Relevance: International Trade, External Sector (GS-3) • Source: The Hindu; United Nations Comtrade

The United States has announced fresh tariffs on Indian rice, alleging “dumping.” This comes amid ongoing trade negotiations and existing 50% tariffs on several Indian goods.

Impact of Tariffs on Both Nations

• Impact on India: Minimal—only 3.3% of India’s rice exports go to the U.S., making it a minor market.
  
• Impact on U.S.: Significant—India supplies 26% of U.S. rice imports, so tariffs could raise domestic prices and hurt American consumers and food processors.
  

What are Tariffs?

Tariffs function as border taxes imposed by a government on imported goods to protect domestic industry or address alleged dumping.

Q. In the context of international trade, consider the following statements about dumping:

1. Dumping occurs when a product is exported at a price lower than its normal value, which may be the domestic price or the cost of production.
   
2. Anti-dumping duties can be imposed under World Trade Organization rules only after a country proves material injury to its domestic industry.
   
3. All forms of dumping of agricultural commodities are automatically prohibited under the Agreement on Agriculture.
   

Select the correct answer:
A. 1 and 2 only
B. 2 only
C. 1 and 3 only
D. 1, 2 and 3