India’s Retaliatory Tariffs On US
Why is it in News?
The Commerce Ministry revealed on 14th June, that India has decided to slap retaliatory tariffs on 29 goods imported from the U.S. from June 16 onwards.
Background of the Issue:
- Following US’ actions to impose duty on export of steel and aluminium products India decided to impose retaliatory tariffs in June 2018. However, the proposal was delayed every time the deadline approached and India had been repeatedly asking for exemption from these higher tariffs through negotiations, but to no avail.
- Also recently US withdrew the Generalised System of Preferences (GSP) benefits provided to India following which India has now decided to impose retaliatory tariffs on US products.
- The proposed tariffs will place a burden of $220-290 million on the U.S., which is about the same amount imposed by Washington on India in 2018.
- The imposition of increased import tariffs on US agricultural commodities will help domestic farmers.
Generalised System of Preferenes (GSP):
- GSP provide opportunities for many of the world’s poorest countries to use trade to grow their economies and climb out of poverty.
- GSP is the largest and oldest U.S. trade preference program established by the Trade Act of 1974.
- GSP promotes economic development by eliminating duties on thousands of products when imported from one of 120 designated beneficiary countries and territories.
- India has been the largest beneficiary of the GSP program but it has been removed from this program since June 2019.
Source : The Hindu, 14th June 2019