Diwan Advocates

International Trade and Anti-Dumping Laws

An Indian steel producer finds that imports from a third country are entering the market at prices that appear to be below the cost of production in the exporting country. Domestic producers are losing market share and margins. The producer wants to know whether anti-dumping duties can be imposed, how to initiate an investigation, and how long it will take. The answers come from the Customs Tariff Act, 1975, the DGTR's investigation procedures, and India's obligations under the WTO Anti-Dumping Agreement, all of which must be satisfied for a duty to survive legal challenge.

A foreign exporter receives notice that the Directorate General of Trade Remedies is investigating anti-dumping allegations against its product. It must respond to a detailed questionnaire, submit costing data that will be scrutinised by Indian investigators, and navigate a proceeding that could result in duties that make its product uncompetitive in one of the world's largest markets. It needs Indian counsel who understands both the law and the investigation process.

International trade law in India covers the full range of trade remedy measures, customs administration, export policy, free trade agreement compliance, and India's obligations as a WTO Member. At Diwan Advocates, we advise domestic industries, importers, exporters, and trading companies on all aspects of this framework.

Anti-Dumping: The Investigation Process

Anti-dumping measures are imposed under the Customs Tariff Act, 1975 and the Anti-Dumping Rules notified under it. The Directorate General of Trade Remedies conducts the investigation and recommends a duty to the Ministry of Finance, which imposes the final duty by notification. The process requires the DGTR to establish three things: that the goods are being exported at a price below their normal value in the country of origin (dumping), that the domestic industry is suffering material injury, and that there is a causal link between the dumping and the injury.

Initiating an Investigation

A domestic industry can file an application for initiation of an anti-dumping investigation with the DGTR. The application must contain evidence of dumping, evidence of injury, and a causal link. The application must be supported by producers accounting for at least 25 percent of the total domestic production of the like product. We prepare initiation applications for domestic industries and advise on the evidence required to meet the initiation standard.

The DGTR Investigation: Exporters' Obligations

Once an investigation is initiated, foreign exporters and their Indian importers receive questionnaires from the DGTR. The exporter's questionnaire requires detailed cost and pricing data for the product under investigation. The data submitted forms the basis of the DGTR's dumping margin calculation. Exporters that do not cooperate with the investigation, or whose data is found to be unreliable, are assigned the highest available dumping margin under the best information available principle. We advise foreign exporters on responding to DGTR questionnaires in a way that minimises their calculated dumping margin.

Injury and Causation

The domestic industry must demonstrate material injury: a significant decline in production, sales, market share, profits, or employment attributable to the dumped imports. We assist domestic industries in compiling and presenting the injury data and in making the causal link argument, and we challenge injury findings on behalf of exporters where the data does not support the DGTR's conclusions.

Countervailing Duties and Safeguard Measures

Countervailing Duties

Countervailing duty investigations examine whether the imported goods have benefited from subsidies provided by the exporting country's government that are specific to an industry or enterprise. The applicable legal framework is India's WTO-compliant CVD rules notified under the Customs Tariff Act, 1975. The DGTR investigates the existence and amount of the subsidy and recommends a countervailing duty equal to the amount of the subsidy attributable to the imported goods.

Safeguard Measures

A safeguard measure can be imposed when imports of a product are increasing in absolute or relative terms and are causing or threatening to cause serious injury to the domestic industry, regardless of whether the imports are dumped. Safeguard measures apply to all imports of the product from all countries and are subject to the WTO Agreement on Safeguards. They are time-limited and must be progressively liberalised during their term.

WTO and India's Trade Obligations

India is a founding Member of the World Trade Organisation and is subject to its multilateral trade agreements, including the Agreement on Anti-Dumping, the Agreement on Subsidies and Countervailing Measures, the Agreement on Safeguards, and the Agreement on Trade-Related Aspects of Intellectual Property Rights. India has been both complainant and respondent in WTO dispute settlement proceedings.

We advise the government of India and private sector interests on the WTO consistency of proposed trade measures, on India's rights and obligations in ongoing WTO disputes, and on compliance with adverse panel and Appellate Body rulings. We also advise foreign governments and companies on challenging Indian trade measures through WTO dispute settlement.

Export Controls and Sanctions Compliance

India's export control framework covers dual-use goods, defence and space technologies, chemicals, and nuclear materials. The Foreign Trade (Development and Regulation) Act, 1992 and the Foreign Trade Policy administered by the DGFT govern export licensing. Indian exporters of controlled goods must obtain an export licence from the DGFT before shipment. Violation of export control obligations attracts penalties under the Customs Act and the Foreign Trade Act, and can also trigger FEMA enforcement action.

Indian companies must also comply with any applicable foreign export control regimes, including US EAR and ITAR, where they are importing US-origin goods or technology for re-export. We advise on the intersection of Indian and foreign export control requirements and on compliance programmes for companies handling controlled goods and technologies.

Customs Valuation and Classification

Customs valuation disputes arise when customs authorities reject the declared transaction value and substitute a higher value for duty purposes. The Customs Valuation Rules, 2007 implement the WTO Customs Valuation Agreement and prescribe a sequential method for determining value. Related party transactions, royalties included in the price, and assists provided by the buyer to the seller are common sources of valuation disputes.

Classification disputes arise when the customs authority argues that a product falls under a higher-duty tariff heading than the importer declared. Classification turns on the product's characteristics, its intended use, and the Explanatory Notes to the Harmonised System. We appear in customs valuation and classification appeals before CESTAT and the High Courts.

Why Diwan Advocates for International Trade Law?

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International trade disputes move fast and involve data-intensive proceedings with strict timelines.

The quality of your Indian legal team determines your outcome.

Diwan Advocates delivers that quality.

Diwan Advocates  |  Delhi, India