India is in favour of an amicable settlement to the issue of increased import tariffs on Indian steel and aluminium by the US as it does not want to indulge in a trade war with the country.
“The issue of raised tariffs on steel and aluminium will be discussed at length at the Indo-US Trade Policy Forum meeting on Tuesday in New Delhi, but we don’t know yet what the US expects in return if it were to withdraw the duty hike. We will approach the matter with an open mind as we do not want a trade war with the country which is an important trade partner,” a government official told BusinessLine .
Last month, the US had imposed a 25 per cent levy on steel and 10 per cent on aluminium on a handful of countries, including India and China, ostensibly to protect US national security and economic interests. The move, however, is being seen as one which is primarily aimed against China.
“If one examines the items in the steel and aluminium category that have been penalised with raised import tariffs, they are largely the ones that China exports. India, on the other hand, exports a small percentage of the penalised aluminium and steel items,” the official said.
India, however, wants the US to revoke the duty hike against the country, as it has already done in the case of the EU, Argentina, Australia, Brazil, South Korea, Canada and Mexico.
“Officials from the Commerce Ministry have had one round of talks with counterparts on a possible roll-back of the increased import duties on aluminium and steel but it remained inconclusive. Hopefully, the matter will see tangible movement in the TPF meeting,” the official said.
The US team participating in the Trade Policy Forum meeting will be led by Assistant US Trade Representative Mark Linscott. Other issues to be taken up by India at the meeting include concerns on increasing crackdown on H1-B visas by the US and restrictions for mango, grapes and pomegranate exports.
US demand
There is, however, no clarity over what the US might demand in return for roll-back of the duty hike on steel and aluminium. “The US has already been making a case for increased market access for dairy products, poultry, other agricultural items and motorbikes as part of its demand that the trade deficit that it suffers against India be bridged. We don’t know whether these demands would be repeated,” the official said.
India has worked towards providing more market access to the US by reducing import duties on items such as motorbikes, including Harley Davidson, but the Trump regime wants more.
India’s imports from the US in the April-February 2017-18 period were at $23.34 billion which was 14.68 per cent higher than imports in the comparable period of the previous fiscal. The country’s exports to the US during the period were at $43.32 billion, 13.34 per cent higher than exports in the same period of the last fiscal.