India to impose retaliatory tariffs on 29 US products
1) India has repeatedly postponed imposing the retaliatory tariffs on US goods worth $235 million since it first announced them on 20 June last year.
2)India’s move comes ahead of the meeting between President Donald Trump and PM Narendra Modi on the sidelines of the G20 meet on 28-29 June at Osaka, Japan.
In what could potentially aggravate trade tension between India and the US, India has decided to impose the long pending retaliatory tariffs on 29 US products after Washington last week withdrew duty-free benefits for Indian exporters.
“The matter will be notified by the finance ministry tonight or tomorrow, before the Sunday deadline," a government official with knowledge of the matter said. India has repeatedly postponed imposing the retaliatory tariffs on US goods worth $235 million since it first announced these on 20 June last year. The current deadline expires on 16 June.
India’s move comes ahead of the meeting between US President Donald Trump and Indian Prime Minister Narendra Modi at the sidelines of the G20 meeting on 28-29 June at Osaka, Japan. Ahead of the meeting, US Secretary of State
Mike Pompeo is scheduled to visit New Delhi on 25-26 June on his way to the G20 Summit to have bilateral discussion with his Indian counterpart S. Jaishankar.
Speaking at the 44th annual meeting of the US-India Business Council in Washington DC on Wednesday, Pompeo said they may discuss “tough topics" including the recent decision on the GSP programme. “But as we democracies have come to know, that we work out our disagreements. We bring them to the table honestly and fairly. And we’ll probably discuss the recent decision on the GSP program. I do hope, and remain open – and we remain open to dialogue, and hope that our friends in India will drop their trade barriers and trust in the competitiveness of their own companies, their own businesses, their own people, and private sector companies," he added.
India's Commerce Minister
Piyush Goyal on Thursday said India accepts the decision of the US to withdraw duty-free benefits to its exporters gracefully and will work towards making the exports competitive.
Briefing reporters after the meeting with exporters and state government representatives, Goyal said withdrawal of Generalized Systems of Preference (GSP) is not a matter of life and death for all exporters. "India is now evolving and moving out of the crutches that we thought we needed to export. India is no more an underdeveloped or least developed country that we will look at that kind of support. We believe we can be export competitive at our own strength or at the strength of our own comparative advantage," he said.
When asked whether India will impose the retaliatory tariffs against the US, Goyal said, "You will get to know when the time comes."
The US in March announced its decision to withdraw preferential duty benefits — Generalised System of Preferences (GSP) — to India after talks between the two sides broke down on 'disproportionate' demands by Washington. However, the US deferred implementing the GSP withdrawal given the general elections in India. This had raised hopes that the two sides may engage again to resolve the differences after the Modi government took charge.
However, on 1 June, US President Donald Trump surprised everybody by issuing the presidential proclamation and
withdrawing GSP benefits given to India.
“I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019," Trump said in his proclamation.
Several members of the US Congress and US manufacturers had urged Trump not to withdraw GSP benefits available to India since New Delhi is a strategic ally and the move will increase input costs for American producers.
Indian government in a statement termed the move unfortunate and vowed to protect the country’s interest. “It is unfortunate that this did not find acceptance by the US. India, like the US and other nations, shall always uphold its national interest in these matters. We have significant development imperatives and concerns and our people also aspire for better standards of living. This will remain the guiding factor in the government’s approach," it said.
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