Commerce ministry to reconstitute DGAD.

New Delhi: The finance ministry has rejected a proposal by the commerce ministry to merge the anti-dumping and import safeguard bodies to be able to more effectively counter protectionist measures imposed by developed economies.

Anti-dumping and countervailing measures in India are administered by the Directorate General of Anti-Dumping and Allied Duties (DGAD), which functions under the commerce ministry.

Safeguard actions such as temporary restrictions on the import of a product or higher duties come under the ambit of the Directorate General of Safeguards, which functions under the finance ministry.

The commerce ministry had in April proposed merging these two bodies into one called the Directorate General of Trade Remedies (DGTR), which will be similar to the US International Trade Commission (USITC) and function under the commerce ministry.

However, despite the setback, the commerce ministry has decided to reconstitute DGAD, naming it DGTR as earlier proposed, and plans to build two separate verticals under it for handling anti-dumping and countervailing measures. At present, DGAD is under-staffed and handles both anti-dumping and countervailing measures.

“Our idea was to put the three verticals of trade remedies—anti-dumping, countervailing and safeguards—under one umbrella. Now that the revenue department wants to retain the Directorate General of Safeguards, we will make a smaller proposal to the government. We will have a separate vertical under the new body for countervailing measures as such measures are beginning to proliferate throughout the world. It’s a trend of protectionism globally. Developed countries are using it because it is faster and more opaque in the way it is implemented. It is necessary for us to develop the expertise,” a commerce ministry official said, requesting anonymity.

Anti-dumping duties are imposed if a country dumps goods in another country at a much cheaper price than it normally charges in its own home market. Countervailing duties (CVD) are levied on imported goods to offset export subsidies offered to producers in the exporting country.

Safeguards are imposed as emergency measures to limit import of goods temporarily if domestic industry risks being harmed by a surge in imports.

DGAD conducts anti-dumping and CVD investigations and makes recommendations to the government on imposition of anti-dumping measures. While the department of commerce recommends anti-dumping duties, it is the ministry of finance which levies such duty.

The Standing Board of Safeguards, chaired by the commerce secretary, considers the recommendations of the DG (Safeguards) and then recommends the imposition of a safeguard duty to the finance ministry, which levies the duty.

According to the World Trade Organization (WTO) website, India initiated the most safeguard investigations in 2014, seven, followed by Indonesia and Turkey with three each. India also imposed the largest number of final measures—four. India undertook anti-dumping action in 13 cases in 2014, the third highest after Brazil and the US.

The US imposed CVD on import of hot-rolled carbon steel flat products from India in 2012. India dragged the US to the WTO dispute settlement panel, but in December 2014, it secured only partial relief. While the appellate body disputed India’s challenge against an earlier ruling that upheld the US’ countervailing measures on Indian hot-rolled steel flat products, it disputed the way the US calculated CVD.

India is planning to approach the compliance panel of the WTO as the US has failed to amend its domestic regulations to comply with a WTO appellate body verdict on CVDs on import of hot-rolled carbon steel products from India.

“We are well above the global import prices. How could we be dumping anything? Every country is now trying to protect their manufacturing,” another commerce ministry official speaking on condition of anonymity said in April.

Source : livemint.com