06 February 2020

Budget 2020 – Important changes in anti-dumping, countervailing and safeguard provisions

India is set to revise provisions relating to its trade remedy measures. While provisions relating to Safeguard duty have been proposed to be amended by the Finance Bill, 2020 as presented in the lower House of the Indian Parliament on 1-2-2020, Rules relating to Anti-dumping duty and Countervailing duty have been revised by notifications issued by the Ministry of Finance.


Safeguard measures:

Section 8B of the Customs Tariff Act, 1975 is being proposed to be substituted by Clause 114 of the Finance Bill, 2020 to allow Central Government to apply ‘safeguard measures’ which include

  • imposition of safeguard duty,
  • application of tariff-rate quota, or
  • such other measure as the Central Government may consider appropriate,

to curb the increased quantity of imports of an article to prevent serious injury to the domestic industry. 

The new Section 8B empowers the Central Government to conduct an enquiry and apply safeguard measures on an imported article which has been imported in such increased quantities, and under such conditions so as to cause or threaten to cause serious injury to domestic industry. 

In respect of tariff-rate quota as a safeguard measure, the Central Government shall not fix such quota lower than the average level of imports in the last three representative years for which statistics are available, unless a different level is deemed necessary to prevent or remedy serious injury. Further, the Government may allocate such tariff-rate quota to supplying countries having a substantial interest in supplying the article concerned. 


Anti-dumping duty:

Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 has been amended to strengthen the anti-circumvention measures by making them more comprehensive and wider in scope to take care of all types of circumventions of anti-dumping duty. 

Accordingly, ‘circumvention’ shall be considered as a change in the pattern of trade between any country and India or between individual companies in any country subject to measures and India, as a result of a ‘practice, process or work’ for which there is insufficient cause or economic justification other than the imposition of the duty; and where there is evidence of injury or that the remedial effects of the duty are being undermined in terms of the prices or quantities or both of the like product; and where there is evidence of dumping in relation to the normal values previously established for the like product. The new Rule 25 in this regard also states what ‘practice, process or work’ includes.

Further, Anti-dumping duty already imposed for co-operative un-sampled exporters or producers may also be extended to new producers/exporters. Sub-rule (3) has been inserted in this regard in Rule 22 of the Anti-dumping Rules. An Explanation has also been inserted to provide for parameters for the “period of investigation”, which has also been, for the first time, defined in the Rules.


Countervailing duty:

Rules relating to investigation and imposition of Countervailing duty as enshrined in Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules, 1995 have been amended to provide for investigation into case of circumvention of countervailing duty. Hence, Rule 25, similar to the one provided in the now revised Anti-dumping Duty Rules, has been inserted in the Countervailing Duty Rules. Further, new Rules 26 and 27, also inserted with effect from 2nd of February, provide for initiation of investigation to determine circumvention and determination of circumvention, respectively.

A new Rule 6A has been inserted to provide for consultations with the Government of the exporting country. Accordingly, as soon as an application under Rule 6 for the initiation of investigation is accepted, and in any event before the initiation of any investigation, the Government of the exporting country, the products of which may be subject to investigation, shall be invited for consultations to clarify the situation for the matters so as to arrive at a mutually agreed solution.

Further, the definition of “domestic industry” has been revised in line with that provided in the Rules relating to anti-dumping. “Like article” and “period of investigation” have also now been defined in the Countervailing duty Rules.

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