india and US tariff war
Credit: The Hans India

The United States has already withdrawn the special privileges for India and increased duty on some Indian products such as aluminium and steel. In reply, the Modi government has decided to apply higher retaliatory tariffs on twenty-nine US products from 16th June. According to an official notification, these twenty-nine products include highly consumed items such as pulses, almond, and walnut. According to economic experts, this will directly hurt American businesses. And the prices of these twenty-nine products will be increased in Indian markets.

CBIC– Central Board of Indirect taxes and Customs, is in search of an opportunity to amend its June 30, 2017 notification, according to the official note.

Implement the imposition of retaliatory duties on 28 specified goods originating in or exported from the USA and preserving the existing MFN rate for all these goods for all countries other than the USA

This Indian tariff will give a considerable burden of $220-290 million on the U.S., and some economic experts are saying that it is the same amount that the US imposed on India in 2018. Finance Ministry has declared this official note before June 16, 2019.

June 16

According to the latest update, India has already decided to accelerate and impose a tariff on twenty-nine US products. Official Commerce Ministry has said “The deadline after which the tariffs would be imposed was supposed to be June 16. The Finance Ministry will issue the notification to impose the tariffs before then.”

The reason behind this Indian Tariff on the US

Those twenty-nine products, including highly consumed products such as walnut, pulses, and almonds, will fall under the new tariff. And this tariff was initially announced in 2018. In March 2018, the US president Donald Trump had imposed very higher tariffs on Indian products such as aluminium and steel.

The negotiation period was nearly one year between India and the US. But India was also extending retaliatory tariff imposition’s deadline in the hope of a positive response.

In 2018, the US official announced that it is mainly for reviewing India’s eligibility for the GSP and in June 2019, the US has decided to withdraw the benefits.

TPCI- Trade Promotion Council of India chairman, Mohit Singla, has said: “If the Indian government goes ahead with retaliatory tariffs, 29 items imported from the US will face higher duties, cutting benefits to U.S. exporters”. He also added that India is a country with a robust market and it has sound economic fundamentals and the withdrawal of GSP will not affect at a significant level simply because Indian exports are all set to welcome this challenge.

FIEO CEO, Ajay Sahai has shared that they decided to impose the tariff in last year, but due to the negotiation, they have postponed it for several times, but this did not bring any positive result. And India has replied with the same amount of burden on the US. “Increased import tariff imposition on the agricultural supplies will help the domestic farmers,” Sahai added.