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How govt plans to tighten the screws on imports

By Subhayan Chakraborty
February 03, 2020 21:51 IST
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A string of measures includes specific provisions in rules governing anti-dumping, safeguards, and basic Customs duties.

Import

Illustration: Uttam Ghosh/Rediff.com

Apart from raising import duties on hundreds of goods, the government has also added tougher provisions to all Customs rules in order to tighten the screws on imports further.

A string of measures includes specific provisions in rules governing anti-dumping, safeguards, and basic Customs duties.

 

A case in point, when importing from countries which have already been slapped with anti-dumping duties: an importer may fall foul of the rules if the imported product in an unassembled form is less than 35 per cent of the value addition, compared to its manufacturing cost.

The latest rules also stipulate that for calculation of value addition, expenses on account of procurement of technology, such as patent, copyright, trademark, royalty, technical know-how, etc, shall not be included in the value of the parts brought in.

Anti-dumping duties are officially classified as protectionist tariffs that governments impose on foreign imports they believe are priced below the fair market value, and undercutting local products.

On the other hand, when importers bring in an item already subject to anti-dumping duties from a nation which hasn’t been slapped with such duties, they run the risk of violating the law.

According to the latest diktat, they ‘can’t change their trade practice, pattern of trade or channels of sales of the article’ suddenly. However, traders said this will leave them open to unfair prosecution by Customs officials at the ground level.

The government has also said that in cases where imports of a product from more than one country are being simultaneously subject to anti-dumping investigation, the government will cumulatively assess the effect of such imports in certain cases.

However, this will start only when it determines that the margin of dumping established in relation to the imports from each country is more than 2 per cent of the export price.

Alongside this, the volume of imports from each country should be at 3 per cent of imports of the item under question.

The impact assessment will also start where the export of individual countries is less than 3 per cent.

Interestingly, imports have reduced a cumulative 8.9 per cent in the April-December period of 2019-20, so far.

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Subhayan Chakraborty in New Delhi
Source: source
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