New Delhi: In a sign of thaw in ties, New Delhi will put on hold retaliatory tariffs on US goods. New Delhi senses that the resolution of dispute arisen out of Donald Trump’s hike in duties on Indian steel and aluminium is in sight.
India will not impose higher duties on US almonds, walnuts and apples, among others, from August 4 as planned earlier. The decision seems to be linked with the resumption of 2-plus-2 dialogue with the US involving external affairs and the defence ministers next month.
The delay in retaliatory action means more time for negotiation by the two countries.
“Things are progressing well. Both sides are discussing the tariff related issues and they will be sorted out. We are committed to an amicable solution to ongoing issues,” said a government official.
In response to Trump administration’s decision to hike duty on certain steel and aluminium products, India had in June announced to raise custom duty on 29 items coming from across the Atlantic. While the new tariff notification was to come in effect on August 4, the two countries have been engaged in talks to resolve the issue.
The US had on March 9 announced to levy a 25 per cent duty on steel and a 10 per cent duty on aluminium imported from all countries except Canada and Mexico. This had a total tariff implication of about $241 million on India. To counter this, India decided to hike the tariff on 29 items coming from the US by upto 50 per cent.
But at the same time, discussions are also being held to ease the tension on trade front. India has pressed for exemption from high duty imposed by the US on certain steel and aluminium products, resumption of export benefits to certain domestic products under their Generalised System of Preferences (GSP) and greater market access for its products from sectors such as agriculture, engineering and automobiles.
On the other hand, the US is demanding greater market access for its agri and manufacturing products.
Ever since President Trump assumed office, trade differences between India and the US have been rising. With US being one of the largest trade partners, bilateral trade between the two countries stood at $115 billion in 2016. As India has trade surplus with the US, the Trump administration wants to reduce it. For this, it has been pushing India for removing trade barriers for US goods.
India’s exports to the US in 2017-18 stood at $47.9 billion, while imports were $26.7 billion.
As many as 3,500 Indian products from sectors such as chemicals and engineering get duty free access to the US market under the GSP, introduced in 1976.