In trading economics, the word "Dumping" s used. Can you explain what is it about ?

Dumping is a trade “trick” used in export.

Dumping means selling a product at lower price than the market price or even below the cost of production.

There are 3 types of dumping. The objective of dumping is to enter a foreign market, to sell the excess production at home and  to  develop trade relations in a foreign country.

A) Intermittent dumping : The company produces a product more than the demand in the home country. The stocks are piled up. This non moving stocks are sold in foreign countries at very low price, without reducing the  price in the home country. But dumped at intervals.
B) Persistent dumping : This is done in a monopoly product (A few suppliers. Large buyers). The product is sold at lower price in foreign countries regularly, without lowering the prices in home country.
C) Predatory dumping : This is done in a monopoly product (A few suppliers. Large buyers). The product is sold at lower price in foreign countries to drive away the local producers and other competitors in that country.
D) Example : Japanese products are expensive in Japan. But the same are available at a cheaper price in Hongkong and many parts of the world.

What are the effects of dumping on the exporting and importing countries

Dumping affects both the exporting and importing countries.
a) Exporting country : Buyers at home country pay a higher price and the buyers at a foreign country pay less price for the same product.  Finds large  customers for the excess products. Earns foreign exchange and reduces the balance of payment of the country.
b) Importing country : Local business reduces due to unfair price competition. Dumping for a longer period threatens and closes the local industry. Changes the customer preferences for the dumped product.  If the dumping is stopped, local need arises to import these products at higher prices to meet the customer needs. Increases the balance of payment.
C) Example : Mobiles with many advanced features from China and Taiwan are dumped into India at a very low price. People in India become more loyal to these cheap mobile. It affects the sales of  mobiles made locally and imported from other parts of the world (even though these are of high quality and durable than the dumped product, but the price is more)

What are the anti dumping measures ?

a) Duty and Tariff :  Increase in Import duties and tariffs on import will discourage dumping.
b) Import quota : If a  quota is fixed for the products imported, it reduces large scale dumping.
c) Ban on import : Dumping countries and the goods can be identified. Ban of import from those countries can be initiated.
d) Bilateral discussion : The importing country can start a discussion with a dumping country to stop the dumping  or import another product from them, so that both are mutually benefitted.  


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Basically a B.Sc (Physics) from the University of Madras, India. Started the career in production engineering under German and Italian experts. MBA in Management from IIM, Ahmedabad (India). Ph.D (Management) from the University of Bomaby (the first ever awarded in this subject). Headed the computer centres of Multi nationals; "Data Processing expert" of the Commonwealth, London (To implement World Bank and UNDP Computer softwares); "Consultant Adviser" to the Caribbean Development Bank (CDB), Barbados. Associated with Nobel Laureate in Economic Science-1979, Arthur Lewis (Past President of CDB) & 4 more on his introduction. Visiting professor to many universities. A Trained ISO 9001:2000 Quality Auditor. Over 40 years of combined experience in Accounts, Computer Software, Economics, Engineering, Management, Science, Technology, Research & Development and Qulaity systems. Author of over 60 Application Research papers. Currently a free-lance consultant in ISO Quality Systems, Socio-Economic development acceleration, Innovative software designs. Can answer any question in Theoritical/Applied-economics with an in-depth and innovative dimension. I DO NOT ANSWER : 1. STATISTICAL data & analysis. 2. PRIVATE questions, as they do not appear for PUBLIC view & search 3. Examination & Project report oriented questions. Website


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