India Postpones Retaliatory Tariff Hike on US Products to 16 June

This extension comes in the backdrop of the US decision to withdraw export incentives provided to Indian exporters

Narendra Modi and Donald Trump.

(Photo: The Quint)

The government on Tuesday, 14 May, again extended its deadline to impose retaliatory import duties on 29 US products, including almond, walnut and pulses, till 16 June.

A notification of the finance ministry said that implementation of increased customs duty on specified imports originating in the US has been postponed from 16 May to 16 June this year.

These deadlines were extended several times since June 2018, when India decided to impose these duties in retaliation to a move by the US to impose high customs duties on certain steel and aluminium products.

This extension comes in the backdrop of the US decision to withdraw export incentives being provided to Indian exporters under Generalised System of Preferences (GSP) programme, which is expected to impact India's exports to the US worth 5.6 billion dollars under this scheme.

America had given 60 days notice, which ended on 2 May but has yet to withdraw those benefits.

Meanwhile, US Commerce Secretary Wilbur Ross and Commerce Minister Suresh Prabhu held bilateral meetings on 6 May in Delhi.

Trade War: Key Demands

Further extension of GSP benefits was part of a trade package being negotiated between the two countries. However, those negotiations hit a roadblock after the US announced its decision to roll back GSP benefits from Indian exporters.

The US administration has alleged India in imposing high import duties on products such as paper and Harley Davidson motorcycles from America.

India wants US to exempt them from the high duty imposed on certain steel and aluminium products, provide greater market access for agriculture, automobile, automobile components and engineering sector products.

On the other hand, the US is demanding greater market access through a cut in import duties for its agriculture goods, dairy products, medical devices, IT and communication items.

As part of the imposition of higher import duties, India has notified higher tariffs on several products. While import duty on walnut has been hiked to 120 per cent from 30 per cent, duty on chickpeas, Bengal gram (chana) and masur dal will be raised to 70 per cent, from 30 percent currently. Levy on lentils will be increased to 40 per cent.

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