India is doing last-minute calibrations in the proposed retaliatory duties on imports from the US — of products such as almonds, apples and certain chemicals — to ensure the move has an adequate impact. It hopes to be ready with the final set of duties by Thursday, or the weekend at the latest.
“Although we have notified to the WTO the duties we intend to impose on items imported from the US for wrongly penalising our steel and aluminium, we are still looking at categories we may have left out, and the need to increase rates for some items,” a government official told BusinessLine .
The Department of Revenue is working in top gear, with help from the Commerce Ministry, to finalise the nitty-gritties of the higher duty structure by June 21, the date for imposition of the duties indicated by India to the WTO.
India’s proposed action — which will have a financial impact ranging between $165 million and $241 million for the US — is aimed at neutralising the effect of the additional import duties of 25 per cent and 10 per cent imposed on Indian steel and aluminium respectively by the US citing national security concerns.
In its latest notification at the WTO on retaliatory duties, India proposed a list of 30 items — such as apples, walnuts, almonds, high-end motorcycles (including Harley Davidson), lentils and phosphoric acid — on which duties are likely to be raised by 10-50 per cent.
“We have kept the door open for more changes to the proposed retaliatory duties and would do so if required,” the official added.
Bound rates
India hopes to collect the biggest chunk of retaliatory duty by increasing the rates for almonds, as it imported almonds worth $600 million last year. “Compared to almonds or apples, the duty we will collect by increasing rates for items such as high-end motorbikes will be minuscule,” remarked the official.
As the retaliatory duties could be higher than the bound rates (the ceiling import duties committed to at the WTO), India is free to impose as high a rate on any item.
Agreement on Safeguards
India had sought consultations with the US under the Agreement on Safeguards to persuade it to do away with the duties but Washington refused to participate, saying the duties imposed by it are not ‘safeguard’ ones.
“India then filed a notification at the Council for Trade in Goods on its intention to impose retaliatory import duties on American products by June 21,” the official explained.
However, the US and India are planning a bilateral trade dialogue later this month ( see box ), and some officials in the Commerce Ministry say imposing higher duties now may make the going tricky.
The trade dialogue had been decided on when Commerce Minister Suresh Prabhu met US Trade Representation Robert Lighthizer earlier this month. Since the US remains India’s largest export market with outbound shipments growing 13 per cent to $47.88 billion last fiscal, Delhi is not too keen on antagonising it.