DUMPING &

ANTI-DUMPING MEASURES

PRESENTED BY:

SHIVANI KAUL
DUMPING
• Selling the product at below the on-going market
price and/or below the cost of production.

• Defined as “the sale of goods in a foreign country at a

price which is lower than the selling price of the same
goods at the same time in the same circumstances in
domestic market, taking account of difference in
transport costs.”
OBJECTIVES

• To enter the foreign market- done by eliminating the

competitors in the foreign market.

• To sell surplus production .

• To develop trade relations- manufacturers sell their

output at lower prices .
TYPES OF DUMPING

1) Intermittent dumping:-

• When production of a product is more than the demand

in the home country, the stocks pile up even after sales.
In such a case, the producer sells the remaining stock in
foreign countries at low price without reducing the
prices in domestic countries. This is not continuous and
occurs at irregular intervals.
2) Persistent dumping:-

• The monopolist sells the remaining production in

foreign countries at a low price continuously (for a
prolonged time).

3) Predatory dumping:-

• The monopolist sells the product in a foreign market

at a low price initially with a view to drive away the
competitors and increase the price after they have left
the market. This is named because of the predatory
nature of the seller.
 EFFECTS OF DUMPING
ON IMPORTING AND EXPORTING
COUNTRIES
Effects on Importing country:

• The industry of the importing country experiences decline in

sales and profits.

• If done for longer period, it affects the survival of the industry

and also changes the industrial structure in the foreign country.

• If the dumping country increases the prices later, the

importing country would be at a loss both in terms of high
costs of imports and change in the structure of the domestic
industry.
Contd…

• Changes preferences of the consumers of the domestic

country, and if dumping is stopped, the country is forced to
import at higher prices.

• Dumping increases the deficit of the balance of payments of

the importing country.

• The importing country can benefit from dumping by imposing

anti-dumping tariffs as Indian govt imposed tariffs on cooking
oil dumped by the USA & Malaysia.
• Effects on the Exporting country:

• Consumers of the exporting country pay higher price,

while the consumers of foreign country enjoy the
product at a lower price.

• The exporting country finds market for the excess

production.

• The exporting country earns foreign exchange and it

contributes for the surplus balance of the BOP of
payments position.
ANTI DUMPING MEASURES
• The govts impose penalties and other measures on
imports, if they cause injury to the domestic industry.

• These penalties, duties and tariffs are called ‘Anti-

dumping’ measures.

• GATT allowed its members to apply these measures

after the Tokyo round.

• Later these measures were revised in Uruguay round.

• In view of the negative effects of dumping, the
importing country imposes anti-dumping measures
like:

1) Tariff duty: high rates of import tariffs on dumping,

so that price will be either equal to or more than that
of the domestic goods. Thus, it becomes
uneconomical to dump goods in the foreign country.

2) Import quota: in addition to tariff duty, restrictions

are put on the volume of imports.
3) Import embargo: bans the import of a particular
good or all the goods from the dumping country. This
is a retaliatory nature against dumping.

4) Voluntary Export Restraint: exporting country

realizes the negative effects of dumping and
voluntarily agrees to curb dumping.
Thank you