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India imposes retaliatory tariffs on 28 products imported from the US

The Indian Express logo The Indian Express 16-06-2019

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India has decided to impose its long-promised retaliatory tariffs on more than 28 products imported from the US, including almonds, fresh apples and phosphoric acid, amidst rising trade tensions between the two countries. The move will take effect from Sunday, stated a notification by the Central Board of Indirect Taxes and Customs (CBIC) late Saturday.

In a separate notification, the CBIC also raised the standard customs duty (applicable for all countries) for lentils, boric acid and some diagnostic reagents.

The standard duty for lentils has been raised to 50 per cent from 40 per cent, for boric acid to 27.5 per cent from 17.5 per cent and for diagnostic reagents other than those for pregnancy confirmation and diagnosing AIDS to 30 per cent from 20 per cent.

The Indian Express Saturday reported that the government was planning on notifying these retaliatory tariffs before the Sunday deadline.

According to the latest notifications, the import duties on fresh or dried shelled almonds has been raised to Rs 41/kg, while the tariffs on fresh apples, earlier 50 per cent, has gone up to 70 per cent. The import duty on phosphoric acid has been set at 10 per cent.

India is one of the largest importers of almonds from the US, with imports worth $615.12 million of fresh or dried shelled almonds in 2018-19. Its imports of fresh apples stood at $145.20 million and phosphoric acid at $155.48 million during the same period, shows information from the Indian commerce ministry. The import of diagnostic reagents stood at nearly $145 million that year.

The move comes around two weeks after the Trump administration notified its decision to withdraw India’s duty-free benefits under the US’ select trade programme. Indian commerce minister Piyush Goyal last week indicated that India may not pursue a resolution to the withdrawal of trade benefits under the programme, known as the Generalised System of Preferences (GSP).

India had first notified the retaliatory tariffs on over $200 million worth of goods in June 2018 after the US imposed tariffs on steel and aluminium products. However, the government deferred the move several times over the course of the last year.

Meanwhile, New Delhi and Washington were engaged in negotiations over the office of the United States Trade Representative’s review of India’s benefits under GSP, which allows some countries duty-free exports of thousands of items to the US. The USTR announced its decision to withdraw India’s beneficiary status in March, but initially held off on notifying the withdrawal in May while the Indian general elections were taking place.

However, soon after the re-elected Narendra Modi government was sworn in, US president Donald Trump announced he was terminating India’s benefits under the GSP scheme, a move that the Indian commerce ministry called “unfortunate”. India was the largest beneficiary under the GSP scheme.

“India, like the US and other nations, shall always uphold its national interest in these matters. We have significant development imperatives and concerns and our people also aspire for better standards of living,” the ministry had stated earlier. Experts feel the move to retaliate, despite the delay, signals that India can adequately respond when there are affronts on its trading rights.

The US is one of India’s largest trading partners, exporting $33.1 billion worth of goods to India in 2018. However, India still had a goods trade surplus of $21.3 billion with the country.

Officials from the Trump administration earlier this week reportedly said that the US was open to dialogue to resolve these differences, but demanded that India drop its trade barriers. Trump has in the past called India a “tariff king”.

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