India hits US with import duty hikes

New Delhi: India has hit back at US President Donald Trump’s protectionist policies, hiking customs duty on 29 products, including farm products, steel and iron, which are imported from America. This retaliatory action is in response to the US move to raise tariffs on steel and aluminium products earlier this year, which had an tariff impact of $241 million on India. Sources said the duty hike by India would have equivalent tariff implications for the United States.

India has said the duty imposed by the US had affected steel exports by $198.6 million and aluminium shipments by $42.4 million. India’s decision to hike duties comes a day after the European Union said it would charge higher import duties on a range of US products. Earlier, China too had raised duties on products imported from the US.

These moves by various countries threaten to unleash a global trade war, that could hit world economic growth.

Interestingly, according to the list India submitted to the WTO, it had proposed to hike customs duty on specified motorcycles, that primarily include Harley Davidsons and Triumphs, to 50 per cent. However, the notification does not mention any duty hike on motorcycles with a engine capacity of over 800cc.

In February, India had slashed customs duties on imported high-end motorcycles like Harley Davidsons to 50 per cent, but the move had failed to please Mr Trump, who had wanted it to be slashed to zero.

The government notification states that the duty hike will come into effect immediately for 28 products, while for artemia, a kind of shrimp, the hike would be effective from August 4. It said the import duty on chickpeas, Bengal gram (chana) and masur dal had been increased to 70 per cent from 30 per cent, while that on lentils has been hiked to 40 per cent from 30 per cent.

Shelled almonds imported from the US will now attract import duty at Rs 120 per kg as against Rs 100 per kg earlier. Almonds in shell will attract import duty at the rate of Rs 42/kg as against Rs 35/kg earlier.

The import of walnuts in shell will attract customs duty at the rate of 120 per cent as against 30 per cent earlier. Apples will attract import duty of 75 per cent as against 50 per cent earlier.

The duty on boric acid has been hiked to 17.5 per cent, while that on phosphoric acid has been raised to 20 per cent from 10 per cent earlier. The import duty on diagnostic reagents has been doubled to 20 per cent, while binders for foundry moulds has been hiked to 17.5 per cent.

Flat-rolled products on iron has been raised to 27.5 per cent from 15 per cent earlier, while certain flat-rolled products on stainless steel would now attract 22.5 per cent duty, as against 15 per cent earlier.

Last month, India filed a complaint at the World Trade Organisation against the US over steel and aluminium duties after it failed to win an exemption. India exports steel and aluminium products worth about $1.5 billion to the US every year. India’s exports to the US in 2016-17 stood at $42.21 billion, while imports stood at $22.3 billion.