Understanding Duties: CVD, Safeguard, or Anti-Dumping?

In foreign trade, duties like Countervailing Duty (CVD), Safeguard Duty, and Anti-Dumping Duty are used to protect domestic industries. The reason is as under: • CVD: Imposed to counter subsidies provided by exporting countries to their producers for providing level playing field to domestic indust...

In foreign trade, duties like Countervailing Duty (CVD), Safeguard Duty, and Anti-Dumping Duty are used to protect domestic industries. The reason is as under: • CVD: Imposed to counter subsidies provided by exporting countries to their producers for providing level playing field to domestic industry. For instance, India imposes CVD on subsidized imports for protecting the domestic industry. Safeguard Duty: Stopgap measures to protect domestic industry from unexpected bursts of imports creating serious injury. It's generally applied in the case of economic crises or disruption in trade. • Anti-Dumping Duty: Levied when foreign products are imported at below their normal price, harming local companies. India uses this duty quite generously to negate the predatory pricing tactics of foreign exporters. Every responsibility has a specific function in ensuring trade balance and the welfare of local economies against outside pressures. Source: Economic Times, Business Standard