Explanation:

Statement 1: Suppose a nation like China is dumping (exporting) its goods at exceptionally  cheap prices so that it can capture the market. Since these cheap prices can’t be justified by market forces alone, the Indian government must apply a duty (like a tax) on the product to raise its price. This is to shield the domestic producers.

Statement 2: Capital goods are usually not dumped by nations, since the industry is highly segmented and it’s hard to dump products at cheap prices.

Statement 3: It has nothing to do with FDI or FII.

India has initiated over two hundred anti-dumping investigations between 2012 and 2017 against various countries, including China and Indonesia. During the period, maximum number of cases were against China. Product categories on which the levy was imposed include chemicals, fibre boards, glass & glassware, pharmaceuticals and steel.