Safeguarding Indian Small and Medium Scale Enterprises from Chinese goods

Trade defence measures are available to the domestic industry to counter unfair trade practices followed by exporters of goods from other countries. In case a product is imported into the country at less than its normal value, and it causes injury to the domestic industry, the domestic industry can make an application to Directorate General of Anti-Dumping and Allied duties (DGAD) in the Department of Commerce for imposition of anti-dumping duty. Similarly, an application for imposition of safeguard duty can be made by the domestic industry to the Directorate General of Safeguards under the Ministry of Finance, in case there is serious injury/market disruption, or threat of series injury/threat of market disruption to the domestic industry, as a consequence of increased imports of an article into India. During 2008-09 and 2009-10 (up to November 2009) anti-dumping duty was imposed in 22 cases (final duty in 12 cases and provisional duty in 10 cases) and final Safeguard duty was imposed in 4 cases.

Under Section 3 (2) of Foreign Trade (Development and Regulation) Act, 1992, the Central Government has an inherent power to impose restrictions on import of goods. The Customs Tariff Act, 1975 presently includes provisions for providing relief to the domestic producers against injury caused to them by imports, in accordance with the Agreement on Anti-Dumping (i.e. the Agreement on the implementation of Article VI of GATT, 1995), the Agreement on Subsidies and Countervailing Measures, and the Agreement on Safeguards. These provisions are aimed at offsetting the adverse effects of dumped imports, subsidized imports or increased imports.

Imports from China during the last 3 years is given in the table below:

Year Imports (Rs. crore)

2006-07 79,008

2007-08 109,116

2008-09 147,605