Anti-Dumping Duty is a tariff imposed by a government on imported goods that are priced lower than their fair market value, to protect domestic industries from unfair competition.
How It Works:
- A foreign company exports goods at a price lower than its domestic market price.
- The importing country investigates potential dumping.
- If dumping is confirmed, the government imposes an additional duty.
- The duty raises the import price to a fair level.
- Domestic manufacturers are protected from price undercutting.
Benefits:
- Protects local industries from unfair competition
- Prevents market distortion due to cheap imports
- Supports domestic employment and production
- Maintains fair trade practices
Example:
If steel is imported into India at significantly lower prices than domestic steel, the government may impose an anti-dumping duty to protect Indian steel manufacturers.