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India's MSME manufacturing base needs a predictable and responsive trade remedy environment as dumping risks capacity utilisation and impacts a fair competitve environment in the country, as per a research report by Center for Domestic Economic Policy Research (C-DEP).
MSMEs are particularly vulnerable to dumping from countries like China especially in an environment where trade remedies are unavailable. Effective remedial action can help bolster India's MSME ecosystem and help sustain manufacturing that is critical for generating employment and also boost exports. As per the report, MSMEs are more vulnerable to dumped imports than larger companies, which are generally better equipped to absorb price fluctuations through diversified operations and stronger financial resources. In contrast, MSMEs are more exposed to low-priced imports that undercut domestic production costs. The report flagged rising trade-circumvention practices, including product modifications, trans-shipment through third countries and other methods used to bypass anti-dumping duties. It noted documented cases in products such as PET resin and warned that "such practices risk diluting the intended impact of trade remedies by rerouting dumped goods into domestic markets in altered forms or through indirect channels." "Implementation of DGTR recommended Anti-dumping duties are essential for ensuring fair competition and a level playing field for the domestic industry in general and for the MSMEs. For MSMEs producers, it trade remedies impacts survival, employment and investment confidence. When dumping is established, implementation of recommended duties is critical to prevent large scale MSME shutdown," said C-DEP Research. The research further noted that "injury to MSMEs has broader implications for employment generation, cluster viability, supplier diversity and domestic industrial resilience." According to the research report, "India's MSME manufacturing base requires a predictable and responsive trade remedy environment. Implementation of DGTR-recommended anti-dumping duties, where dumping and injury have been established, will help restore fair competition, safeguard domestic investments and support India's broader objective of building a resilient manufacturing economy under Atmanirbhar Bharat." (ANI)
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