Chennai: In a move that was in the offing for nearly a year, the government has announced that it will increase tariffs on 29 US goods from tomorrow (16 June).
The move comes as a result of the American government imposing extra taxes on steel and aluminium a year ago, after deferring decision many times. The list of products considered for duty increase has 18 iron and steel items.
Crucially, the decision has been made just over a week after the US formally withdrew export incentives of roughly $190 million a year on Indian exports of $5.6 billion under the generalised systems of preference (GSP).
The decision has also come ahead of the scheduled meeting between Prime Minister Narendra Modi and US President Donald Trump on the sidelines of the G20 meeting on 28-29 June in Japan.
US secretary of state Mike Pompeo is expected to visit New Delhi on 25 June to have discussion with External Affairs Minister, S Jaishankar.
Originally slated to be clamped on 4 August 2018, the tariffs were deferred eight times. Reports state that the move is part of a ‘retaliatory measure’ against the American government.
Reports state that New Delhi wants the US to recognise India as the only large economy whose goods trade surplus with the US has been shrinking, unlike China’s. In 2018, the surplus shrank $4 billion from the previous year.
The Commerce Department has informed the Finance and External Affairs Ministries of the move and an official notification is expected to be issued today.
The Commerce Department has said that earnings through the new tax will equal the losses faced by Indian industry after the US tariffs on steel and aluminium.
US Commerce Secretary Wilbur Ross, in his recent visit to India said the Asian country was only the 13th largest export market for America due to its overtly restrictive market access barriers. On the other hand, US is India’s largest export market, accounting for 20 per cent of all shipments, he said.
India, in retunr, had offered to reduce tariffs on telecom network equipment and medical devices.
| Age-old Intimation |
| In June 2018, after the US imposed 25 per cent extra duty on steel and 10 per cent on aluminium supplies from select nations, including India, New Delhi had informed the World Trade Organization (WTO) its decision to slap retaliatory tariffs, having failed to persuade Washington to give it a waiver from the levy. |