India Mulls Customs Duty Hike On 30 U.S. Products
India has now submitted a revised list of 30 items -- including motorcycles, select iron and steel goods, boric acid and lentils -- to the WTO on which it proposes to raise customs duty by up to 50 percent.
As duties hiked by the U.S. on certain steel and aluminium products would have implications of about $241 million on India, the rise in tariffs proposed by New Delhi too would have an equal implication on America.
"The U.S. would be collecting $241 million worth of duties by hiking tariffs on certain steel and aluminium items from India, we also proposed to withdraw concessions of the similar amount from these 30 products imported by India from the U.S.," a source said.
Earlier in May, India proposed to raise duties by up to 100 percent on 20 products such as almonds, apple and specific motorcycles imported from the US. The additional duty proposed to be hiked on these items ranges from 10 percent to 100 percent.
"The revision is being provided to adjust the products and the tariff rates in accordance with India's rights reserved vide its notification to the Council for Trade in Goods contained in the WTO document...of May 18, 2018.
"India hereby reiterates its decision to suspend concessions or other obligations notified to the Council for Trade in Goods on May 18, 2018...of the General Agreement on Tariffs and Trade 1994 and Article 8.2 of the Agreement on Safeguards, that are substantially equivalent to the amount of trade affected by the measures imposed by the United States," according to a communication by India to WTO.
It said that the proposed suspension of concessions or other obligations takes the form of an increase in tariffs on selected products originating in the US, based on the measures of America.
"India reserves its right to further suspend substantially equivalent concessions and other obligations based on the trade impact resulting from the application of the measures of the US," it added.
The country has proposed this move under the WTO's Agreement on Safeguards. On March 9, US President Donald Trump imposed heavy tariffs on imported steel and aluminium items, a move that has sparked fears of a global trade war.
Trump signed two proclamations that levied a 25 percent tariff on steel and a 10 percent tariff on aluminium imported from all countries except Canada and Mexico.
Earlier India had stated that these suspensions will come into effect earlier than June 21, 2018, in case the US decides to continue the period of application of the measures.
It said that the duty imposed by America has affected steel exports by $198.6 million, while the same on aluminium was $42.4 million.
The other items include chickpeas, fresh apples, walnuts, refined palmolein, motorcycles with engine capacity over 800 cc, diagnostic reagents, and threaded nuts.
India has also dragged the U.S. to the World Trade Organisations dispute settlement mechanism over the imposition of import duties on steel and aluminium.
India's exports of steel and aluminium products to America stood at about $1.5 billion every year. Its exports to the US in 2016-17 stood at $42.21 billion, while imports were $22.3 billion.