India’s Retaliatory Tariffs On U.S. Come Into Effect For 28 Items
Prime Minister Narendra Modi and U.S. President Donald Trump. India at present has a trade surplus with the U.S. (Photographer: Andrew Harrer/Bloomberg)

India’s Retaliatory Tariffs On U.S. Come Into Effect For 28 Items


India’s retaliatory tariffs on the U.S. came into effect Sunday, with 28 U.S. products—including almonds, walnuts and pulses—now attracting a higher import duty. The India U.S. tariffs are a response to the U.S. withdrawing the Generalised System of Preferences programme for Indian exporters on June 5.

India has removed the 29th item—artemia, a kind of shrimp—from the list of products that will attract higher tariffs.

The retaliatory tariffs will earn India $217 million in additional revenue.

Amending its June 30, 2017 notification, the Central Board of Indirect Taxes and Customs said it will "implement the imposition of retaliatory tariffs on 28 specified goods originating in or exported from the U.S. and preserving the existing MFN rate for all these goods for all countries other than U.S.".

On June 21, 2018, India decided to impose retaliatory tariffs on U.S. imports after the Donald Trump administration decided to significantly hike customs duties on certain steel and aluminium products. As India is one of the major exporters of these items to the U.S., the decision resulted in $240 million revenue loss for the domestic industry.

However, India extended the deadline for imposition of these duties multiple times, hoping that some solution would emerge from India-U.S. trade talks to arrive at a consensus. Those negotiations came to a halt after U.S.’s decision to withdraw the Generalised System of Preferences programme for Indian exporters.

The GSP withdrawal came into effect on June 5 this year. It impacts goods worth $5.5 billion from India to the U.S.

Retaliatory Tariffs: What Gets Impacted

While import duty on walnut has been hiked to 120 percent from 30 percent, duty on chickpeas, Bengal Gram and masur dal will be raised to 70 percent from 30 percent at present. The levy on lentils will be increased to 40 percent.

The import duty on boric acid and binders for foundry moulds would be hiked to 7.5 percent, while that on domestic reagents will be increased to 10 percent.

The other products on which duties will be hiked include certain kind of nuts, iron and steel products, apples, pears, flat-rolled products of stainless steel, other alloy steel, tube and pipe fittings, and screws, bolts and rivets.

India has also dragged the U.S. to the World Trade Organization's dispute settlement mechanism over the imposition of import duties on steel and aluminium. India exports steel and aluminium products worth about $1.5 billion to the U.S. every year.

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

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