Commerce ministry delays tit-for-tat tariffs against US

India had earlier announced plans to slap retaliatory tariffs on 29 products exported from the US to India worth around $241 million after the Trump administration’s ‘wrongful’ application of discriminatory duties on steel and aluminium exports from India.

The commerce ministry is now reported to be planning to ask the revenue department to come up with a notification delaying the duties for some time.

This is the second time India is postponing application of retaliatory tariffs against discriminatory duties announced by the US on 20 June, to be implemented from 4 August.

On 3 August, the revenue department had issued a notification delaying the duties by 45 days. 

Government officials explain the proposed delay was to give trade officials from both sides more time to sort out the issue of higher tariffs of 25 per cent on steel and 10 per cent on aluminium imposed by the US on exports from India. New Delhi wants to avoid getting into a tariff war with Washington to whatever extent possible.

New Delhi has taken up the matter with the WTO, arguing that the higher duties imposed are unfair as India’s exports of these items were much lower than others such as China and South Korea, and it doesn’t pose a security threat to the US.

The higher tariffs on steel and aluminium imports were applied by the US earlier this year on a handful of countries including India, China, Japan, South Korea, Canada, the EU, Turkey and Russia citing security concerns.

A number of countries, including China, the EU, Turkey and Canada, have already imposed retaliatory tariffs against goods imported from the US.

The talks between the commerce ministry officials and the US Trade Representative’s office, however, are nowhere near sorting out the issue of penal tariffs on aluminium and steel.