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India again defers tit-for-tat tariffs against US goods

India and the United States have been moving rapidly to strengthen ties in bilateral defence and strategic relationship. But on trade, both continue to blow hot and cold.

business Updated: Sep 18, 2018 08:57 IST
Hindustan Times, New Delhi
India,Donald Trump,India-US tariffs
This is the third time that India has deferred the tit-for-tat tariff, seen as India’s response to the Trump administration raising import duties on Indian steel and aluminium products. (AP File Photo)

India has put off retaliatory tariff against 29 American products worth $ 235 million that were to come into force on Tuesday, according to a report in Mint.

This is the third time that India has deferred the tit-for-tat tariff, seen as India’s response to the Trump administration raising import duties on Indian steel and aluminium products. According to this report, a decision had been taken to postpone the retaliatory hikes until 3 November since the two countries were attempting to find a solution.

The US had imposed 25 percent duty on certain steel products and 10 percent on aluminium products, which would help the US government collect 241 million dollars in import duty.

In response, India announced higher tariff on 29 US products, including almonds, apples and phosphoric acid worth $10.6 billion imports in retaliation to the steel and aluminium tariff hikes by the US.

New Delhi, however, did not impose the new tariffs immediately but left a door open for bilateral negotiations to finalise a trade package to douse tensions. The duty hike was expected to come into force from 4 August, but India yet again deferred implementation by 45 days till 18 September.

India and the United States have been moving rapidly to strengthen ties in bilateral defence and strategic relationship. But on trade, both continue to blow hot and cold. New Delhi, which has been in talks for a trade package with the US, has been demanding a waiver on tariff hikes similar to the ones granted to Argentina, Brazil and South Korea.

Earlier this month, India had declined Washington’s offer to waive tariff hikes on steel and aluminium in exchange for India capping exports of these items at 70% of its total exports to the US last year.

India has argued that the steps taken by the US are safeguard measures though they are in the name of national security. It has claimed that steel and aluminium exports worth $1.2 billion to the US have been hit post the tariff hike, with the US collecting additional tariffs of $241 million.

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.

First Published: Sep 18, 2018 08:08 IST