Why in news?

The Indian government has decided not to extend the anti-dumping duty imposed on ammonium nitrate imported from Russia, Iran and Georgia.

background:

• The commerce ministry’s investigation arm DGTR had conducted a probe to review the need for the continuing imposition of anti-dumping duty on the product imported from these countries, following a complaint from the domestic industry.

About ammonium nitrate

• The product is used in manufacturing slurry-based and emulsion-based explosives, which are in turn used for mining and infrastructure purposes. It is also used as a fertiliser in many countries.
• However, in India, it is not included under the definition of fertilisers under the Fertiliser Control Order, 1985.
• The current duty on the product would expire on September 11.

What is anti-dumping duty?

• An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.
• In order to protect their respective economy, many countries impose duties on products they believe are being dumped in their national market; this is done with the rationale that these products have the potential to undercut local businesses and the local economy.
• While the intention of anti-dumping duties is to save domestic jobs, these tariffs can also lead to higher prices for domestic consumers.
• In the long-term, anti-dumping duties can reduce the international competition of domestic companies producing similar goods.
• The duty is aimed at ensuring fair trade practices and creating a level-playing field for domestic producers with regard to foreign producers and exporters.

Who decides the tariff?

• While DGTR recommends the duty, the finance ministry takes the final decision to impose the same.