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Published 06:30 IST, June 16th 2019

India imposes hike in customs duty on 28 US products in response to high tariffs imposed by Washington

The move will hurt American exporters of these 28 items as they will have to pay higher duties, making those items costlier in the Indian market.

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India imposes hike in customs duty on 28 US products in response to high tariffs imposed by Washington
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India on Saturday announced a hike in customs duties on as many as 28 US products, including almond, pulses and walnut, in response to higher tariffs imposed by Washington on Indian products like steel and aluminium. The increased customs duties will come into effect from Sunday, an official notification said.

The move will hurt American exporters of these 28 items as they will have to pay higher duties, making those items costlier in the Indian market.

Amending its June 30, 2017, notification, the Central Board of Indirect taxes and Customs (CBIC) said Saturday's notification will "implement the imposition of retaliatory duties on 28 specified goods originating in or exported from USA and preserving the existing MFN rate for all these goods for all countries other than USA".

Earlier, the list included 29 goods but India has removed artemia, a kind of shrimp, from the list. India would get about USD 217 million additional revenue from such imports.

The government had on June 21, 2018 decided to impose these duties in retaliation to the US decision of significantly hiking customs duties on certain steel and aluminium products.

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America had in March last year imposed 25 per cent tariff on steel and a 10 per cent import duty on aluminium products. Earlier, there was no duty on these goods.

As India is one of the major exporters of these items to the US, the move has revenue implication of about USD 240 million on domestic steel and aluminium products.

India extended the deadline for imposition of these duties eight times in the hope that some solution would emerge during a negotiation between India and the US on a proposed trade package.

But those negotiations came to a halt following the decision of the US to withdraw export incentives to Indian exporters under its Generalised System of Preferences (GSP) programme. These benefits were rolled back from June 5. It will impact goods worth USD 5.5 billion from India to America.

As part of the imposition of higher import duties on US products, India has notified higher tariffs on several goods.

While import duty on walnut has been hiked to 120 per cent from 30 per cent, duty on chickpeas, Bengal gram (chana) and masur dal will be raised to 70 per cent, from 30 per cent currently. Levy on lentils will be increased to 40 per cent.

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

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.

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India has also dragged the US to the World Trade Organisation's (WTO) dispute settlement mechanism over the imposition of import duties on steel and aluminium.

India exports steel and aluminium products worth about USD 1.5 billion to the US every year.

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

06:30 IST, June 16th 2019