Anti-dumping duty is imposed when:
Options
AExport price is lower than domestic price
BExport price is higher than domestic price
CImport price is higher
DPrices are equal
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International TradePYQ - Nov 2019 (Inter)Question 164 of 20
All Questions Correct Answer
✅ Option a — Export price is lower than domestic price
All Options:
- AExport price is lower than domestic price
- BExport price is higher than domestic price
- CImport price is higher
- DPrices are equal
Detailed Solution & Explanation
To understand when anti-dumping duty is imposed, let's break it down:
• Anti-dumping duty is a protectionist tariff that a country imposes on imported goods which it believes are being dumped in its market.
• Dumping occurs when a foreign company exports goods to another country at a price that is lower than the price it charges in its home market.
• The main reason for imposing anti-dumping duty is to protect domestic industries from unfair competition caused by cheap imports.
• According to the World Trade Organization (WTO) rules, a country can impose anti-dumping duties if it determines that dumping is taking place and causing injury to a domestic industry.
The correct answer is based on the principle that anti-dumping duty is imposed when the export price of a product is lower than its domestic price, indicating dumping.
Options like export price being higher than domestic price are incorrect because they do not indicate dumping, and thus, there would be no need for anti-dumping duty.
About This Chapter: International Trade
Paper
Paper 4: Business Economics
Weightage
10%
Key Topics
Theories, Trade Policy, Exchange Rates
This chapter explores trade between nations — why countries trade, the theories of Absolute and Comparative Advantage, Balance of Payments, Exchange Rate systems (Fixed vs Flexible), and India's trade policy including tariffs, quotas, and WTO rules.
View Official ICAI SyllabusExam Strategy Tip
Understand Comparative Advantage theory thoroughly — it's the foundation of international trade. Also focus on the Balance of Payments structure and what causes deficits.
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