Trade Effects of Anti-dumping in India: Who Benefits?

Abstract

This article assesses the trade effects of anti-dumping (AD) duties levied on 177 (8-digit) products by India during the period 1994 to June 2001. A panel regression has been applied to quantify the effects of AD actions on import volumes, values, and prices. It finds that the investigation effects of AD actions are not substantial. The imposition of AD duties restrains trade (both volume and value) and raises import prices. While trade effects start dissipating in subsequent years, import prices from both named and unnamed countries rise significantly in the post-duty years. There is little evidence that trade is diverted from unnamed to named countries. Thus, the domestic industry is benefited due to the price rise. Their financial position improves at the expense of both consumers and downstream industries. Since anti-dumping is an expensive form of protection, only large and dominant producers in concentrated industries emerge as the major beneficiaries of this protection. Finally, the developing trade partner countries suffer significant import losses when named. However, the trade destruction effect is insignificant for developed countries. Even though the unit value of their imports rises, there is no evidence of decline in trade from these countries.

How antidumping measures affect US imports from China: A mesoeconomic perspective of the excess price changes

“…Sandkamp (2020) indicates that trade destruction effects may be larger than previously thought for the European Union (EU). Other studies have found qualitatively similar results for developed countries (Baran, 2015; Staiger & Wolak, 1994) and developing countries (Aggarwal, 2010; Lee et al, 2013; Park, 2009). Apart from at the national level, several existing studies document AD measures’ effects on the number of exporters and exporters’ profits, productivity, market value and export volume at the firm level (Chandra & Long, 2013; Lu et al, 2018; Schiavo et al, 2021).…”

Destruction and Deflection: Evidence from American Antidumping Actions against China

“…Park (2009) investigated the impacts of China's antidumping activities on trade and trade patterns, with significant trade depressing and trade diversion effects found. Aggarwal (2010) studied trade effects of antidumping duties levied by India over the 1994-2001 period based on difference generalized method of moments (DIF-GMM) method. Empirical results showed evidence of both restrained trade (both volume and value) and raised import prices.…”

Trade Destruction and Trade Diversion of Indian Anti-dumping Duties Against Bangladesh

“…Carter and Gunning-Trant (2010) found neither investigation nor trade diversion effects in association with US agricultural AD measures, while Wang and Reed (2015) revealed that US AD duties instigated trade deflection of shrimp products to non-named third markets. Aggarwal (2010) showed that only the big firms benefited from protective AD measures of India. The study also revealed that developing countries suffer significant losses from Indian AD measures, while there is no evidence of trade destruction effects for developed countries.…”