Lok Sabha Question No. 2041 (UNSTARRED), answered on 2016-11-28
Subject: Cheap imports
Ministry: COMMERCE AND INDUSTRY
Asked by: RAMA CHANDRA HANSDAH, M. B. RAJESH

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 2041 TO BE ANSWERED ON 28 th  NOVEMBER, 2016

## CHEAP IMPORTS

## 2041. SHRI RAMA CHANDRA HANSDAH: SHRI M.B. RAJESH:

Will the Minister of COMMERCE & INDUSTRY ( वाͨणÏय एवं उɮयोग मंğी ) be pleased to state:

- (a) whether there is a surge in cheap imports in the country which is affecting the domestic products and if so, the details thereof and the reasons therefor;
- (b) whether the tariff  concessions  offered  under  the  Free  Trade  Agreements  is  the  leading cause of the surge in imports from other countries;
- (c) if so, the details thereof along with the measures taken or being taken by the Government to safeguard the domestic products;
- (d) the rules/regulations/principles being followed for levying anti-dumping duties along with the  details  of  products  on  which  it  is  being  levied  by  the  Directorate  General  of  AntiDumping and Allied Duties, country-wise including the rates of such duties and the total collection in the financial year 2015-16; and
- (e) whether  the  dumping  of  finished  rubber  products  is  being  witnessed  in  the  country thereby causing distress and misery among rubber growers and if so, the details thereof along with the corrective measures taken by the Government in this regard?

## ANSWER

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## THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (INDEPENDENT CHARGE) (SMT. NIRMALA SITHARAMAN)

- (a) Import of an item takes place only when similar item is either not available in the domestic market or is available at a cheaper rate outside the country than the one available in the domestic market. Excess capacity overseas and downward pressure on international prices in  light  of  the  global  slowdown  has  led  to  enhanced  competitive  pressure  on  domestic producers from foreign suppliers in some sectors.
- (b) &  (c)  The  trade  data  with  Free  Trade  Agreement  (FTA)  partners,  prior  to  and  after implementation of the agreement indicates that there has been a significant increase in our trade.    Moreover,  studies also  indicate  that  increase  in  share  of  import  of  raw  materials, intermediate  goods  and  capital  goods  could  lead  to  enhanced  efficiency  in  domestic production and thus contribute to greater exports. The overall effect on trade of an FTA is positive and statistically significant.

Further, to protect the interest of the domestic industry, these agreements provide for maintaining sensitive/negative lists of items on which limited or no tariff concessions are granted under the FTA.  In addition, in case of a surge in imports and injury to the domestic industry, a country is allowed to take recourse to the measures such as safeguards and antidumping measures.

(d)  The  Directorate  General  of  Anti-Dumping  &  Allied  Duties  (DGAD)  is  responsible  for conducting anti - dumping investigations and recommending imposition of suitable remedial measures  to  the  Central  Government  with  a  view  to  provide  a  level  playing  field  to  the domestic industry. The DGAD conducts anti - dumping(AD) investigations on the basis of a duly substantiated petition filed by the domestic industry alleging dumping of goods into the country causing injury to the domestic industry and brings out final findings recommending AD duties, if any. There after, Department of Revenue notifies the rate of AD duty. All the final  findings  of  DGAD  and  duty  notifications  are  all  available  on  their    websites  : www.dgtr.gov.in and www.cbec.gov.in.

(e) Though there have been complaints of cheap import of rubber products into the country including tyres. Sizeable dumping of natural rubber at cheaper rates has not been noticed. The Government has however taken the following steps to regulate the import of natural rubber in 2015 and 2016:

- i. Reduction  in  export  obligation  period:    Under  Advance    Authorisaion  Scheme, natural rubber import was subject to pre-import condition and export obligation was reduced to only six months (from the date of import clearance) to avoid any misuse of diversion to domestic market.
- ii. Suspension of import under Advance Authorisation: Import of Natural Rubber was under  suspension  during  the  period  from  21 st January,  2016  to  31 st March,  2016 under Advance Authorisations issued or revalidated on or after 21 st January, 2016.
- iii. Enhancement of basic import duty:- Import duty on dry forms of natural rubber was raised  from  '20%  or  Rs  30  per  kg  whichever  is  lower'  to  '25%  or  Rs  30  a  kg whichever is lower' with effect from 30 April 2015.

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