{"id":3106,"date":"2023-02-15T04:19:25","date_gmt":"2023-02-14T22:49:25","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=3106"},"modified":"2025-03-26T10:20:42","modified_gmt":"2025-03-26T04:50:42","slug":"what-is-countervailing-duty-cvd","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/what-is-countervailing-duty-cvd\/","title":{"rendered":"What is Countervailing Duty (CVD)?"},"content":{"rendered":"<h2><strong>About Countervailing duty (CVD):<\/strong><\/h2>\n<ul>\n<li>It is a <strong>specific form of duty<\/strong> that the government imposes <strong>to protect domestic producers by countering the negative impact of import subsidies.<\/strong><\/li>\n<li>CVD is thus an <strong>import tax by the importing country on imported products.<\/strong><\/li>\n<li><strong>Why is CVD imposed?<\/strong>\n<ul>\n<li><strong>Foreign governments sometimes provide subsidies to their producers<\/strong> to make their products cheaper and boost their demand in other countries.<\/li>\n<li><strong>To avoid flooding the market in the importing country<\/strong> with these goods, the <strong>government of the importing country imposes CVD<\/strong>, charging a specific amount on the import of such goods.<\/li>\n<li><strong>The duty nullifies and eliminates the price advantage enjoyed by an imported product<\/strong>.<\/li>\n<li>The <strong>duty raises the price of the imported product<\/strong>, bringing it closer to its true market price<\/li>\n<\/ul>\n<\/li>\n<li>The World Trade Organization <strong>(WTO) permits the imposition of CVD<\/strong> by its member countries.<\/li>\n<li><strong>Who administers CVD in India?<\/strong>\n<ul>\n<li>The countervailing measures in India are administered by the <strong>Directorate General of Anti-dumping and Allied Duties (DGAD), in the commerce and industry ministry\u2019s<\/strong> department of commerce.\u00a0<\/li>\n<li>While the <strong>department of commerce recommends the CVD<\/strong>, the <strong>department of revenue in the finance ministry acts upon the recommendation<\/strong> within three months and imposes such duties.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3>What is Anti-dumping duty (AD)?<\/h3>\n<ul>\n<li>It is a <strong>protectionist tariff<\/strong> that a domestic g<strong>overnment imposes on foreign imports that it believes are priced below fair market value.<\/strong><\/li>\n<li>Dumping is a process wherein a company exports a product at a price that is significantly lower than the price it normally charges in its home (or its domestic) market.<\/li>\n<\/ul>\n<h3>Countervailing duty v\/s Anti-dumping duty<\/h3>\n<ul>\n<li><strong>AD is imposed to prevent low-priced foreign goods from damaging the local market<\/strong>. On the other hand, <strong>CVD will apply to foreign products that have enjoyed government subsidies<\/strong>, which eventually leads to very low prices.<\/li>\n<li>While the <strong>AD duty amount depends on the margin of dumping<\/strong>, the <strong>CVD<\/strong> amount will <strong>completely depend upon the subsidy value<\/strong> of the foreign goods.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<hr \/>\n<h3>Q1: What are the different types of trade barriers?<\/h3>\n<p>There are four types of trade barriers that can be implemented by countries. They are Voluntary Export Restraints, Regulatory Barriers, Anti-Dumping Duties, and Subsidies.<\/p>\n<p><strong>Source:<\/strong>\u00a0<a href=\"https:\/\/www.bqprime.com\/business\/dgtr-bats-for-countervailing-duty-on-saturated-fatty-alcohol-imports-from-three-nations\" target=\"_blank\" rel=\"nofollow noopener\"><u>DGTR Bats For Countervailing Duty On Saturated Fatty Alcohol Imports From Three Nations<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>CVD is imposed to protect domestic producers by countering the negative impact of import subsidies.<\/p>\n","protected":false},"author":5,"featured_media":3107,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-3106","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/3106","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=3106"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/3106\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/3107"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=3106"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=3106"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=3106"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}