Settling a long-pending dispute, the US has agreed to exempt a substantial part of steel and aluminium exports from India from penal tariffs imposed by the Trump regime on national security grounds (US Section 232) in 2018, while India is ready to remove retaliatory tariffs on certain imports from the US including apples, almonds, chickpeas, lentils and walnuts.
The reconciliation on the vexed issue is part of the pact between the two nations to terminate six outstanding disputes at the World Trade Organization which was reached during Prime Minister Narendra Modi’s official visit to the US this week.
“I think this is a very big victory for India. And it is a mutually beneficial agreement for both countries. PM Modi and US President Joe Biden have created a win-win for both,” Goyal said at a press briefing on Friday.
On GSP benefits
On India’s demand for restoration of Generalised System of Preferences benefits, that allows developing nations to export certain identified items duty-free to the US, Goyal said both sides had agreed to discuss it but a final decision on the matter would rest on the US Congress.
The agreement on steel and aluminium would come as a big relief for the Indian industry as the two sectors were saddled with additional import duties of 25 per cent and 10 per cent in 2018 by the Trump regime, citing national security concerns. While the US struck deals with a number of other countries that were also at a receiving end of these duties, it delayed reaching an agreement with India consequently hurting exports from the country.
Explaining the agreement, Goyal said that there were requests by Indian exporters of steel and aluminium to exclude certain products from the high duty list. “The US has given us an assurance that at least 70 per cent of all such requests of steel, and 80 per cent of all such requests for aluminium products originating in India will be excluded from the additional process of Section 232,” he said.
New Delhi has, therefore, agreed to do away with the retaliatory import duties it had imposed on products including chickpeas, lentils, almonds, walnuts, apples, boric acid, and diagnostic reagents. The tariffs were around 20 per cent for items such as apples and walnuts and even higher for some others.
“These tariff cuts will restore and expand market opportunities for US agricultural producers and manufacturers. The resolution also maintains the integrity of the US Section 232 measures,” according to a statement issued by the of the US Trade Representative.
Other disputes, apart from the ones on additional duties on steel and aluminium and India’s retaliatory tariffs, that have been settled between India and the US, include countervailing measures on certain hot-rolled carbon steel flat products from India, certain measures relating to solar cells and modules, measures relating to the renewable energy sector and export-related measures (of India).