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India to Impose Retaliatory Tariff on 29 US Items from 16 June

A notification with this regard will be issued by the finance ministry soon, officials said.

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After extending the deadline for several times, India has decided to impose additional customs duties on 29 US products, including almond, walnut and pulses, with effect from 16 June, making them expensive for domestic consumers, sources said.

A notification with this regard will be issued by the finance ministry soon, they added.

The move will hurt American exporters of these 29 items as they will have to pay higher duties on these products, making those items costlier in the Indian markets.

The country would get about USD 217 million additional revenue from such imports.
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The government had on 21 June 2018 decided to impose these duties in retaliation to the US decision of significantly hiking customs duties on certain steel and aluminium products.

India has informed the US about its decision to go ahead with the retaliatory duties, the sources said.

America had in March last year imposed 25 percent tariff on steel and a 10 percent import duty on aluminium products. Earlier, there was no duty on these goods.

As India is one of the major exporters of these items to the US, the move has revenue implication of about USD 240 million on domestic steel and aluminium products.

India extended the deadline for imposition of these duties multiple times in the hope that some solution would emerge during a negotiation between India and the US on a proposed trade package.

But those negotiations came to a halt following the decision of the US to withdraw export incentives to Indian exporters under its Generalised System of Preferences (GSP) programme. These benefits were rolled back from 5 June. It will impact goods worth USD 5.5 billion from India to America.

As part of the imposition of higher import duties on 29 US products, India has notified higher tariffs on several goods.

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While import duty on walnut has been hiked to 120 percent from 30 percent, duty on chickpeas, Bengal gram (chana) and masur dal will be raised to 70 percent, from 30 percent currently. Levy on lentils will be increased to 40 percent.

The duty on boric acid and binders for foundry moulds would be hiked to 7.5 percent, while that on domestic reagents will be increased to 10 percent. Duty on artemia, a kind of shrimp, will be hiked to 15 percent.

The other products on which duties will be hiked include certain kind of nuts, iron and steel products, apples, pears, flat rolled products of stainless steel, other alloy steel, tube and pipe fittings, and screws, bolts and rivets.

India has also dragged the US to the World Trade Organisation's (WTO) dispute settlement mechanism over the imposition of import duties on steel and aluminium.

India exports steel and aluminium products worth about USD 1.5 billion to the US every year.

India's exports to the US in 2017-18 stood at USD 47.9 billion, while imports were at USD 26.7 billion. The trade balance is in favour of India.

(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

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Topics:  India-US Ties   trade tariff   Tariffs 

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