India may defer imposing US tariffs by 45 days
Last-minute trade talks before August 4 deadline have broken down
India may again delay the imposition of retaliatory higher duties on 29 key imports from the US, which were earlier scheduled to take effect from August 4, by one and a half months. The move may be announced despite multiple trade talks with the US failing to resolve the issue so far.
India may again delay the imposition of retaliatory higher duties on 29 key imports from the US, which were earlier scheduled to take effect from August 4, by one and a half months. The move may be announced despite multiple trade talks with the US failing to resolve the issue so far.
Sources said New Delhi wants to give more time to Washington to settle the tariff issue. Sources suggested that the commerce department has requested the revenue department, under the finance ministry, to revert to its earlier order and extend the date for imposing higher import duties by 45 days. A final decision will be taken by the Central Board of Indirect Taxes and Customs, which is legally bound to bring out an official order on the issue by Friday, they added.
Despite announcing a steep tariff hike on US imports last month, India had hoped for a breakthrough in these talks. “After these talks stretched on till the early part of this week, final negotiations between both sides had broken down as Washington DC was not interested in providing exemption to India from its tariffs on steel and aluminium, as we had wanted,” a senior commerce ministry official said.
The August 4 deadline was a delayed one announced on June 28, when the tariffs were expected to be imposed.
Higher tax by up to 50 per cent on agri goods like apples, almonds, walnuts, along with industrial products and steel , had earlier been announced by India, aimed at raking in an estimated $240 million worth of additional taxes. Spread across sectors from which imports stood at $1.5 billion in 2017-18, New Delhi claimed that the amount was equal to the estimated loss faced by India after the Trump administration hiked import duties on steel and aluminium in May. “This increase will be in addition to raising new trade barriers, make domestic manufacturing more attractive as the steep increases in Customs duties may make imports unaffordable. For agri products such as pulses, which have witnessed an increase from 30 per cent to 70 per cent, this would provide encouragement in increasing the cultivable area, on the back of good pulses production in recent years,” M S Mani, indirect tax partner, Deloitte India, said. US aims for market access At the same time, to offset the hit to these mostly agricultural products, the US is eyeing market access for soybean meal and easier norms on its cherries, as it battles the fallout of multiple tariff escalation. The US is the third-largest global producer of soybean meal and is eyeing newer markets as the country faces a significant glut in the supply of soybean itself.