India may take a firm stance against the US move to withdraw tariff concessions on Indian goods by imposing retaliatory tariffs from the next month. If the Indian government goes ahead with retaliatory tariffs, total 29 items imported from the US, including walnuts, lentils, boric acid and diagnostic reagents, among others will face higher duties, cutting benefits to the US exporters. The move will put extra burdon of $290 million per year on US items exported to India.
The US decision on tariff concession will also hurt India-US trade talks, which were going on to balance the deficit. The US on Tuesday announced to withdraw trade benefits to Indian products worth $5.6 billion under the Generalised System of Preferences (GSP), which was to expire in December 2020. The withdrawal of benefits will happen after a two month notice period.
Though the bilateral trade with the US is in favour of India -- the country imported items worth $26.3 billion in FY19 (April-December) while posted total export of $38.8 billion -- the concessions only amount to a duty reduction of $190 million a year. "We will wait for the April 1 deadline and then impose the higher tariffs," the ET quoted official requesting anonymity as saying.
Anup Wadhawan, Secretary, Commerce, on Tuesday said the Trump administration decided to go ahead with tariff cut despite the best efforts of India for a meaningful negotiation. "The US had initiated the review on the basis of representations by the US medical devices and dairy industries, but subsequently included numerous other issues on a self-initiated basis. These included issues related to market access for various agriculture and animal husbandry products, relaxation/easing of procedures related to issues like telecom testing/conformity assessment and tariff reduction on ICT products. The Department of Commerce engaged with various Government of India departments concerned with these issues, and India was able to offer a very meaningful way forward on almost all the US requests," a ministry statement said.
The United States Trade Representative (USTR) has said that India's termination from GSP follows its failure to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors.
Edited by Manoj Sharma