India retaliates by increasing tariffs on 29 US products to 50 percent

The Government of India finally has decided to increase tariffs on 29 high value US agricultural and industrial imports by up to 50 percent, which will come into effect from the 16th of June.

The tariffs were originally supposed to come into effect on the 4th of August last year, however the tariffs were deferred eight times. Now as a part of “retaliatory measure” against the Trump administration, the Indian Government has decided to go ahead with the tariff hike. However, the Indian Customs authorities officially have not yet termed it as such.

The move comes after Washington DC paid no heed to New Delhi’s request to exempt India from the higher tariffs announced by the US on steel imports by 25 percent and aluminium imports by 10 percent. The Commerce Department has informed the finance and external affairs ministries of the move and an official notification will be issued by Saturday.

Washington DC has been apprised of the move, which is expected to rake in about US$ 235 million.

The list of products considered for duty increase has 18 iron and steel items, which is seemingly a reply to US President Donald Trump’s tariff hikes in the sector. However, the government had dropped “motorcycles above 800cc” from the list. Despite India importing bikes worth only about $10 million in the category in 2017-18.

The US President Donald Trump time and again has used a company (Harley Davidson) manufacturing such motorcycles as an instrument to attack India on market access issues.

This tariff hike will increase the costs of agricultural commodities such as apples and almonds. The US is the largest exporter to India of both items and US exporters of chickpeas, lentils, walnuts, and artemia may find contracts getting cancelled owing to higher import duties on these products.

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