INDO-U.S. TRADE TENSIONS

June 15, 2019

In what could potentially aggravate trade tensions between India and the US, india has decided to impose long-pending retaliatory tariffs on 29 US products. u.s. had withdrawn duty-free benefits for Indian exports under its GSP w.e.f June 5, 2019.

About:

Timeline: Events that led to the decision
- In March 2018, the U.S. imposed 25% tariff on steel and 10% import duty on aluminium. India was one of the major exporters of these items.
- In June 2018, India decided to impose duties in retaliation, but extended the deadline.
- On June 5, 2019, the U.S. withdrew export incentives to India under its Generalised System of Preferences (GSP) programme. India was the largest beneficiary of GSP.
- India now wants to implement its decision to impose retaliatory tariff on 29 U.S. items from June 16, 2019.
Major products to be impacted: Walnut, chickpeas, Bengal gram, masur dal, boric acid, binders for foundry moulds, domestic reagents, apples etc.
Possible impact: The tariffs will place a burden of $220-290 million on the U.S., commensurate to the impact on India due to the U.S. tariffs on aluminium and steel imports.