Anti-dumping duty and Competition Law in India

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TABLE OF CONTENT
S.no. Particulars Page no.
1. List of Abbreviations used 2
2. Introduction 3
3. Dumping 4
4. Anti-dumping 4
5. Difference between Normal Custom duty and Anti-
Dumping duty
4
6. The legal framework for Anti-dumping measures in India 5
7. Justifications for antidumping duty 5
8. WTO and Anti-Dumping Agreement 6
9. Competition Law in India 6
10. Conflict between anti-dumping law and competition law 8
11. Overlaps 9
12. Antidumping and Competition Provisions in Free Trade
Agreements/Regional Trade Agreements
12
13. Conclusion 12
14. References 14

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List of Abbreviations used
Abbreviation Full Form
GATT General Agreement on Trade and Tariff
WTO World Trade Organization
MRTP Monopolies and Restrictive Trade Practices
CCI Competition Commission of India
DGAD Directorate General of Anti-Dumping and Allied Duties
FTA Free Trade Agreement

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1. Introduction
The dumping subjects are one of the hottest topics in the international trade scene because of
its multitude possible approaches and actors who are involved. Dumping occurs when a
foreign producer sells a product in a country at a price that is below that producer's sales price
in the “home market”, or at a price that is lower than the cost of production. This is an unfair
trade practice which can have a distortive effect on international trade as it keeps competitors
out of a particular market. Dumping can only occur at places where imperfect competition
and where the markets are segmented in a way such that domestic residents cannot easily
purchase goods intended for export1. Dumping can be defined in various ways, but most
generally accepted approach is: price discrimination between national markets2 as defined by
Jacob Viner. According to Viner, anti-dumping can lead to a predatory dumping which is to
sell products in foreign market lower than the home market price, then that company would
push its competitors in the foreign market. Consequently, it can raise the price abnormally
high and set monopoly to make its loss. Anti-dumping measures rectify the situation arising
out of the dumping of goods and its trade distortive effect. It is essentially a mechanism of
defence provided for under Article VI of GATT 1994 which allows all member countries to
apply anti-dumping measures wherever warranted for protecting their domestic industry from
unfair Competition. India is availing of this facility like all other member countries of the
WTO. Anti-dumping duty is recognized as an instrument for ensuring fair trade and is not a
measure of protection per se for the domestic industry. It provides relief to the domestic
industry against the injury caused by dumping. Anti-dumping has acquired a special
significance primarily as a means of checking unfair trade practices and promoting fair
competition. It is a subtle measure of protection which comes under the non-tariff barriers
and is product and source specific. Antidumping duties were initiated with the intention of
nullifying the effect of the market distortions created due to unfair trade practices adopted by
aggressive exports. They are meant to be remedial and not punitive in nature. A harmful to
the domestic producers as their products are unable to compete with the artificially low prices
imposed by the imported goods. As a method of protection to the domestic industries, anti-
dumping duties are thus levied on the exporting country which has been accused of dumping
goods in another country. The analysis of the objectives of the two sets of laws as expressly
stated in the legislations in India reveals that prevention of unfair business practices is
common interface between the two. While competition laws are primarily aimed at protecting
and promoting competition in markets, antidumping laws are aimed at remedying the injury
to the domestic industry which may arise due to dumping, which in essence amounts to
protection of competitors. The analysis of the objectives of the two sets of laws as expressly
stated in the legislations in the subject countries reveals that prevention of unfair business
practices is common interface between the two. While competition laws are primarily aimed
at protecting and promoting competition in markets, antidumping laws are aimed at
remedying the injury to the domestic industry which may arise due to dumping, which in
essence amounts to protection of competitors
1 Alexandru Moldovan, Antidumping and trade diversion in theUnited States of America (2013)
2 Jacov Viner, Dumping: A problem in International Trade (1923)

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2. Dumping
Often, dumping is mistaken and simplified to mean cheap or low priced imports. However, it
is a misunderstanding of the term. Dumping, in its legal sense, means export of goods by a
country to another country at a price lower than its normal value. Thus, dumping implies low
priced imports only in the relative sense (relative to the normal value), and not in absolute
sense. In simple parlance, the normal value is the selling price of the product in the exporting
country. Import of undervalued products to evade customs duty or through illegal trade
channels like smuggling does not fall within the purview of anti-dumping measures.
3. Anti-dumping
Dumping is said to have taken place when an exporter sells a product at a price less than the
price prevailing in its domestic market. However, the phenomenon of dumping is per se not
Condemnable as 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 supply and
demand conditions. It is also recognized that price discrimination in the form of the dumping
is a common international commercial practice. It is also not uncommon that the export
prices are lower than the domestic prices. Therefore, from the point of view of anti-dumping
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.
4. Difference between Normal Custom duty and Anti-Dumping duty
Although anti-dumping duty is levied and collected by the Customs Authorities, it is entirely
different from the Customs duties not only in concept and substance, but also in purpose and
operation. The following are the main differences between the two: -
 Conceptually, anti-dumping and the like measures in their essence are linked to the
notion of fair trade. The object of these duties is to guard against the situation arising
out of unfair trade practices while customs duties are levied as a means of raising
revenue and for overall development of the economy.
 Customs duties fall in the realm of trade and fiscal policies of the Government while
anti-dumping measures are trade remedial measures.
 The object of anti-dumping is to offset the injurious effect of international price
discrimination while customs duties have implications for the government revenue
and for overall development of the economy.
 Anti-dumping duties are not necessarily in the nature of a tax measure in as much as
the Authority is empowered to suspend these duties in case of an exporter offering a
price undertaking. Thus such measures are not always in the form of duties/tax.
 Anti-dumping duties are levied against exporter / country in as much as they are
country specific and exporter specific as against the customs duties which are general
and universally applicable to all imports irrespective of the country of origin and the
exporter.

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5. The legal framework for Anti-dumping measures in India
Sections 9A, 9B and 9C of the Customs Tariff Act, 1975 as amended in 1995 and the
Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped
Articles and for Determination of Injury) Rules, 1995, framed there under form the legal
basis for antidumping investigations and for the levy of anti-dumping duties in India. The
Directorate General of Anti-Dumping and Allied Duties (DGAD) in the Ministry of
Commerce and Industry (Department of Commerce) is responsible for Anti-Dumping and
Countervailing Duty actions in India in consonance with WTO and the National Law. DGAD
initiates investigations on the basis of prima-facie evidence of dumping, injury and causal
link thereof. The domestic industry has to make available a fully documented petition before
the case can be taken on record. During such documentation, the Officers in the Directorate
assist the domestic industry. After initiation of investigation, the Designated Authority is
required to follow specified procedures to give a fair opportunity to all the interested parties
domestic as well as foreign to defend their cases. Besides examination of voluminous trade
data, the price trends, normal values, product analysis etc., the Investigating Officers are
required to carry out detailed verifications to analyse cost in the domestic industry, as well as
prices indicated by exporters in the exporting countries. The findings-provisional as well as
final-are required to be supported by sufficient evidence and cogent financial analysis.
DGAD is endeavoring that preliminary findings are recommended after the completion of 60
days from the initiation of investigation. Final findings are to be given within 12 months of
initiation of the case. After completion of investigations, DGAD recommends Preliminary
findings/Final findings to Department of Revenue, Ministry of Finance, which notifies the
imposition of Anti-Dumping Duty. The law provides that an order of determination of
existence, degree and effect of dumping is appealable before the Customs, Excise and Service
Tax Appellate Tribunal (CESTAT). However, as per the judicial view, only the final
findings/order of the Designated Authority/Ministry of Finance can be appealed against
before the CESTAT. No appeal will lie against the Preliminary findings of the Authority and
the provisional duty imposed on the basis thereof. The Appeal to the CESTAT should be filed
within 90 days from the date of issue of the notification by the Central Government imposing
anti-dumping duty.
6. Justifications for antidumping duty
In free trade, firms are allowed to charge different rates in different markets. The result would
be that firms would charge lower prices in foreign markets and higher prices in domestic
markets, leading to material injury to the domestic producers. Had price discrimination taken
place by a monopoly firm within one economy, the government would have intervened to
stop consumer exploitation by enforcing an Act similar to the MRTP Act, in India. Hence, in
the international context, it is the anti-dumping duty that protects the domestic producers
initially and consumers in the long run. The duty is justified because in case of many
industries the startup period is long and start-up costs are also high. Once these firms are
forced out of the market as a result of dumping by exporters, it is very difficult for them to
restart when the same exporters raise prices. Usually, the intentions of charging such low
prices to foreign consumers is to be able to wipe out the domestic industries and eventually

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acquiring monopoly power in the foreign market (i.e. using predatory pricing). Thus it is on
this ground that the anti-dumping duties have been justified. The main intension is to protect
the domestic industries.
7. WTO and Anti-Dumping Agreement
The Agreement on Implementation of Article VI of the General Agreement on Tariffs and
Trade 1994 governs the application of antidumping measures by Members of the WTO. The
provisions of the Agreement were first negotiated during the Kennedy Round (1967) and
later substantially revised during the Tokyo Round (1979) of GATT negotiations. Anti-
dumping measures are unilateral remedies which may be applied by a Member after an
investigation and determination by that Member; in accordance with the provisions of the
Agreement, that an imported product is dumped and that the dumped imports are causing
material injury 3 to a domestic industry producing the like product. The Agreement sets out
rules for the conduct of anti-dumping investigations, including initiation of cases, calculation
of dumping margins, the application of remedial measures, injury determinations,
enforcement, reviews, duration of the measure and dispute settlement. The Agreement applies
to trade in goods only. Trade in services is not covered by this agreement. The Agreement
provides for the right of contracting parties to apply anti-dumping measures, i.e. measures
against imports of a product at an export price below its normal value if such dumped imports
cause injury to a domestic industry in the territory of the importing contracting party4. In
particular, the Agreement provides for greater clarity and more detailed rules in relation to
the method of determining that a product is dumped, the criteria to be taken into account in a
determination that dumped imports cause injury to a domestic industry, the procedures to be
followed in initiating and conducting anti-dumping investigations5, and the implementation
and duration of anti-dumping measures6. In addition, the Agreement clarifies the role of
dispute settlement panels in disputes relating to antidumping actions taken by domestic
authorities.
8. Competition Law in India
In India, competition Act, 2002 was enacted and implemented, with an objective of
‘protection and promotion of competition in market and consumer welfare’. The Indian
Competition law contains an additional objective of ‘competition advocacy which is not
specifically stated in any other country’s competition legislation. The Competition Act, 2002
repealed the MRTP Act, 1969 and the focus was shifted from stopping the monopolistic
practice to encouraging the competition in market.
The Act provides a very wide mandate for the Competition Commission of India to enforce.
Apart from it rather broad objective, the Act contains provisions which have rather become
standard in the competition jurisdictions all across the globe. These are the provisions relating
3 Broadly, injury may be analysed in terms of the volume effect and price effect of the dumped imports. The
volume effect of dumping relates to the market share of the domestic industry vis-à-vis the dumped imports
from the subject country/ies while with regard to the price effect, the Designated Authority shall consider
whether there has been a significant price under cutting by the dumped imports as compared with the price of
the like product in the domestic market, or whether the effect of such imports is otherwise to depress prices
to a significant degree or prevent price increase which otherwise would have occurred to a significant degree.
4Article3.5 of GATT
5 Article6 of GATT
6 Article11 of GATT

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to anti-competitive agreements, abuse of dominant position and regulation of combinations.
In the respect of anti-dumping law the provisions relating to abuse of dominant position and
anti-competitive agreements assume importance. In respect of dominant position it is
pertinent to note that whereas dominance is not frowned upon by the Competition Act, 2002
abuse of dominance is certainly frowned upon by the legislation. Another significant feature
in the context of these provisions of the Act is that anti-competitive agreements and abuse of
dominance are to be prohibited by the orders of the Commission whereas the mergers are to
be regulated by the orders of the e of Commission. This difference in law is of immense
significance. Whereas the former two prevent enhancement of consumer welfare the latter
drives economic growth. Hence, the distinction has been maintained.
(i) Section 4 of Competition Act
In respect of abuse of dominant position, Section 4(2) enlists the circumstances when an
enterprise shall be considered to be abusing its dominant position. It states:
(2) There shall be an abuse of dominant position under sub-section (1), if an enterprise,-
(a) directly or indirectly, imposes unfair or discriminatory-
(i) condition in purchase or sale of goods or service; or
(ii) price in purchase or sale (including predatory price) of goods or service; or
(b) limits or restricts-
(i) production of goods or provision of services or market therefor; or
(ii) technical or scientific development relating to goods or services to the prejudice of
consumers; or
(c) indulges in practice or practices resulting in denial of market access; or
(d) makes conclusion of contracts subject to acceptance by other parties of
supplementary obligations which, by their nature or according to commercial usage,
have no connection with the subject of such contracts; or
(e) uses its dominant position in one relevant market to enter into, or protect, other
relevant market.
(ii) Abuse of Dominant Position
One of the most vigorous users of the predominant international trade defence measure, i.e.
antidumping duty, India has an unenviable and unfortunate reputation for extreme
protectionism being afforded to its domestic industries through the use of anti-dumping
investigations and duties. Anti-dumping as an international trade defence measure is by
definition protectionist of the Indian market and is based on the following three touchstones:
(i) that there is a significant difference between the normal value of a commodity or product
and the price at which it is exported to India;
(ii) that the difference between the normal value and the export price to India greater than
certain tolerances is per se evidence of dumping;
(iii) if this dumping causes or is likely to cause injury to the domestic industry, antidumping
duties would be levied.

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The effect of anti-dumping duty usually renders the export of the product to India
economically unviable. Now, the touchstone of competition law is to avoid an appreciable
adverse effect on a relevant market. Quite naturally, the availability of competing products,
whatever their source, provides wider and more economic options to consumers in the
relevant market for a product. Let us consider a practical example. Two dominant Indian
manufacturers of a product jointly have in excess of half of the domestic production of the
product. Under the rules, a petition for imposition of antidumping duties can be filed by the
two as being representative of the domestic industry in India. Let us assume that a few
smaller domestic players and exports to India by foreign entities constitute the rest of the
supply of the product to the market in India. There is no substantive ideological divergence
between anti-dumping law and competition law on the acceptability of the dominant nature of
these petitioners. Nothing in competition law disapproves dominance itself as long as it is
good. But in case the anti-dumping investigation takes place. This investigation will
determine as to whether the users of the product manufactured by the two dominant
companies in the market will be left with a reduced choice and constrain them to purchase
willy-nilly from the two dominant companies. The nature of anti-dumping proceedings, the
costing method usually resorted to by the petitioners, and the reluctance of foreign exporters
to disclose sensitive costing information most often means that establishing a proper normal
value and that there is no difference between the normal value and the export price to India is
not possible.
(9) Conflict between anti-dumping law and competition law
The very conflict that both the laws pose to have is in terms of goals which the respective
laws seek to achieve on one hand the goal of competition law is to promote competition, it
attaches sanctions to only such price discrimination which adversely affect competition in
markets; even if that implies that some competitors may be harmed in the process. On the
other hand antidumping law while addressing ‘price discrimination’ does not take into
account competition concerns and its stated goal is to protect “domestic industry” and in fact
ends up as an instrument to protect competitors. Thus it seems to be in direct conflict with
Competition Law. Competition and antidumping laws were initially thought to be
complementing each other. Over the years however, this position has changed. First,
competition laws have widened their reach to include conduct of firms who are outside the
jurisdiction, which affect the national market. Second competition law has evolved much
faster than anti-dumping laws. By contrast Anti-dumping laws 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 distortion7. Some commentators have even
argued that the two laws can sometimes work at cross purposes as competition laws are
aimed at curbing the market power of domestic producers, whereas antidumping law attempts
to use market power in order to shift rents away from foreigners.45 Antidumping laws were
7 Ian Wooton and Maurizio Zanardi,“Tradeand Competition Policy:Antidumping versus Anti -Trust”

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initially enacted to address the situation of ‘international ‘price predation’ and were
considered as extension of competition laws. However over the years the focus of
antidumping law seems to have changed and antidumping laws as they exist today do not
seem to be concerned with the issue of predatory pricing. To this extent it can be said that
antidumping law no longer addresses competition related concerns and since it seems to
attach sanctions to every instance of international price discrimination which can be shown to
cause injury to the domestic industry, it could very well be in conflict with competition law.
While competition laws are primarily aimed at protecting and promoting competition in
markets, antidumping laws are aimed at remedying the injury to the domestic industry which
may arise due to dumping. It can be concluded that the modern antidumping laws of today in
essence provide for protection of competitors.
Several authors have commented on the divergence of antidumping laws from their original
objectives8. The “evolution” in its objectives has resulted in a change in the way that
antidumping laws are being used and has consequently changed their ultimate effect on the
market and on competitive conditions. For example, 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 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 instances changed their interaction from complementary to
conflicting.
(10) Overlaps
There is also a tendency to confuse competition law and antidumping law and to regard them
as if they are the same. No doubt, the two concepts interrelate and also often do interface9.
However, they do differ, both practically and conceptually. While competition law is
concerned with ensuring that the activities of business undertakings do not damage the
competitive process, antidumping laws target allegedly ‘unfair’ trading practices of foreign
companies accused of exporting (or ‘dumping’) products into other countries at prices below
the cost of production, or below the price charged in domestic or third markets10. In the
modern era, while competition law concentrated on the pursuit of economic efficiency,
8 For instance,Shanker Singham,A General Theory of Trade and Competition - Trade Liberalization and
Competitive Markets, Cameron May, 2007
9 Peter D. Ehrenhaft, “Is Interface of Antidumping and Antitrust Laws Possible?”(2002) The George
Washington International LawReview, vol.34, No. 2,
10 ClaudeBarfield,“Antidumping Reform: Time to Go Back to Basics”Barfi eld,(Oxford,BlackwellsPublishing,
2005)

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addressing problems associated with concentrated economic power, antidumping law was
intended to create a politically popular form of contingent protection that bears little, if any,
connection to the prevention of monopoly. The political constituency for antidumping law is
not an antimonopoly constituency, but one for the protection of industries facing weak
markets or long term decline11. As has also been argued, the ‘unfairness’ to which
antidumping law is directed – prices that are too low – is generally seen in competition law as
evidence of the proper working of the competitive process, and as a phenomenon beneficial
to the consumers whom competition law fundamentally protects12. More succinctly,
competition law favours a dynamic, ever changing market of robust competitors;
antidumping favours a more static model of the market to protect investors and workers from
changes generated from abroad13. Despite these underlying differences between competition
and antidumping laws, there are types of dumping which if they occur, could definitely be
dealt with under the competition laws because they have the characteristics of anti-
competitive nature. These are predatory dumping, and strategic dumping14, both variants of
market power dumping. Thus, although competition laws and antidumping laws serve
historically different functions and address different constituencies, in some aspects they do
intermingle. There have therefore been calls in some quarters for antidumping laws to be
replaced altogether by competition laws and measures, though these calls are roundly rejected
in some quarters too. It should also be noted here that sometimes, anti-dumping measures
could actually, though unintendedly, be employed in a way that they would go contrary to the
rules of competition. It is possible for inefficient local companies to respond to legitimate
foreign competition, not by increasing the efficiency of their operations, but by persuading
their governments to restrict foreign competition. The weapon of choice here tends to be
antidumping law since these companies, having powerful connections, are able to make their
governments utilise the authority offered by the WTO Antidumping Agreement of 1994 to
impose arbitrary and punitive tariff measures on the threatening goods and services, and that
would effectively scuttle the foreign competition. This is an unwelcome irony that individuals
and interest groups who are committed to competition should watch out for and guard
against.
Issues regarding the areas of overlap
(i) Predatory Pricing
Under competition law ‘predatory pricing’ is understood as a deliberate strategy, adopted
usually by a dominant firm, to drive competitors out of the market by setting very low prices
or selling below the firm’s incremental costs of producing the output (often equated for
practical purposes with average variable costs) with intent to eliminate competition or
eliminate competitors. Once the predator has successfully driven out existing competitors and
deterred entry of new firms, it can raise prices and earn higher profits15.
11 AO Sykes (1998),“Antidumping and Antitrust: What Problems Does Each Address?”, in RZ Lawrence (ed.),
Brookings Trade Forum: 1998 (Washington,DC: Brookings Institution
12 Peter D. Ehrenhaft
13 Peter D. Ehrenhaft
14 ClaudeBarfield
15OECD glossary of terms

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‘Dumping’ is a type of international price discrimination, wherein an exporter sells an article
at “prices lower than those charged to domestic buyers, taking into account the conditions
and terms of sale.” As per the definition of ‘dumping’ as contained in the WTO Antidumping
Agreement (as well as the national antidumping legislations in the subject countries), the
limited requirement for ‘dumping’ to be condemned and sanctions to be attached against is
that, the ‘export price’ of the product alleged to be dumped should be less than the price at
which it is sold in the domestic market of the exporting country and that it should cause
‘material injury’ to the domestic industry for the ‘like product in the importing country. Thus
anti-dumping law is neither concerned with the requirement of ‘dominance’ nor ‘intention’,
unlike competition law wherein both these factors are as important conditions as the instance
of ‘price discrimination’.
(ii) Price Discrimination
Both anti-dumping and competition law seek to address the issue of ‘price discrimination’.
Antidumping law seeks to address all those forms of price discrimination, which cause or are
likely to cause material injury to the domestic industry. Competition law on the other hand
seeks to address only such price discrimination, which is ‘unfair’ or ‘discriminatory’
(including predatory) in nature and has an “appreciable adverse effect” on the market.
Under competition law only such price discrimination, which adversely affects competition
in markets and thus has negative consumer welfare impacts, is prohibited by competition
statutes. Under competition law such price discrimination is usually referred to as ‘unfair’ or
discriminatory pricing and a particular instance of price discrimination does not attract
sanctions if it can be shown that it is adopted to meet competition and does not affect the
conditions of competition in an adverse manner. This requirement therefore involves an
examination into welfare effects of the price discriminatory conduct. Certain instances of
price discrimination such as predatory pricing have been assumed to affect competition
negatively and cannot be justified on the grounds that they have been ‘adopted to meet
Competition.
In anti-dumping law price discrimination is synonymous with ‘dumping’. Jacob Viner
defined dumping as “price discrimination between national markets.” In international trade
dumping is said to occur when the sale of products for export is at “prices lower than those
charged to domestic buyers, taking into account the conditions and terms of sale.” According
to Article VI, GATT 1994, a product is said to be dumped when its export price is less than
its normal value, that is, less than the sale of a like product in the domestic market. The effect
of the instance of ‘price discrimination’ under anti-dumping is examined with the narrow
parameters of ‘injury’ only to the ‘domestic industry’ and once dumping and injury have been
established, then the examination does not take into account broader economic concerns, such
as consumer’s interest, the interests of other users of the product and the like whilst imposing
an anti-dumping duty16. With regard to the practice of antidumping law in India, it is noted
that though consideration of public interest in an antidumping investigation is not mandatory,
16 However to the limited extent that antidumpingrules in India as well as other countries such as USA
prescribethe ‘lesser duty rule’ (i.e. if a duty lesser than the margin of dumping is sufficientto remedy the
injury to the domestic industry then the antidumpingduty should be the lesser of the two), which inherently
take accountof consumer interest to some extent.

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but in limited instances even notwithstanding the positive recommendation by the Designate
Authority/ Ministry of Commerce, the Ministry of Finance has not imposed anti-dumping
duties and this may be due to public interest considerations. The process however is neither
formal nor transparent.
(11) Antidumping and Competition Provisions in Free Trade
Agreements/Regional Trade Agreements
A few studies have, introduced the idea of replacing antidumping with competition laws,
especially in free trade agreements (FTA)17. It has been suggested that the abolition of anti-
dumping laws in favour of harmonized antitrust laws enhances economic welfare, and offers
a practical solution to the global increase in anti-dumping 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 be examined 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 it18. There are currently four
regional trade agreements, in which the member countries have abolished the application of
antidumping measures amongst themselves: the European Union (EU); the European
Economic Area (EEA), which came into force in 1994 by the treaty signed between the EU
and the European Free Trade Association (EFTA); the Closer Economic Relations
Agreement (CER) between Australia and New Zealand; and the 1996 Canada-Chile free trade
agreement. In case of MERCOSUR19, member countries are eventually expected to phase out
antidumping laws in favour of harmonized competition law regime, but have not yet done so.
(12) Conclusion
The main objective of Anti-Dumping Law is to protect domestic industries. Does it mean that
less efficient industries must be protected? In fact according to Competition Act, 2002 less
efficient industries should shut-down and exit market if they cannot compete. Anti-Dumping
Law has a protectionist flavour which Competition Law has not. These both contradict, they
cannot exist together; they are oxymoron.
Over the past years it has been suggested that anti-dumping measures and competition
measures are mirror images, complementary mechanisms, and that one should take place of
the other. Anti-Dumping measures are, therefore not normally a means of restoring fair trade
(although sometimes may be). Rather they are protective mechanism. It would be very
optimistic to assume that the elimination of Anti-Dumping measures would easily follow
from the widespread institutionalization of competitive measures. Being a part of a
developing nation if I would have to choose between elimination of anti-dumping measures
in exchange of implementing competition rules it will be a wonderful bargain.
17 The Relationship Between Competition Policy and Anti-Dumping Law: The Canadian Experience,a study by
Lecenomics Inc.
18 Hang Zeng, “Antidumping and Competition: the Caseof China”,2005
19 Also known as Southern Common Market, is a Regional TradeAgreement (RTA) among Brazil,Argentina,
Uruguay and Paraguay,founded in 1991 by the Treaty of Asunción,which was later amended and updated by
the 1994 Treaty of Ouro Preto

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From the point of view of economics, there is no reason to support any anti-dumping law,
since price differentiation across markets is a legitimate and a perfectly rational, sensible and
legitimate profit-maximization action. Under this line of argument, there is no justification
for condemning certain export prices simply because they happen to be lower than prices in
other markets. Domestic price discrimination i.e., differences in pricing between one
country‘s domestic regional markets, normally is not penalized. There arguably is no
economic reason for treating ―international‖ price discrimination any more harshly by
imposing dumping duties. Of the different categories of dumping, only predatory pricing
dumping and most instances of strategic dumping raise overall welfare concerns. Yet, these
two forms of dumping pertain largely to the theoretical realm, as most anti-dumping cases in
the real world do not involve dumping as defined by these two categories and even
Competition Act is there to look after such predatory pricing.
Above all, if antidumping were to be a tool against unfair trade as it was initially meant to be,
it would be essential to reconsider the definition of dumping and think carefully what is fair
and what is not. Is it fair enough to accuse and penalize someone just because prices are not
equalized?
But before the things got worse reform is necessary. These rules and policies are needed to be
amended and a lot can be done. More transparent process of investigation is desirable: one
needs to know in details how a constructed price is calculated. Material injury requires more
careful scrutiny: is injury caused by dumping or just by higher competition? Consumers'
welfare also has to be taken into account, not only in text but also in practice.
One of the major proposals could be replacement of anti-dumping with competition
principles. One of the major concerns of dumping is predatory dumping i.e. a type of anti-
competitive event in which foreign companies or governments price their products below
market values in an attempt to drive out domestic competition. This may lead to conditions
where one company has a monopoly in a certain product or industry. The function of
Competition Commission of India is to take necessary action to address such an issue instead
of levying anti-dumping duties.
There is a need to review Anti-Dumping Law. Also there is a need to bring this issue in
competition policy because draft competition policy does not directly resolve this issue.
In order to give protection to domestic infant industries there is a need to make provision for
such reform in Competition Act or there is a need to interpret or expand the phrase, ensure
freedom of trade carried on by other participants‖ as stated in Section 18 of Competition Act,
2002. Ideally these duties should be abandoned but no country will do so till it is being
implemented in other countries. Thus the problem is needed to be solved at multilateral level.
It is difficult to create a new framework altogether for this issue. Therefore it will be better to
do some changes in existing framework so that it is beneficial for the whole economy. There
should be working group meetings on matters of concern (dumping and competition). The
change should maximize the welfare of Indian economy.

14. Page 14 of 14
References
 AO Sykes (1998), “Antidumping and Antitrust: What Problems Does Each Address?”
in RZ Lawrence (ed.), Brookings Trade Forum: 1998 (Washington, DC:Brookings
Institution)
 Alexandru Moldovan, Antidumping and trade diversion in the United States of
America (2013)
 Cadot Oliver, Grether Jean-Maries and Melo de Jaime, “Trade and Competition
Policy: Where do we stand?” Journal of World Trade, Vol. 34, No. June.
 Claude Barfield, “Antidumping Reform: Time to Go Back to Basics” Barfield,
(Oxford, Black wells Publishing, 2005)
 Haberler, Gottifried Von, The Theory of International Trade with its Application to
Commercial Policy. Translated by Alfred Stonier and Frederic Benham, New York:
Macmillan, 1937.
 Handbook on Anti-Dumping, Ministry of Commerce, Government of India
 Hang Zeng, “Antidumping and Competition: the Case of China”, 2005
 Ian Wooton and Maurizio Zanardi, “Trade and Competition Policy: Antidumping
versus Anti-Trust”.
 Jose Taraves de Araujo, Jr., Anti-dumping in the Americas, 9, OAS Trade Unit
Studies, 2001
 Jacov Viner, Dumping: A problem in International Trade (1923)
 OECD glossary of terms
 Peter D. Ehrenhaft, “Is Interface of Antidumping and Antitrust Laws Possible?” (200
2) The George Washington International Law Review, vol. 34, No. 2
 Shanker Singham, A General Theory of Trade and Competition - Trade Liberalization
and Competitive Markets, Cameron May, 2007
 Web sources:
(i) www.legalserviceindia.com
(ii) www.indlaw.com
(iii) www.cci.gov.in