Introduction
In India, the trade remedial investigations are governed by the Customs Tariff Act, 1975 and the rules issued thereunder i.e. the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (‘Anti-Dumping Rules’) and Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules, 1995 (‘CVD Rules’).
The Directorate General of Trade Remedies (‘DGTR’), under the Ministry of Commerce (‘MoC’) is the investigative authority responsible for recommending Anti-dumping (‘AD’) and Countervailing (‘CV’) duties. Under Rule 18 of the Anti-Dumping Rules and Rule 20 of the CVD Rules, the final imposition of duties rests with the Ministry of Finance (‘MoF’). The MoF considers broader economic policy concerns while deciding whether to impose the duties. In many cases in last 3 years, the MoF has refrained from imposing the duties, despite positive recommendation of the DGTR arguably on the grounds of larger ‘public interest’. To recall, the AD or CV duties tend to increase the prices of the subject products in the domestic market thereby protecting the domestic industry from unfairly priced imports, however they also increase the costs of raw materials/inputs for the downstream industries. This essentially makes the AD/CVD investigations process a lis between the domestic industry on one hand and the consumer/user industries on the other hand.
It is pertinent to note there is absence of express statutory provisions under the India’s AD/CVD laws on how ‘public interest’ should be assessed by the DGTR and MoF which creates a legal uncertainty in this area. As India expands its network of free trade agreements and pursues both manufacturing growth and consumer welfare, the need for a structured public interest assessment becomes imperative.
In this regard, other jurisdictions offer valuable insights. The European Union has codified public interest criteria under Article 21 of their Basic Anti-Dumping Regulations, which mandates consideration of the interests of consumers and downstream users.[1] In Canada, the Canadian International Trade Tribunal can conduct a public interest inquiry if there is evidence that duties would negatively affect Canadian public interest.[2]
The legal status of the public interest consideration in India
Public interest in Indian trade remedy law occupies a substantively undefined space because there are no enabling provisions under the Customs Tariffs Act or the AD/CVD Rules for DGTR or MoF to consider this crucial aspect while recommending or deciding the imposition or non-imposition of duties. Importantly, there is no guidance on how the DGTR or MoF should balance the interests of domestic industry on one hand and the consumer/user industries on the other hand as part of the wider public interest analysis while deciding to recommend or levy/not levy the duties.
During an investigation, the DGTR under law is bound to invite all stakeholders including the users and consumers of the product concerned to submit public interest arguments. The DGTR is also bound to record their submissions and deal with them in its final findings as part of the natural justice principles. This creates a situation whereby although DGTR is obligated to take the arguments of users/consumers on record and deal with them but with no power to terminate an investigation in an appropriate case where public interest on users/consumers side is overwhelming.
Arguably, one of the ways in which the consumer/user interest is taken care is by applying the lesser duty rule (‘LDR’) in AD/CVD proceedings i.e. imposing duties which are lower of the dumping/subsidy margin and the injury margin. This codified principle under the Indian law ensures that duties are remedial, not punitive, and correspond only to the degree of injury actually suffered by the domestic industry. India’s adherence to the LDR in AD investigations flows from Rule 4(d)(i) of the Anti-Dumping Rules which corresponds to Article 9.1 of the WTO’s Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (‘Anti-Dumping Agreement’). This WTO rule effectively permits member countries to apply duties less than the full margin of dumping if such lesser duties are adequate to remove the injury to the domestic industry.[3] The rationale behind this approach is generally to avoid inflating costs for downstream industries and consumers while at the same time correcting the unfairly priced imports to the extent necessary to protect the domestic industry.
Interestingly, in June 2018, the DGTR had undertaken a stakeholder consultation for a proposed amendment to Rule 17(b) of the Anti-Dumping Rules which, if enacted, would have permitted DGTR to evaluate whether recommending AD measures would serve the public interest.[4] The law was not finally amended to implement this proposal.
Therefore, at present, the DGTR cannot choose not to recommend AD duties based only on user/consumer concerns. According to Rules 4 and 17 of the Anti-Dumping Rules, if the DGTR finds evidence of dumping, injury to domestic industry, and a causal connection between them, it must recommend duties—even if in a particular case these duties could substantially harm the consumer/user interests. Any such negative recommendations by DGTR against imposing duties only on consumer/user interests would exceed its legal authority under the Anti-Dumping Rules.
Practice of MOF to consider larger public interest while deciding to impose duties
The use of the word ‘may’ in Rule 18 of the Anti-dumping Rules gives discretionary powers to the MoF in deciding whether to impose or not impose AD duty. In several recent cases, the MoF has used this as an enabling provision to not impose duty considering the larger public interest. For instance, in the AD investigation on Ofloxacin from China PR, the DGTR recommended the imposition of AD duty in its final findings[5] because it found evidence of dumping causing injury to the domestic industry but the MoF declined to impose AD duty,[6] arguably because of larger concerns over healthcare affordability to users in India.
Similar outcomes have occurred in several AD investigations on various upstream and downstream products[7] of the textiles industry. Owing to large users/weavers representations before the MoF and Ministry of Textiles, the concerned ministry i.e. Ministry of Textile has many times recommended to the MoF to not impose duties on imports keeping in consideration the interests of small downstream weavers who are pitted against large companies producing fibres/yarns.
What is noticeable in these MoF decisions is the absence of any reasoning on application of public interest and the manner in which it was exercised.
The case for codification of public interest consideration in India
Public interest assessments inherently involve balancing the protection of domestic producers with broader concerns such as consumer welfare, downstream industry competitiveness, public health, and strategic economic goals. Codification could formalize these considerations into identifiable and measurable factors. Drawing from the practices of other jurisdictions across the world, the following criteria could be adopted:
* Impact on downstream industries and SMEs
* Consumer prices and availability of essential goods
* Employment effects in both protected and affected sectors
* National development goals and public health or energy security
Formalizing these criteria would not constrain discretion but structure it - ensuring that competing interests are weighed consistently and transparently.
Currently, the public interest analysis lacks an institutional process backed by legal provisions. In practice, there is no formal obligation for the MoF to invite or assess public interest submissions. Codification could establish some minimum thresholds or standards of economic data to support claims of parties advocating for and against the imposition of AD/CVD duties.
Comparative perspective
India’s public interest framework in trade remedy investigations remains discretionary to a large extent with the MoF’s decision making process. In contrast, other jurisdictions adopt varied approaches. These international models provide valuable lessons for India as it considers codification.
European Union: Structured balancing through the union interest test
The EU’s Union interest test, under Article 21 of Council Regulation (EU) 2016/1036, mandates a structured assessment of whether duties serve the broader interests of the EU economy. The Commission evaluates the likely impact of duties on consumers, importers, users, and competition before final imposition and can take a view to terminate a case on wider Union interest in an appropriate case.[8]
One such example is the termination of the AD and CVD proceedings concerning imports of farmed Atlantic salmon originating in Norway and the AD proceeding concerning imports of farmed Atlantic salmon originating in Chile and the Faeroe Islands. The EU considered factors like availability of the product at competitive prices, possibility of closure of downstream industries from imports of their finished products, inflation, employment and economic growth to determine that it is not in the community interest to apply such measures[9].
Canada: Discretionary but structured public interest review
Canada provides a hybrid model, where the Canadian International Trade Tribunal (CITT) can conduct a public interest inquiry under Section 45 of the Special Import Measures Act (SIMA) if there is evidence that duties would negatively affect Canadian public interest.[10]
Conclusion
As India’s trade remedy regime evolves, the increasing reliance on consumers/user interests under the larger public interest analyses as a basis for rejecting duty recommendations by the MoF without a structed enabling provision detailing the factors to be considered for public interest analyses has exposed significant legal gaps.[11]
International practice shows that public interest need not be a threat to effective trade protection. Jurisdictions like the European Union and Canada have demonstrated how structured discretion can strengthen, rather than weaken, the credibility of trade remedies framework. India can draw upon these models to build a context-specific, developmental framework.
[The authors are Partner and Senior Associate, respectively, in International Trade and WTO practice at Lakshmikumaran & Sridharan Attorneys, New Delhi]
[1] Article 21, Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (here)
[2] Section 45, Special Import Measures Act (here)
[3] Article 9.1 of Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (here)
[4] Page 3, Public Interest Requirement in Anti-Dumping Investigation (here)
[5] Final Findings [F. No. 6/12/2021-DGTR] dated 16 August 2022 (here)
[6] Office Memorandum F. No. CBIC-190354/288/2022-TO(TRU-I)-CBEC dated 15 November 2022 (here)
[7] Below are certain examples of cases relating to upstream and downstream products of textile industry:
Anti-dumping investigation concerning imports of ‘Caprolactam’ originating in or exported from European Union, Korea RP, Russia and Thailand (here)
Anti-dumping investigation concerning imports of ‘Viscose Rayon Filament Yarn (VFY)’ originating in or exported from China PR (here)
Sunset review of anti-dumping duties levied on imports of ‘High Tenacity Polyester Yarn’ originating in or exported from China PR (here)
[8] Article 21, Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (here)
[9] Council Regulation (EC) No 930/2003 dated 26 May 2003 (here)
[10] Section 45, Special Import Measures Act (here).
Appendix 4 of public interest inquiry guidelines provide factors that the tribunal may consider in a public interest inquiry. The factors include availability of alternative goods, effects of full duties on competition and consumers, impact on input-using producers, access to technology, consumer choice, and potential damage to domestic input producers. (here)
[11] Several cases questioning the powers of MoF and the basis for its decisions are pending before the Hon’ble Supreme Court of India and various High Courts.
