The Ministry of Finance has introduced the provisions relating to ‘anti-absorption’ in the trade remedy measures being enforced by India. Amendments in this regard have been made in the Customs Tariff (Identification, Assessment and Collection of Antidumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (‘Anti-dumping Rules’) and the Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules, 1995 (‘CVD Rules’).
The new Rules, effective from 27 October 2021, provide for anti-absorption review, initiation of investigation to determine absorption and determination of absorption for both countervailing duty (‘CVD’) and anti-dumping duty (‘ADD’). Some salient features of the new provisions are highlighted below.
- An ADD/CVD will be considered to be absorbed when export prices of an article from the exporting countries decrease post imposition of the ADD/CVD without any commensurate/significant change in resale price of such article in India imported from the exporting countries.
- In case of ADD, absence of any commensurate change in cost of production of such article or export prices of such article to countries other than India, would also be considered.
- Review to be limited only to re-computation of dumping margin/subsidy and injury margin.
- The designated authority may, after conducting review, recommend modification in the form or basis of the ADD/CVD, or the quantum of such duties, or both, after reassessing the dumping margin or subsidy margin and injury margin.
- Appropriate changes or adjustments in previously determined benefit from subsidy or normal value and injury, if necessary, may be done.
- Time period: Domestic industry to file applications for anti-absorption reviews normally within 2 years. Investigations to be normally completed within 6 months.
- The DA may recommend modification of form or basis of ADD/CVD or their quantum or both, retrospectively from the date of initiation of the anti-absorption investigation.
- Provisions regarding evidence and procedures under Rule 6 of the Anti-dumping Rules or Rule 7 of the CVD Rules, shall apply mutatis mutandis to these investigations.