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India mulls retaliatory tariffs after US ends preferential trade status

Meanwhile, the government is considering ways to enhance support to sectors impacted by the US government's decision to end the preferential trade status to India.

twitter-logo BusinessToday.In        Last Updated: June 4, 2019  | 14:18 IST
India mulls retaliatory tariffs after US ends preferential trade status
The Commerce Ministry is mulling retaliatory tariffs on US products and will take a final decision later this month in response to the US ending preferential trade status given to India.

The Commerce Ministry is mulling retaliatory tariffs on US products and will take a final decision later this month in response to the US ending preferential trade status given to India. The ministry is reportedly weighing its options carefully and might enforce the duties on goods such as apples, boric acid and almonds on June 16 or later.

"The final decision on whether retaliatory duties on US goods would be imposed as scheduled on June 16 or further postpones may be taken by the Commerce ministry after consultations with the Ministry of External Affairs," a government official told the Hindu BusinessLine.

Meanwhile, the government is considering ways to enhance support to sectors impacted by the US government's decision to end the preferential trade status to India. The status permitted duty-free exports of over 3,000 items from the country.

Also Read: Govt to help sectors affected by US' decision to end preferential trade status to India

The Commerce and Industry Minister Piyush Goyal who recently assumed charge of the ministry has been convening back to back meetings with officials on critical issues over the last weekend.

He will also head a meeting of central and state governments' representatives, industry as well as exporters on June 6 to deliberate ways to boost exports amidst growing protectionism globally and discuss various issues related to the country's trade.

Also Read:India-US: What is preferential trade status and how will its removal affect ties?

The minister is expected to consider ways to cushion the export sector following the US decision to withdraw the Generalised System of Preferences (GSP) scheme, a government official told the news daily.

The sectors such as imitation jewellery, leather articles (other than footwear), chemicals & plastics, agriculture, pharmaceuticals and surgical instruments could be the worst affected by the US' decision, according to the Federation of Indian Export Organisations (FIEO).

Also Read:US to end preferential trade treatment for India from June 5; what it means and will it affect country?

The trade promotion body has also suggested that the affected sectors be given benefits under the Rebate of State & Central Tax Levies Scheme (RoSCTL).

US President Donald Trump terminated India's designation as a beneficiary developing nation under the key GSP (Generalised System of Preference) trade programme, with effect from June 5. The White House in a statement said India had not assured the United States that it would provide "equitable and reasonable access" to its markets, which was why the Trump administration had taken the action.

The US government had notified India on March 4, 2019, of its intent to terminate the country's designation. The 60-day notice period ended on May 3. "I have determined that India has not assured the US that it will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India's designation as a beneficiary developing country effective June 5, 2019," Trump said.

Also Read:India's trade deficit grows to $15.33 billion, exports improve only a little in April

The government had responded to the US action, saying India, as part of bilateral trade discussions, had offered resolution on significant US requests to find a mutually acceptable solution but to no avail. "India, like the US and other nations, will always uphold its national interest in these matters," a statement by the Ministry of Commerce said.

India was the largest beneficiary of the programme in 2017 with $5.6 billion worth of exports to the US being given duty-free status, according to a Congressional Research Service report issued in January.

Also Read:Suspension of preferential trade status for India under GSP is 'done deal': Trump

Also Read: US President Donald Trump says he plans to end India's preferential trade treatment

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