Trade minister Suresh Prabhu.  (Pradeep Gaur/Mint)
Trade minister Suresh Prabhu. (Pradeep Gaur/Mint)

India unlikely to implement tit-for-tat tariff hikes against the US on 1 April

  • India is unlikely to impose the long pending retaliatory tariffs against the unilateral steel and aluminium duty hikes by the Trump administration
  • India is likely to opt for the safe option of yet again extending the deadline by another month

New Delhi: Despite the US withdrawing zero duty benefits on India’s exports worth $5.6 billion, India is unlikely to impose the long pending retaliatory tariffs against the unilateral steel and aluminium duty hikes by the Donald Trump administration. India is likely to opt for the safe option of yet again extending the deadline by another month after the current deadline expires on 31 March.

“Allowing the notification for retaliatory tariffs to lapse at this time will send a wrong signal and will show Indian government in poor light. Hence, the deadline for its implementation may be further extended. A final decision will be taken by the Prime Minister’s Office," a commerce ministry official said speaking under condition of anonymity.

India on 20 June notified that it will raise tariffs on 29 US products, including almonds, apples and phosphoric acid worth $235 million in retaliation to the unilateral steel and aluminium duty hikes by the US. India did not impose the tariffs immediately, unlike other major trading partners of the US as the two countries were engaged in bilateral negotiations to finalize a trade package to douse tensions. However, on 4 March, the US announced that it is withdrawing GSP (Generalized System of Preferences) benefits to Indian exporters signaling that the talks for a trade package have failed. The higher tariffs on Indian goods after withdrawal of GSP benefits will come into effect in early May—60 days after the date of announcement.

Another commerce ministry official said the ministry was keen that the prime minister write a letter to US president Trump requesting to extend the 60 day deadline by another 60 days to allow a new government at the Centre to revive negotiations for a trade package. “However, prime minister was unwilling given the ongoing electoral process. He has asked trade minister Suresh Prabhu instead to write a letter to his US counterpart conveying the same message," the official added.

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