Correct option is B
The correct answer is (b) Sale in a foreign market of a commodity at a price below marginal cost
Dumping refers to the practice where a country or company exports goods to another country at a price lower than the production cost or the price in its domestic market.
Key Features of Dumping:
Unfair Trade Practice:
- Dumping is considered an unfair practice as it disrupts fair competition in the target market.
- It can harm domestic industries in the importing country by undercutting their prices.
WTO Regulations:
- The World Trade Organization (WTO) permits countries affected by dumping to impose anti-dumping duties to safeguard domestic industries.
Motives for Dumping:
- To dispose of surplus production that cannot be sold domestically.
- To establish dominance in a new market by weakening local competitors.
Additional Information:
India’s Anti-Dumping Measures:
Governing Law:
- The Customs Tariff Act, 1975, and the Customs Tariff (Identification, Assessment, and Collection of Anti-Dumping Duty) Rules, 1995 provide the legal framework for imposing anti-dumping measures.
Authority:
- The Directorate General of Trade Remedies (DGTR) under the Ministry of Commerce investigates cases of dumping and recommends anti-dumping duties.
- The Ministry of Finance implements these duties.
Purpose of Anti-Dumping Duties:
- To protect domestic industries from unfair price competition.
- To create a level playing field for domestic producers in the face of cheap imports.
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