India defers tariffs on US imports, get steel duty waiver

6th Aug 2018

The Union Ministry of Commerce is looking at delaying the implementation of reciprocal tariffs on US imports to accommodate the later and pave the way for a congenial 2+2 bilateral dialogue in September and for exemption from US tariff on Indian steel and aluminium.

A reliable source told DNA Money that Washington had requested New Delhi to defer the implementation of the retaliatory tariffs for further negotiations on whether India could be excluded from the US tariff on aluminium and steel.

He said Washington was seriously considering India’s request for an exemption from the restrictive tariffs on the two metals. Australia, South Korea, countries in Latin America and others already enjoy duty waiver on their steel and aluminium exports to the US.

The retaliatory duties of $241 million on 29 US imports, notified in June, were to come into force from Saturday.

“The commerce minister is inclined to defer it (date of implementation of retaliatory tariff). It will also help in moving towards a more congenial atmosphere for the (2+2) meeting,” said the source on condition of anonymity.

India’s countermove to US’s decision to levy 25% and 10% duty on Indian steel and aluminium respectively almost derailed the proposed 2+2 discussions between the two countries when US cancelled it. It is now expected to the held next month.

Ajay Sahai, director general and CEO, Federation of Indian Export Organisations (FIEO), said it was a pragmatic move by India to smoothen the path for further negotiations with one of its biggest trade partners.

“It is a pragmatic move (by India) because US is our major buyer. We may not get much from imposition of duty if we simply escalate the dispute. If we can sit down with them (US) and try to get exemption from aluminium and steel tariff, it will be good for the country,” he said.

Sahai said India’s steel and aluminium exports to the US was close $2 billion.

He said India could continue negotiating on the reciprocal tariff even as it prepares for discussions on wide-ranging topics at the 2+2 meeting between the counterparts in the ministry of external affairs and defence ministry of the countries.

“The 2+2 discussions will be quite comprehensive, but it will not include this issue. Unless we have resolved this issue by that time, it may not figure in the 2+2 dialogue,” he said.

Quid pro quo

• Washington was seriously considering India’s request for an exemption from the restrictive tariffs on aluminium and steel
• The retaliatory duties of $241 million on 29 US imports, notified in June, were to come into force from Saturday

Source: DNA