantly abused, which if examined
under the principles of competition law may not be found to be justifiable and sustainable
at all. Therefore to minimize the use of anti-dumping laws as a protectionist tool for the
domestic producers and to limit the discretionary powers of the authorities more explicit
rules should be established and the process should be made more transparent.
6. Restricting the definition of domestic industry:
The definition of domestic industries should be narrowed down to the level that it
eliminates the back door entrants who benefit from the anti-dumping duties. And those
entrants are basically inefficient and non-competitive lot which tries to come under the
umbrella of domestic producers and reap the benefits of driving away competition though
AD duties. The changed definition should confirm the concept of relevant market in the
competition laws which will serve dual purpose of limiting the meaning and making it
easier for the competition authorities to asses it.
Page | 78
BIBLIOGRAPHY
BOOKS
Bernard M. Hoekman, Michel M. Kostecki, The Political Economy of the

World Trading System: The WTO and Beyond, 2nd edition, Oxford University
Press, USA
SheelaRai, Anti-Dumping Measures under GATT and WTO, Eastern Book CO., 1st
edition,2004, Eastern Book Co.
SurendraBhandari, WTO and Developing Countries,1st edition, 1998, Deep and

Deep Publications Pvt. Ltd.
K.D Raju, World Trade Organisation Agreement on Anti-dumping – A GATT and

Indian Legal Jurisprudence, First Indian Reprint , 2008 Wolters Kluwer India Ltd
M.J Finger ,Anti-dumping: How it works and who gets hurt, 1993, University of
Michigan Press.
S R Myneni, International Trade law, 2012, 2nd edition, Allahabad Law agency.
RavindraPratap, India at the WTO Dispute settlement System, 1st edition,2004,

Mayank Publications Pvt, Ltd
VS Datay, Customs law practice and procedure, 2013 edition, Taxman Publication
Pvt Ltd.
Anti-dumping- A guide, Directorate General of Anti-dumping and Allied Duties,

Ministry of Commerce, Government of India, available online at commerce.nic.in
Page | 79
ARTICLES;
“Anti-dumping Law and Practice: an Indian Perspective”,AgarwalAradhana, ,
April 2002, Working PaperNo. 85, ICRIER
“Antidumping And Competition Policy: Total Strangers Or Soul Mates?”,Rahul
Goel,published by Manupatra, available at http://www.manupatrafast.com/
“Trade, Competition and Antidumping - Breaking the Impasse!?”,Ralf Boscheck,

December 2000, Available on www.intereconomics.eu
“Antidumping And Competition Law In Conflict”, Kevin Harriott, June 2010,’

Competition Bureau Chief
“Trade and Competition Policy: Antidumping versus Anti-Trust” ,IanWooton and

Maurizio Zanardi, available at: www.gla.ac.uk/
STUDY/RESEARCH PAPER
Study on Antidumping and Competition law, submitted to Competition

Commission of India by Economic Laws Practice available at www.cci.gov.in
Naveen Chugh, ‘Antidumping And Competition Law: Indian Perspective’, 2013,

Competition Commission of India, available at www.cci.gov.in
WEBSITES
www.vanbaelbellis.com/
http://www.eximguru.com/
http://commerce.nic.in/
http://www.jstor.org/
Page | 80
http://eur-lex.europa.eu/
http://europa.eu
http://www.nortonrosefulbright.com/
http://www.cci.gov.in/image
http://www.international.gc.ca/
http://enforcement.trade.gov/intro/index.html
http://definitions.uslegal.com/f/fair-competition/
//commerce.nic.in/t
www.wto.org/
STATUTES:
The Customs Tariff Act, 1975 (Act 51 of 1975)
The Competition Act, 2002 (Act12 of 2003)
The COUNCIL REGULATION (EC) No 1225/2009 of 30, November 2009 on

protection against dumped imports from countries not members of the European
Community.
The Anti-Dumping Act, 1921
The United States Antidumping Act of 1916
The U.S Tariff Act of 1930
The WTO Agreement on Anti-dumping (Agreement on Implementation of Article

VI of the General Agreement on Tariffs and Trade 1994)
Page | 81

Chapter 1:INTRODUCTION: 1.1 Background

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Chapter 1:INTRODUCTION: 1.1 Background

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Chapter 1:INTRODUCTION

After the introduction of LPG (Liberalization, Privatization and globalization) in year

The major objective is to understand the interaction of anti-dumping laws and

4. To identify the conflicts and complementarities between antidumping and competition

5. To highlight that has there been a misuse of the Anti-dumping in terms of a

To do research on the given topic the non-empirical or doctrinal method is adopted.

2.1 What is Dumping?

Dumping defined in the as sale of goods in foreign market at low price. 8

A product is to be considered as being dumped i.e. introduced into the commerce of

Garten advanced four major reasons for dumping:

i. Closed home market of exporters.

a) What are the effects of dumping on importing countries?

 The domestic industry faces a decline in demand and profits.

 A response to unfair trade

As it has to be kept in mind that trade liberalization is also important to be observed,

Need of Competition laws for free and fair trade?

3.1 Anti-dumping Laws in other Jurisdictions:

To have a better understanding, we would study the position of anti-dumping laws in

The International Trade Administration (ITA) of the U.S. Department of Commerce is

The anti-dumping investigations are initiated on the basis of a petition requesting an

1. a manufacturer, producer or wholesaler in the United States of a like product;

An investigation proceeds as follows:

To determine whether a dumping margin exists, Commerce subtracts the weighted-

ITC Injury Analysis:

2. Changed Circumstances Reviews

3. Five year ‘sunset’ reviews-

4.Changed Circumstances Review

An Analysis of USA’s Anti-dumping laws and Competition Laws :

By and large the anti-dumping and competition law in the US is carried on

A product is to be considered as being dumped if its export price to the Community is

 Information on changes in the volume of imports of the product concerned and

The complaint is considered to have been made by or on behalf of the EU industry if it is

The complaint is examined by an advisory committee, which consists of representatives

The complaint may be withdrawn prior to initiation of the investigation. 43

 the consequent impact on the EU industry concerned, particularly in relation to

Imposition of definitive anti-dumping duties49

The duty must be imposed on a non-discriminatory basis on imports of a product found to

An anti-dumping measure only remains in force as long as is necessary to counteract the

There is a well-developed jurisprudence with respect to the competition and anti-duming

 Direct leverage of anti-dumping duties.

Undertakings given by exporters:

 There is an agreement between the community producers restricting competition.

a) The concerted practices of domestic producers.

A parallelism in the anti-dumping and competition proceedings may be witnessed while

It is imperative to understand whether interest of the community call for investigation to

Stated Aims The US The EC India WTO’s

Remedying the injury Yes Yes Yes Yes

Addressing Predatory Yes

Consumer Welfare No Yes No No

The World Trade Organisation Agreement on Anti-dumping consists of the anti-dumping

2. Determination of injury and casual relationship:

It basically highlights that determination of injury should be based on ‘positive injury’

 A significant increment in the dumped articles

Any AD investigation shall be based on the written request by or on behalf of the

7. De Minimus dumping margin and rejection of Applications:

The procedures to be followed and the evidentiary requirement for an anti-dumping

They consist of:

 Notice of, opportunity to defend and treatement of confidential information;

Article 7 of ADA encapsulates a striking provision of provisional measures which can be

10. Price Undertaking:

11. Imposition and collection of Anti-dumping duties

13. Judicial Review