India set to impose retaliatory tariff on 29 US goods

Image for representation (Reuters file photo)

India is all set to impose a retaliatory tariff on 29 US goods including almonds, walnut, apples and pulses from Sunday after Washington withdrew incentives to Indian exporters under its Generalised System of Preferences (GSP) programme on June 1.

But it is yet not clear whether the list includes Harley-Davidson motorcycles on which India reduced import duty to 50% from 100%.

The GSP offered duty-free access to the US market for more than 3,000 items from India.

Official sources said the US has been informed about the Indian decision, a move that could intensify the global trade war. Sources said notification to this effect could be issued latest by Saturday morning.

India’s move comes days ahead of a meeting between Prime Minister Narendra Modi and US President Donald Trump on the sidelines of the G20 meeting at Osaka in Japan on June 28-29.

New Delhi was to impose the retaliatory tariffs on 29 US products worth $230 million in June last year after Washington imposed 25% duty on Indian steel and another 10% on aluminium shipped to the US from India. But it kept postponing in the hope that the two countries would resolve their trade-related issues sooner than later.

The last time India postponed the imposition of a duty on US goods was on May 16 for a month till June 16 as there was a sense that both countries would talk it out after the new government was formed at the Centre.

However, that did not happen and the US went ahead with the withdrawal of GSP benefits on June 1.

It is against this background that India has decided not to defer its decision this time around and go ahead with the retaliatory tariff.

“India accepts the withdrawal of duty-free benefits by the US gracefully,” Commerce and Industry Minister Piyush Goyal had said earlier this month, vowing to make the exports more competitive.

“India is now evolving and coming out of the crutches and withdrawal of GSP is not a matter of life and death for all exporters,” he said.

US Secretary of State Mike Pompeo, who is scheduled to visit New Delhi later this month before hitting Osaka for G20, is expected to have a dialogue on trade issues with an aim to sort out differences.

India-US trade in goods and services rose to $142 billion in 2018, up from $126 billion the previous year.

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