India Extends Retaliatory Tariff Deadline On U.S. Products Again
India has again extended its deadline to impose retaliatory tariff on 29 U.S. products including almond, walnut and pulses till May 16.
According to a finance ministry notification on Friday, implementation of increased customs duty on specified U.S. imports has been postponed from May 2 to May 16.
This extension comes in the backdrop of the U.S. decision to withdraw export incentives being provided to them to Indian exporters under Generalized System of Preferences scheme, which is expected to impact India’s outbound shipments to the U.S. worth $5.6 billion under this scheme.
The U.S. has given 60 days notice, which would end this week, to withdraw these benefits. Amid this, U.S. Commerce Secretary Wilbur Ross and India’s commerce minister Suresh Prabhu will hold bilateral meetings on May 6 in New Delhi to discuss trade-related issues.
According to people aware of the developments, India may go ahead with its decision to impose retaliatory tariffs if the U.S. withdraws the GSP benefits.
Further extension of GSP benefits was part of a trade deal being negotiated between India and the U.S. However, those negotiations hit a roadblock after the U.S. announced its decision to roll back GSP benefits from Indian exporters.
The Trump administration has alleged that India is imposing high import duties on products such as paper and Harley-Davidson motorcycles from America.
India wants U.S. to exempt them from the high import duty imposed on certain steel and aluminium products, provide greater market access for agriculture, automobile, automobile components and engineering sector products.
The U.S., on its part, 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 percent from 30 percent currently, duty on chickpeas, Bengal gram and masoor dal will be raised to 70 percent from 30 percent currently. Levy on lentils will be increased to 40 percent from 30 percent.
India's exports to the U.S. in 2017-18 stood at $47.9 billion, while imports were at $26.7 billion. The India-U.S. trade deficit is in favour of India.