BC, i am also a bit curious to know more on CVD. i did a bit of researching to see how exactly it is levied on the exported products. A "countervailing duty" is a special duty levied, in addition to the regular duty and other charges, by an importing country on its imports which have been found to be subsidized in the country of origin or exportation. It is equal to the ascertained amount of subsidy, calculated in terms of subsidy per unit of the subsidized exported product. It is imposed following an affirmative final determination. Are all subsidies countervailable? Not all subsidies are countervailable/actionable. Subsidy, in order to be countervailable, must be “specific;” i.e., explicitly limited to: * An enterprise or group of enterprises; * An industry sector or group of industries; and * A designated geographic region within the jurisdiction of the granting authority ___________________________________________________________________ The link that I provided says: The recent Indian budget has proposed to impose countervailing duty on the maximum retail price of goods exported from Nepal. This provision is against the spirit of the treaty, which provides for a level playing field. This has resulted in the duty amount becoming higher and the cost factor getting non-competitive for us. In fact, it penalizes the industries for existing in Nepal. so i believe it's not ONLY with products exported via india or to india but it can be incurred on products exported directly to other countries as well. of course, in our case, most of the products -- not only garments but also ayurvedic/herbal products--are exported via india and although CVD levied on ayurvedic products are not so much, that on carpets and pashmina are equal to the amount of subsidy or beyond and the termination of quota system implied lately on account of the WTO provision is yet another huge blow for the export sector.