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US says no to unconditional withdrawal of penal tariff on India’s steel, aluminium

Amiti Sen New Delhi | Updated on September 28, 2018

Coming up with export caps may be India’s only option

Ignoring India’s threat of retaliation, the US has formally said no to an unconditional rollback of penal duties on Indian steel and aluminium imports.

It is now insisting that India come up with a counter proposal to resolve the matter.

A team led by Assistant US Trade Representative Mark Linscott held talks on various issues with Commerce Ministry officials here earlier this week. “The visiting officials said that following discussions in Washington it was decided a blanket exemption from higher duties on aluminium and steel cannot be extended to India. If India wants to resolve the matter, it has to come up with a counter proposal of capping its exports of the metals,” an official close to the development told BusinessLine.

Though Washington had been indicating it was not in favour of giving exemptions, New Delhi had been pushing for a complete unconditional rollback.

Limited options

Yesterday, Commerce Secretary Anup Wadhawan said India was not foreclosing any options, including the capping of exports, to resolve the matter with the US, but it now seems to be the only option available to India.

“The problem is not with the Commerce Ministry, which has shown flexibility in its attempt to resolve the matter. It is the Steel Ministry which has been sticking to its initial demand of an unconditional rollback,” the official said, adding that the ministry may now have to soften its stance.

The trouble started in March, when the Donald Trump administration imposed stiff penal tariffs of 25 per cent on steel and 10 per cent on aluminium imported from India, China, the EU, Mexico, Russia and Canada, citing security threats.

New Delhi announced retaliatory tariffs on 29 items from the US in June but delayed implementation to August 4 and subsequently to September 18 and November 2, hoping to resolve the issue amicably.

“It is clear now that the matter will not be resolved till the Steel Ministry comes up with a counter proposal on capping exports. The Commerce Ministry and the Steel Ministry are now expected to hold discussions on what the counter proposal could be,” the official said.

Earlier, the US had reportedly sought capping of exports of steel and aluminium at 70 per cent of the total export value last year. The Steel Ministry had turned down the proposal.

Published on September 27, 2018

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