India’s tariff hike on the United States  

On June 20, 2018 India proposed a retaliatory tariff on certain goods imported in significant proportion from the U.S. The decision was reached in response to the increased tariff on steel and aluminum imposed by the U.S. in March to protect its national security. According to the notification released on August 3, 2018 by India’s Ministry of Finance (Department of Revenue), the increased tariff which was to come into effect on August 4, 2018 will now come into force on September 18, 2018.

On June 14, 2018 India informed the World Trade Organization (WTO) that it would impose additional duty on 30 commodities imported from the U.S. In the revised notification submitted to the WTO Council for Trade in Goods, India argued that the suspension of concessions or other obligations on these commodities was on par to the losses India would incur due to the safeguard measures adopted by the U.S. earlier this year.

By implementing this measure India would breach the WTO mandated bound tariff rates, the rate which is applied to all the WTO member states under the most favored nation scheme.

The goods which would bear the brunt of additional duties range from agriculture products to metal items. The import duty for chickpeas and lentils has been increased to 70% and 40% respectively; while for walnuts and fresh apples it has been raised to 120% and 75%. Import duty for almonds has been hiked to ₹120/kg. India imported $580 million worth of U.S. almonds in 2017, thereby making it one of the largest markets for U.S. almonds. The import duty on Artemia, a type of shrimp, has been hiked to 30%.

Apart from agriculture products, other items that are likely to get costlier for Indian importers are boric acid and binders for foundry molds, which would attract an import duty of 17.5%. Diagnostics reagents would be levied with 20% import duty. Additionally, articles of iron and steel such as flat-rolled products, tube and pipe fittings, screw, bolts, nuts, and cast articles would draw an increased import duty of 15% after the implementation of the decision.

The total value of imports for these items amounted to $1.5 billion in 2017.

 

India’s tariff hike on China

In yet another move to save the domestic market from surging textile imports, India almost doubled the import duty on most textile products. The notification – issued by India’s Ministry of Finance (Department of Revenue) dated August 7, 2018 – sought to increase the ad-valorem component of basic customs duty (BCD) from 10% to 20% on 328 tariff lines of carpets, textile floor covering, apparel, and other related garments.

India, the largest producer of cotton in the world, imported textile goods worth $7 billion in the 2017-18 fiscal year, 40% of which was imported from China alone.

For more on India’s tariff hike, visit The Economic Times and The Indian Express.