India moves WTO on anti-dumping duty

India has formally informed the World Trade Organisation (WTO])that the continuous anti-dumping duty imposed by the US Department of Commerce (DoC) had severely affected the country's shrimp exports to the US during the last two years.

In a 3000-page evidence report, filed recently, the government has stated that the imposition of duties and stringent bond requirements had resulted in a huge fall in exports to the US, with the number of exporters dropping from 228 in 2004 to 81 currently.

Since these have affected business volumes and export earnings, India has argued that they should be treated as trade barriers impairing better trade relations with the US.

During the 2006-07 April-December period, the quantity of exports had dropped by 23.43 per cent, resulting in 14.32 per cent loss in export earnings.

In the same period, export revenue to the US dropped to Rs 768 crore from Rs 896.17 crore for the corresponding period in the previous year. Export of frozen shrimp, the largest item shipped to USA, had registered a drop of 5.86 per cent at 68,869 tonne.

Interestingly, the European Union (EU) had emerged as the largest market for Indian marine products during the last 2-3 years with a 28.72 per cent surge in exports. India's export earnings from Europe has increased to Rs 1,236 crore, a clear indicator of the huge loss suffered due to the imposition of anti-dumping duties and bonding requirements.

After implementing the anti-dumping duty in February 2004, Indian exporters had to execute bonds equivalent to 10.17 per cent of the total annual exports during the previous fiscal. Due to this stringent requirement, a good chunk of exporters had to stop exports to the US.

Exporters have contended that the bonding requirements were not compatible with WTO norms, and had been unilaterally imposed by the American administration. The bonding expense is 4 per cent of the total FOB value of consignments, which in effect had closed the US market to Indian exporters.

Following a complaint lodged by India and other nations in June 2006, the dispute settlement body of the WTO had formed a panel to submit its findings over the issue.

But the preliminary findings of the panel were favourable for the US, and hence India had filed the detailed evidence recently. Apart from the Union government, the stake holders of the export industry are also hopeful of a favourable ruling over the customs bond issue.

Meanwhile, around 150 exporters will file review applications for the second administrative review in the anti-dumping case. The DoC had listed 313 companies from India for review recently.