Anti Dumping Duties (ADD) and Make in India: A Comparative Policy Analysis with Relevant Customs Law

Introduction

India’s industrial and trade governance is shaped by two influential instruments—Anti-Dumping Duties (ADD), a statutory trade-remedy mechanism, and Make in India, a national industrial strategy. While ADD protects domestic industry from unfair foreign pricing, Make in India seeks to strengthen domestic manufacturing capacity. Comparing the two requires understanding both policy intent and statutory underpinnings, particularly within Customs Tariff Act, 1975 and Customs Act, 1962.

1. Statutory Foundations Under Indian Customs Law

1.1 Customs Tariff Act, 1975 (CTA) — ADD-specific legal framework

(a) Section 9A – Anti-Dumping Duty on Dumped Articles
Provides legal authority to impose ADD when goods are exported to India at less than normal value, causing injury to domestic industry. It defines margin of dumping, normal value, export price, and allows for provisional and final duties.

(b) Section 9B – Exceptions & Rule-Making Powers
Allows exemptions (e.g., de-minimis margins) and empowers the Central Government to frame Anti-Dumping Rules.

(c) Section 9C – Appeal Mechanism
Enables appeals before CESTAT against ADD notifications issued by the Ministry of Finance.

(d) Sections 9A(1B) & 9(1B) – Anti-Absorption Provisions (Inserted via Finance Act 2021)
Provide statutory basis to counter exporters lowering their India-specific prices to neutralise ADD impacts.

1.2 Customs Tariff (Identification, Assessment and Collection of ADD) Rules, 1995

These Rules form the procedural backbone of ADD investigations:

• Rule 5 – Initiation of investigation
• Rule 6 – Principles of investigation
• Rule 7 – Confidentiality
• Rule 16– Disclosure of essential facts
• Rules 12 & 17 – Provisional and final findings
• Rule 23 – Mid-term and sunset reviews
• Rules 29–31 – Anti-absorption reviews (inserted 2021)

2. Enforcement Framework Under _{Customs Act, 1962}

2.1 Section 12 – Levy of Customs Duties (Includes ADD)

ADD is collected as a component of “duties of customs” at the point of import.

2.2 Section 28 – Recovery of Short-Levy or Non-Levy

Allows authorities to recover ADD where it has been short-collected or evaded.

2.3 Section 111 – Confiscation of Improperly Imported Goods

Relevant when mis-declaration affects ADD liability—upheld in Commissioner of Customs, Pune v. Ballarpur Industries (2021).

2.4 Section 114A – Penalties for Wilful Mis-Declaration

Applies alongside confiscation where importers intentionally evade ADD.

3. Conceptual Comparison: ADD vs. Make in India

3.1 Nature and Purpose

ADD corrects market distortion, whereas Make in India builds industrial capability.

4. Operational Mechanisms

4.1 ADD Mechanism

ADD follows a strict legal process:

• Petition by domestic industry
• DGTR investigation per 1995 Rules
• Injury, dumping & causation tests
• Provisional duty - final duty
• Enforcement through Customs Act (Sections 12, 28, 111, 114A)

4.2 Make in India Mechanism

Operationalised through:

• FDI policy reforms
• Production Linked Incentive (PLI) schemes
• Logistics & infrastructure upgrades
• Ease of doing business improvements

5. Economic Impacts

5.1 ADD: Short-Term Protective Impact

Pros

• Neutralises predatory pricing
• Stabilises domestic producers
• Supports sectors facing global over-capacity

Cons

• Raises input costs for MSMEs
• Can distort value chains if product scope is broad
• Requires disciplined reviews (as stressed in Kumho Petrochemicals, 2017)

5.2 Make in India: Long-Term Capacity Impact

Pros

• FDI inflows reached USD 81.04 bn in FY25, boosting manufacturing attractiveness
• Development of domestic supply chains
• Improved logistics efficiency

Cons

• Dependence on imported intermediates persists
• Uneven state-level implementation

6. Synergies and Conflicts

6.1 Synergies

• ADD provides shielding for industries in the early growth phase under Make in India.
• Complements PLI by preventing dumped imports from derailing domestic investment.
• Anti-absorption tools ensure ADD isn’t neutralized by exporter price manipulation.

6.2 Conflicts

• ADD on essential raw materials can undermine domestic competitiveness and export readiness.
• Overly broad classifications or extended duties may protect inefficiencies, contrary to Make in India’s goal of globally competitive manufacturing.
• Timing lapses (violating Kumho principles) create uncertainty harmful to industrial planning.

7. Harmonising ADD with Make in India

7.1 Precision in ADD Application

Use end-use exclusions and lesser-duty rule to avoid burdening downstream sectors (Rules 10, 17).

7.2 Strict Sunset Review Discipline

Initiate reviews before expiry to avoid unintentional lapse (per Kumho).

7.3 Strengthening Transparency

Ensure clear disclosure (Rule 16) and avoid excessive confidentiality (Rule 7) to reduce litigation.

7.4 Integrate ADD into Industrial Strategy

Use ADD as a transitional tool—support during infancy but phase down as sectors achieve competitiveness.

Conclusion

ADD and Make in India serve complementary but distinct roles. ADD is a legal remedy rooted in Customs law—CTA Sections 9A–9C, Rules 5–31, and Customs Act Sections 12, 28, 111, 114A—to defend against unfair imports. Make in India is a strategic industrial agenda aimed at global competitiveness.

When ADD is precisely scoped, transparently administered, and timed with discipline, it supports Make in India by stabilizing the domestic market. When misapplied, it risks raising costs and stifling innovation. A calibrated, law-consistent approach ensures that trade remedies protect, while industrial policy builds India’s manufacturing future.