Question.
Think of some reasons why dumping is becoming a serious concern among trading nations
(Class 12 geography, Fundamentals of Human Geography, Chapter-9. International Trade )
Answer.
When one country sells goods to another country at a rate cheaper than its domestic market price, it is called dumping.
For example, a few years back, China was dumping steel into India at a cheaper rate; then India imposed an anti-dumping duty.
People from Duping importing countries get goods from abroad at cheaper rates. But dumping is becoming a serious concern among trading countries due to the following reasons:
Due to dumping, the cheap price of imported goods harms the domestic industry as the domestic industry is unable to sell its goods cheaper than the imported goods as their cost of production is higher. Ultimately, the industries lay off workers, which increases unemployment in the country. Eventually, many industries also shut down.
After the closure of the domestic industry, the exporting country tends to increase the prices of the goods as there is no longer any competition from the domestic market.
Therefore, dumping is the tool of trading nations to destroy the industries of other countries. This has serious implications for the overall economy and livelihoods of the importing countries in the long run.
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