Fisheries Economics

7.5.5. Injury to Domestic Industry

Only when the domestic producers could establish “material injury” suffered by them due to dumping a case of anti – dumping could be pursued.

The material injury caused is analysed on two basis:

1) Volume effect

2) Price effect 

 

Volume effect

The extent of volume of the good or article dumped at a certain period of time along with likely future imports either in absolute terms or in relation to production or consumption in India and to what extent it could adversely affect domestic industry are considered as volume effect.

Price effect

The dumping of an imported good will certainly affect price of the same or like good produced and sold by the domestic market. Also, there will be price-undercutting in domestic sales for both goods. As a result, the likely impact of imported goods in economic and financial terms on the domestic producer is reflected on the following aspects:

* Decline in output

* Loss of sales

* Loss of market share

* reduced profits

* Decline in productivity

* Decline in capacity utilization

* Reduced return on investments

* Price effects

* Adverse effects on cash flow, inventories, employment, wages, growth, investments, ability to raise capital etc.

Casual Link

A valid case of anti- dumping arises only when there is a casual link between the material injury suffered by the domestic producer due to dumping of imported similar or like products. Besides demonstration of casual link, other factors such as volume and price of other imports, demand contraction, productivity and technology need to be considered to initiate anti – dumping proceedings.