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Anti-dumping, competitiveness and consumer welfare: a study on commodity prices with a special reference to India

Maiti, Dibyendu S. (2012) Anti-dumping, competitiveness and consumer welfare: a study on commodity prices with a special reference to India. South Asia Network of Economic Research Institutes, Dhaka.

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The usage of unconventional trade protections have been thriving worldwide and anti-dumping initiation is one of them. India has appeared the highest initiator of anti-dumping in the world during 1995-2010. The paper tries to investigate the impact of such initiatives on trade flows and resultant welfare with a particular reference to Indian economy. Anti-dumping initiative defends competition, protects domestic producers and goes against consumer welfare in general, but the strategic initiative may lead to rise in AD-jumping FDI flows, resulting to an improvement in domestic welfare. Theoretically, we find that the possibility of AD-jumping FDI depends on the foreign price and labour market conditions in the domestic economy. Closer to the oligopoly price in the domestic economy lower would be the possibility and greater would be a loss of domestic welfare. Moreover, in the presence of unions, such possibility goes down. The study uses industry and firm level information empirically to see the impact. It is observed that the AD initiation does not affect the imports significantly. FDI has grown but still very small. The mark-up of AD intensive industries seems to be on the higher side and does not support the AD-jumping FDI proposition effectively. A large share of Indian initiatives, similar to other countries, has been against China and other neighboring countries, leading to rise an issue of predatory pricing including the rules of origin applicable largely with them. We suggest that AD investigation process should look at (i) the price formation and rules of origin in the foreign markets, (ii) the extent of extra-legal employment and environmental damage due to the increased import competition. Although Indian government has been quite active in taking decision on any petition against dumping, the existing laws favour only a small section of producers, do not apply uniform methods of injury calculation and do not show any concern about labour and environment. We suggest that the safeguard measure should be taken up first before using anti-dumping measure in cased of dumping.

Item Type: Other
Subjects: H Social Sciences > HF Commerce
Divisions: Faculty of Business and Economics (FBE) > School of Economics
Depositing User: Ms Shalni Sanjana
Date Deposited: 02 Apr 2013 01:10
Last Modified: 02 Apr 2013 01:10

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