Economy

India to impose retaliatory tariffs on 29 U.S. goods from June 16

Tariffs on the 29 U.S. goods — including walnuts, apples, and some pulses — were initially announced in June 2018 in retaliation to U.S. President Donald Trump’s decision in March that year to impose higher import tariffs on Indian aluminium and steel. File

Tariffs on the 29 U.S. goods — including walnuts, apples, and some pulses — were initially announced in June 2018 in retaliation to U.S. President Donald Trump’s decision in March that year to impose higher import tariffs on Indian aluminium and steel. File   | Photo Credit: REUTERS

India has decided to impose retaliatory tariffs on 29 goods imported from the U.S. from June 16 onwards, officials in the Commerce Ministry told The Hindu. The decision comes a year after New Delhi initially decided to do so.

The tariffs will place a burden of $220-290 million on the U.S., about the same amount imposed by Washington on India in 2018.

The official notification of the tariffs will be issued before June 16 by the Finance Ministry, the official added.

June 16 deadline

“India has decided to go ahead and impose the retaliatory tariffs on U.S. items,” the Commerce Ministry official said. “The deadline after which the tariffs would be imposed was supposed to be June 16. The notification to impose the tariffs will be issued by the Finance Ministry before then.”

The tariffs on the 29 goods — including walnuts, apples, and some pulses — were initially announced in June 2018 in retaliation to U.S. President Donald Trump’s decision in March that year to impose higher import tariffs on Indian aluminium and steel. India has repeatedly asked for exemption from these higher tariffs, but to no avail.

However, negotiations continued for about a year, with India repeatedly extending the deadline for the imposition of retaliatory tariffs. These talks, as well as the ones surrounding granting India duty-free imports for certain items under the U.S.’ Generalised System of Preferences (GSP) seem to have fallen through.

India to impose retaliatory tariffs on 29 U.S. goods from June 16
 

Last year, the U.S. announced that it would be reviewing India’s eligibility for the GSP, and in June this year, decided that it would withdraw the benefits.

According to the Trade Promotion Council of India (TPCI), the impact of the retaliatory tariffs imposed by India on the U.S. would amount to about $290 million. While the Federation of Indian Export Organisations estimates the impact to be $220-240 million, the consensus view is that the impact is commensurate to the impact on India due to the U.S. tariffs on aluminium and steel imports.

“If the Indian government goes ahead with retaliatory tariffs, 29 items imported from the US will face higher duties, cutting benefits to U.S. exporters,” Chairman of TPCI Mohit Singla said.

“India is a robust market and its economic fundamentals are sound,” Mr Singla added. “The withdrawal of GSP will not make much difference as Indian exports are all geared to take this challenge.”

“The point is that it was something that was long due,” Director General and CEO of FIEO Ajay Sahai said. “We decided to impose the retaliatory tariffs in June last year, but in the spirit of negotiation, we postponed it several times. But unfortunately it has not yielded the desired result. The effect will be matching the amount that will affect India on aluminium and steel exports to the U.S..”

Mr Sahai added that the imposition of increased import tariffs on agricultural commodities will help domestic farmers.

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Printable version | Aug 13, 2020 2:16:29 AM | https://www.thehindu.com/business/Economy/india-to-impose-retaliatory-tariff-on-29-us-items-from-june-16/article27935160.ece

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