India might finally go ahead to impose retaliatory import tariffs against some US goods, sources said on Friday.
According to sources, the long overdue retaliatory move, which was first proposed last year, will consist of tariffs on 29 US items and this can come in effect from as soon as next week.
Industry estimates have pegged $290 million worth of additional burden on US items exported to India. Speculations are that the 29 items imported from the US including walnuts, lentils, boric acid and diagnostic reagents among others, will face higher duties, thereby cutting benefits to US exporters.
Last year, the US imposed duties on steel and aluminum from India and more recently, the Trump administration ended the preferential treatment given to various goods supplied from India. The withdrawal of the generalized system of preferences or GSP benefits came into effect from June 5. These non-reciprocal and non-discriminatory export benefits are extended by developed countries to developing countries.
Last year, India’s trade surplus for merchandise goods with US was almost $18-19 billion.
“India might counter the US decision to withdraw GSP on its exports by imposing retaliatory tariffs. If the Indian government goes ahead with retaliatory tariffs… (the US goods) will face higher duties, cutting benefits to US exporters,” said Trade Promotion Council of India Chairman Mohit Singla.
According to Singla, a large difference between India’s actual average tariffs and its MFN (most favored nation) trade-weighted applied average tariffs arises primarily because of the several exemptions and concessions that the country provides on its MFN tariffs.