Normal Value explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
An article is treated as dumped when it is exported to India at a price below its normal value. Rule 10 states that test in a few lines, and Annexure I supplies the principles the designated authority must apply when it works out normal value, export price and the margin of dumping: which cost records to trust, which low-priced sales to ignore, how to compare prices fairly and how to treat non-market economy countries.
This article reads the rules as amended up to the CBIC text dated 1 February 2021 (no amending notification found in CBIC's 2023-2026 lists; 2021-2022 not re-checked). Later notifications should be checked before you rely on the current text.
Under rule 10, an article is dumped if exported to India at a price less than its normal value. The designated authority determines normal value, export price and the margin, taking into account, inter alia, the eight paragraphs of Annexure I. Costs normally come from the exporter's own records; below-cost sales may be disregarded if made over not less than six months in substantial quantities; and a fair comparison is made at the same level of trade, normally ex-factory.
Rule 10: the test in one sentence
Rule 10 says an article is considered dumped if it is exported from a country or territory to India at a price less than its normal value. In those circumstances the designated authority determines the normal value, export price and the margin of dumping, taking into account, inter alia, the principles in Annexure I. The words "inter alia" matter: Annexure I is not a closed list. Section 9A of the Customs Tariff Act, 1975 is the source of the underlying concept; the Act's text is outside this article. For the process around this rule, see our guide to anti-dumping duty levy and process and the earlier steps in Rules 5 to 9.
Annexure I is headed "(See rule 8)", although it is rule 10 that refers to it; the paragraphs apply to the determination described in rule 10.
Annexure I, paragraph by paragraph
| Para | Subject | What it says |
|---|---|---|
| 1 | Cost records | Costs normally taken from the exporter's or producer's records, if kept in line with the generally accepted accounting principles of the exporting country and reasonably reflecting production and sale costs |
| 2 | Sales below cost | Such sales may be treated as not in the ordinary course of trade and disregarded, on two conditions |
| 3 | Allocation of costs | All available evidence on proper allocation; adjustments for non-recurring items and start-up |
| 4 | Administrative, selling, general costs and profit | Actual data in the ordinary course of trade; fallback methods |
| 5 | Constructed export price | Allowance for costs, duties and taxes between importation and resale, and profits |
| 6 | Fair comparison | Same level of trade, same time, due allowances, currency rules |
| 7 | Non-market economy imports | Normal value from a market economy third country or other basis |
| 8 | Non-market economy definition | Criteria, presumption and a printed list of countries |
Paragraph 1: whose records
Elements of cost are normally determined on the basis of records kept by the exporter or producer under investigation, provided the records are in accordance with the generally accepted accounting principles of the exporting country and reasonably reflect the cost of producing and selling the article.
Paragraph 2: sales below cost
Domestic sales of the like product in the exporting country, or sales to a third country, at prices below per unit (fixed and variable) cost of production plus administrative, selling and general costs, may be treated as not in the ordinary course of trade by reason of price, and disregarded in determining normal value, if the authority determines that:
- (i) the sales are made within a reasonable period (not less than six months) in substantial quantities, meaning that the weighted average selling price is below the weighted average per unit cost, or the volume of sales below per unit cost is not less than twenty per cent of the volume sold in the transactions under consideration; and
- (ii) the prices do not provide for recovery of all costs within a reasonable period. Prices are treated as providing for recovery if they are above the weighted average per unit cost for the period of investigation, even if they were below cost at the time of sale.
Paragraphs 3 and 4: cost allocation, overheads and profit
Under paragraph 3 the authority considers all available evidence on proper allocation of costs, provided the allocation has been historically used by the exporter, and adjusts for non-recurring items and start-up operations. Under paragraph 4, administrative, selling and general costs and profit (referred to in section 9A(1) of the Act) are based on actual data for sales in the ordinary course of trade; failing that, on the exporter's own amounts for the same general category of article, the weighted average of other exporters, or any other reasonable method, with profit not exceeding that normally realised on sales of the same general category in the country of origin.
Paragraph 5: constructed export price
When the authority arrives at a constructed export price, it gives due allowance for costs, including duties and taxes, incurred between importation and resale, and for profits.
Paragraph 6: fair comparison
- 6(i): the comparison is between export price and normal value at the same level of trade, normally ex-factory, for sales made as nearly as possible at the same time, with due allowance on merits for differences affecting price comparability (conditions and terms of sale, taxation, levels of trade, quantities, physical characteristics, and any other demonstrated difference).
- 6(ii): where export price is constructed, the comparison is made only after establishing normal value at an equivalent level of trade.
- 6(iii): currency conversion uses the rate on the date of sale, or the forward rate where a forward sale is directly linked to the export sale. Exchange rate fluctuations are ignored, and exporters get at least sixty days to adjust export prices to reflect sustained movements during the period of investigation.
- 6(iv): during investigation, the margin is normally established by comparing a weighted average normal value with export prices on a transaction-to-transaction basis. A weighted average normal value may be compared to individual export transactions if export prices differ significantly among purchasers, regions or time periods, and an explanation is given why a weighted average or transaction comparison cannot take this into account.
Paragraphs 7 and 8: non-market economy countries
For imports from non-market economy countries, paragraph 7 says normal value is determined on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other countries including India, or if that is not possible, on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted if necessary to include a reasonable profit margin. The authority selects the third country in a reasonable manner, keeping in view the level of development of the country concerned and the product, and parties must be informed without unreasonable delay and given a reasonable period to comment.
Paragraph 8(1) defines a non-market economy country as one the authority determines as not operating on market principles of cost or pricing structures, so that sales there do not reflect fair value, by the criteria in sub-paragraph (3). Under 8(2), a country determined or treated as non-market in an anti-dumping investigation by the authority or by the competent authority of any WTO member during the preceding three years is presumed to be one, but the country or firms may rebut the presumption. Sub-paragraph (3) lists four criteria: decisions on prices, costs and inputs made in response to market signals without significant State interference; distortions carried over from the former non-market system; bankruptcy and property laws that give legal certainty; and exchange rate conversions at the market rate. A proviso lets the authority apply paragraphs 1 to 6 where written evidence shows market conditions prevail for one or more firms. Sub-paragraph (4) lets it treat as a market economy a country that a WTO Member has treated as such after a published evaluation.
The Note to paragraph 8 prints a list of non-market economy countries: Albania, Armenia, Azerbaijan, Belarus, Peoples' Republic of China, Georgia, Kazakstan, North Korea, Kyrghyzstan, Moldova, Mongolia, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan and Vietnam. A country on it that wants to establish market economy status may provide information, which the authority must take due account of. Footnotes show paragraphs 7 and 8 came in through Notification No. 44/99, 28/2001, 1/2002 and 101/2003.
A short example
Hanover Fabrics' home sales over seven months include a share below cost that is not less than twenty per cent of the volume sold. Under paragraph 2 those sales may be left out in fixing normal value, and the comparison is then made ex-factory under paragraph 6. Our legal consultation team can help you test your own records against these principles.
Need help with dumping margins?
Whether you are an exporter facing a questionnaire or a producer preparing an application, the cost and comparison rules decide the margin. A focused legal consultation can review cost records, sales data and adjustment claims against Annexure I before you file or respond.
Key takeaways
- Rule 10: dumped means exported to India at a price less than normal value.
- Annexure I applies "inter alia"; it is not an exhaustive code.
- Below-cost home sales may be disregarded only under the two paragraph 2 conditions, including a period of not less than six months.
- Comparison is at the same level of trade, normally ex-factory, with allowances.
- Exporters get at least sixty days to adjust prices for sustained exchange rate movements.
- Non-market economy cases use a third-country or other reasonable basis for normal value.
Read next
- Rules 5-9: initiation, principles, confidentiality and accuracy
- Rule 11 and Annexures II and III: injury and the non-injurious price
- Anti-dumping duty: process and calculation
- Anti-dumping duty levy and process
Disclaimer: Based on the Customs Tariff Act rules named above as published on the CBIC Tax Information Portal or in the Gazette, as consulted on 3 October 2026. Later notifications, duty notifications and the Customs Tariff Act, 1975 should be checked. This article is general information, not legal advice; check the official text before acting.