Manufacturers ‘game the system’ at the cost of consumers, commerce secy Wadhawan writes to Cabinet secy Sinha
While it has been said sotto voce that India’s quasi-judicial system for trade remedies has almost always benefited the capital-intensive, large primary manufacturers at the cost of the industrial users of their products and the end-consumers of value-added items, this has never been officially acknowledged. Well, not any longer. Commerce secretary Anup Wadhawan himself has sought to bring the system’s apparent tilt towards the biggies into focus.
Wadhawan, who by virtue of his office, is at the helm of the trade remedies apparatus that consists of the anti-dumping and safeguard-duty wings, wrote in a recent letter to Cabinet secretary Pradeep Kumar Sinha: “There is often (a) need to address the tendency (among) domestic manufacturers to game the system at the cost of the numerous downstream users and consumers, which can undermine the competitiveness of the economy.”
Wadhawan’s letter to Sinha was primarily meant to dispel the perceptions that the processes of the trade remedies apparatus in the country are unduly time-consuming and its approach conservative, and to apprise him of the steps taken by the Directorate General of Trade Remedies (DGTR) towards making processes more efficient and accountable.
Even as the commerce secretary quoted figures to show how the average time taken for completion of investigations has come down over the recent years and how the backlog is being cleared, he also stated that “it is pertinent that all these matters are highly contested by the opposing interests comprising domestic manufacturers and domestic users, whose interests need to be balanced in the overall interest of the domestic economy on the basis of the rules and procedures and data relevant to the particular case”.
DGTR was set up in May 2018 by merging the erstwhile Directorate General of Safeguards and the Directorate General of Anti-Dumping and Allied Duties. The safeguard directorate’s chief function is to protect the domestic industry from a sudden surge in competitive imports. The anti-dumping authority is primarily concerned about avoiding an ‘injury’ to the domestic industrial segments from low-priced (below-cos) imports via a extra tariff barrier. An anti-dumping is being notified after a detailed investigation into the complaints of dumping-related problems lodged by the domestic industries concerned.
While scores of industries have benefited from anti-dumping actions, the user industries have apparently suffered and often raised their voices against such imposts. The synthetic textile industry consisting of producers of PTA, PSF, PFY, acrylic fibre etc have seen dumping duties for the benefit of domestic producers for long periods, while the primary steel manufacturers have in recent years, have gained from trade remedial measures such as minimum import prices as well as anti-dumping and safeguard duties (see table).