Inida has issued a notification which says that new increased tariffs on 28 United States (U.S.)
The Central Board of Indirect Taxes and Customs (CBIC) has issued a notification which says that new increased tariffs on 28 United States (U.S.) goods will come into effect from today, i.e., Sunday, June 16. 2019.
The items impacted by the new tariffs include apples, almonds, pulses, pears, walnuts, lentils and tube and pipe fittings, screws bolts and rivets. Earlier, the list included 29 items, but later India decided to remove artemia, a kind of shrimp, from the list.
The tariff on apples has been increased to 70%. The import duty on walnut has been hiked from 30% to 120%. Duty on chickpeas, Bengal Gram (Chana in Hindi) and Pulses (Masur Dal in Hindi) have been increased from 30% to 70%. The duty on boric acid and binders for foundry moulds has been hiked to 7.5%, while that on domestic reagents will be increased to 10%. The new tariffs are expected to bring in U.S. $ 220 million of revenue to Indian Government.
The notification from CBIC read, “We will implement the imposition of retaliatory duties on 28 specified goods originating in or exported from USA and preserving the existing MFN rate for all these goods for all countries other than USA.”
Side effects of Trumps trade wars
Why India increased the tariffs?
The new tariffs are a retaliatory move by Indian Government in response to 25% tariff on Indian steel and 10% tariff on aluminium, imposed by U.S. in March 2018. Since India is one of the major exporters of these items to the U.S., the move has affected Indian revenue in tune of U.S. $ 240 million.
Subsequent to that, the Government of India decided to impose news tariffs on U.S. goods on June 2018. But the decision got delayed 8 times, owing to ongoing trade talks between India and the U.S.
However, the trade talks fell apart when U.S. announced withdrawal of export incentives to Indian exporters under its Generalised System of Preferences (GSP) programme on June 5, 2019. This impacted Indian goods worth U.S. $ 5.5 billion.
U.S. imposing further sanctions
In addition, the President of U.S. – Donald Trump has also threatened to impose sanctions if India purchases oil from Iran and if it goes ahead with buying S-400 anti-aircraft missiles from Russia.
What happens next?
The U.S. Secretary of States – Mike Pompeo is scheduled to travel to India between June 24-26, 2019. This will be Pompeo’s second visit to India as the U.S. Secretary of State. The trip is aimed at bolstering the bilateral relations between the two nations.
Addressing a gathering at India Ideas Summit of the US-India Business Council, Mike Pompeo has expressed faith in the Prime Minister of India – Narendra Modi, by saying “Modi hai to mumkin hai” (Modi makes it possible). Besides, Modi is expected to meet Trump at the G20 Summit will be held on June 28-29, 2019 at Osaka in Japan.
