India to reopen its markets for eight US products; retaliatory customs duties to go

India eliminates additional tariffs on several American goods, such as chickpeas, lentils, and apples. These tariffs were initially imposed in 2019 in response to the United States' decision to raise tariffs on certain steel and aluminum items.

India reopens its markets for eight US products; retaliatory customs duties to go

Team Newsable

First Published Jun 25, 2023, 8:07 PM IST | Last Updated Jun 25, 2023, 8:10 PM IST

Following recent discussions held during Prime Minister Narendra Modi's state visit to the United States, India has decided to remove additional duties on a variety of American products, including chickpeas, lentils, and apples. These duties were initially imposed in 2019 as a response to the US increasing tariffs on specific steel and aluminium products.

The two countries have agreed to resolve six World Trade Organization (WTO) disputes and eliminate these retaliatory tariffs. The US imposed import duties of 25 per cent on steel products and 10 per cent on certain aluminium products in 2018, citing national security concerns.

In retaliation, India implemented customs duties on 28 American goods in June 2019. However, with this recent agreement, the additional duties on these eight US products will be lifted, and the tariffs will revert to the currently applied most-favoured-nation (MFN) rates after India notifies of the change. The process of removing the duties is expected to be completed within 90 days.

Under the terms of the agreement, India will eliminate the additional duty on various items, including chickpeas (10 per cent), lentils (20 per cent), fresh or dried almonds (Rs 7 per kg), shelled almonds (Rs 20 per kg), walnuts (20 per cent), fresh apples (20 per cent), boric acid (20 per cent), and diagnostic reagents (20 per cent).

This move has been welcomed by US lawmakers and industry leaders, as it will reopen the Indian market for American apple growers, restoring access to a market valued at around USD 120 million.

The United States is India's largest trading partner, with bilateral goods trade reaching USD 128.8 billion in 2022-23, up from USD 119.5 billion in 2021-22. This decision to remove retaliatory tariffs signifies a positive step towards strengthening trade relations between the two nations, benefiting various sectors and promoting economic cooperation.

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