The Union Cabinet of India chaired by Prime Minister Modi, formally approved the MoU signed between the DG of Trade Remedies of India and Trade and Tariff Commission of Bangladesh. The Memorandum of Understanding was signed to increase the cooperation in the area of trade remedies. The agreement was signed on 27 March 2021.
- The Memorandum of Understanding aims to promote exchange of information, trade remedies and other activities in accordance with the provisions of WTO.
- The MoU mainly targeted on countervailing, anti-dumping and safeguard measures in bilateral trade between the countries.
They also known as CVDs are import tariffs. They are imposed to nullify the adverse effects of subsidies. CVDs are also called anti-subsidy duties.
Suppose a country finds out that a foreign country is subsidising its imports. This will cause harm to domestic suppliers. Thus, the home country can impose duties on such goods to protect its domestic suppliers. These duties are imposed only under World Trade Organisation rules.
Difference between countervailing duties and anti-dumping duties
Countervailing duties are imposed on subsidised products on exporting country. On the other side, anti-dumping duties are imposed on imports that are of low price.
Let us assume that China is exporting silicon wafer to India.
Case 1: Chinese Communist Party provides subsidy to silicon wafer manufacturers. Now when India imposes import duties, then it is called countervailing duties.
Case 2: No subsidies are provided to silicon wafer by Chinese Communist Party. But the exporter is selling at very low prices. In this case, when India imposes duty, it is called anti-dumping duties.
Union Cabinet approves India-Bangladesh Cooperation in Trade Union Cabinet approves India-Bangladesh Cooperation in Trade