What is Anti dumping Duty:
An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value. 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.
IN SIMPLE TERMS, IT RESTRICTS CHEAPER IMPORTS BY LEVYING ANTI DUMPING DUTIES DEPENDING ON THE PRICE OF IMPORT FROM VARIOUS COUNTRIES. POST THE LEVY OF ANTI DUMPING DUTY, THE DOMESTIC MANUFACTURED SELLING PRICE WILL BE SAME AS THAT OF IMPORTED ONES. THUS GIVING THE DOMESTIC MANUFACTURER LEVEL PLAYING FIELD.
NOW, WHEN THE PRICE OF A PRODUCT IS SAME FOR IMPORTED ONES AS WELL AS DOMESTICALLY MANUFACTURED ONES, THE DOMESTIC BUYERS WILL PREFER DOMESTIC MANUFACTURER INSTEAD OF AN IMPORTED ONES DUE TO THE BELOW REASONS:
1. LOWER LOGISTICS COST
2. NO FOREX RISK
3. LESSER PAPERWORK
4. CAN ORDER SMALLER QUANTITIES
Although it is good for domestic manufacturers of these products but it increases the cost of the downstream manufacturer who use these products as raw materials. For example: In 2017-18, the prices of Graphite electrode went up exponentially which is used as a raw material for manufacturing steel, thus increasing the cost of the steel manufacturer. There was an anti dumping duty in place that prevented import of cheaper graphite electrode. So the domestic steel manufacturers fought against this anti dumping duty and finally won it.
Link to other details on Anti Dumping duty in India: Link
The videos below explains Anti dumping duty for US market. The similar process is followed in India as well under WTO.