US apples, almonds to be costlier, but India’s tariff strike spares Harley bikes

In retaliatory strikes on the Donald Trump administration, India on Thursday hiked import tariffs on over two dozen US goods. However, this list excludes the contentious Harley-Davidson Motorcycles.

The decision to hike duties on US goods comes after the Trump administration’s decision to unilaterally raise import levies on certain steel and aluminium products earlier this year, which had a tariff implication of ₹241 million on India. India’s latest measures will have an equal impact on the US.

The Finance Ministry issued two notifications on Wednesday, spelling out the new tariff structure. Normally, any change to indirect taxes such as import duty (also known as Customs duty) comes into effect from the date of the notification. However, in this case, it will apply from August 4.

A senior tax official told BusinessLine that the date for imposing the duty had been announced in advance so that “there is room for negotiation, if required”.

However, the nearly 45-day gap between the announcement and the implementation of the tariff structure has stoked concerns that importers may buy products at lower duty, hoard, and then sell at the higher rates effective after August 4. However, experts rule out such a situation as it would involve a higher working capital requirement.

Bipin Spara, Partner, EY, said the government notification is primarily for the removal of Customs duty benefits for certain goods originating in the US. “These may become part of the ongoing trade negotiations with the US and the time gap appears to be a reasonable for the conclusion of these discussions.” Anita Rastogi, Partner, PwC, feels that effecting the duties at a later date advantages businesses.

The notification includes 29 products: walnuts, almonds, pulses, apples and non-iron among others. Shelled almonds imported from the US will now attract import duty at ₹120/kg, as against ₹100/kg earlier.

Almonds in shell will attract import duty at ₹42 per kg (up from ₹35/kg). The levy on walnuts in shell will be 120 per cent, against 30 per cent earlier; apples will attract 75 per cent import duty, up from 50 per cent.

Among pulses, the duty on chickpeas, Bengal gram (chana) and masur dal has been raised to 70 per cent from 30 per cent, while that on lentils has been hiked to 40 per cent from 30 per cent. Duty on flat-rolled iron products has been raised to 27.50 per cent, from 15 per cent, while certain flat-rolled stainless steel products will now attract 22.50 per cent duty against 15 per cent earlier. Duty on artemia, a kind of shrimp, has been raised to 30 per cent.

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