India to impose retaliatory tariffs on 29 U.S. goods from June 16

  1. India has decided to impose the long pending retaliatory tariffs on 29 US products after US had withdrawn Generalized system of preferences (GSP) for Indian exporters.
  2. This action comes a year after the notification for the retaliatory tariffs was issued in 2018 in response to penal duties imposed on Indian aluminium and steel by the US.
  3. The tariffs will place a burden of $220-290 million on the U.S which is similar to the impact on India due to the U.S. tariffs on aluminium and steel imports.
  4. India has since been postponing the implementation of these duties hoping to resolve trade concerns including the withdrawal of the Generalised System of Preferences(GSP) by the US.
  5. GSP is a preferential tariff system extended by developed countries to developing countries.It is a preferential arrangement in the sense that it allows concessional low/zero tariff imports from developing countries.
  6. Further,US and India has issues that needs to be resolved such as (a)India’s Data localisation rules which forced foreign companies to store their data locally (b)Price controls on medical devices(Cardiac stents) (c)Tariff on ICT products (d)Lack of greater market access for the US dairy industry and (e)India’s e-commerce policy.
  7. In 2018, bilateral trade in goods and services between the two countries registered a growth of 12.6% to $142 billion from $126 billion in 2017.

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