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India rejects US claims of imposing 'tremendously high' tariffs on its goods

"We do not agree with that at all. Our tariffs (import duties) are very consistent with the bound rates that we are entitled to in the WTO," Commerce Secretary Anup Wadhawan told reporters here.

India TV Business Desk India TV Business Desk
New Delhi Published on: March 05, 2019 15:38 IST
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India rejects US claims of imposing 'tremendously high' tariffs on its goods 

Rejecting US claims of imposing "tremendously high" tariffs, India on Tuesday said its import duties are not high and are within the norms of the World Trade Organisation (WTO).

"We do not agree with that at all. Our tariffs (import duties) are very consistent with the bound rates that we are entitled to in the WTO," Commerce Secretary Anup Wadhawan told reporters here.

"Our tariffs are very comparable to more liberal developing economies and some developed economies," he added.

He said India's tariffs are within its bound rates under the WTO commitments, and on the average are well below those rates.

Duties which are imposed on imported goods are called applied rates and the extent to which a country can increase those duties are known as bound rates.

India’s trade-weighted average tariffs are 7.6 per cent, which is comparable with the most open developing economies, and some developed economies.

Also read | Donald Trump plans to end India's preferential trade treatment

The commerce ministry, in a statement, said on developmental considerations, there may be a few tariff peaks, which is true for almost all economies.

US President Donald Trump had claimed that India is a "tariff king" and imposes "tremendously high" tariffs on American products like Harley Davidson motorcycles.

The bilateral trade has increased to USD 74.5 billion in 2017-18 from USD 64.5 billion in 2016-17. India has a trade surplus with the US. America has also raised this issue.

The ministry also said due to various initiatives resulting in enhanced purchase of US goods like oil and natural gas and coal, the US trade deficit with India has substantially reduced in 2017 and 2018.

"The reduction is estimated to be over USD 4 billion in 2018, with further reduction expected in future years on account of factors like the growing demand for energy and civilian aircraft in India," it said.

This reduction, it added, has happened in the face of a rising overall US trade deficit, including with some other major economies.

"India is also a thriving market for US services and e-commerce companies like Amazon, Uber, Google and Facebook with billions of dollars of revenue," it said. 

Wadhawan further said that the US government's move to withdraw duty concessions on certain products under the Generalized System of Preferences (GSP) programme will not have a significant impact on exports to America as the benefits were only about USD 190 million annually.

HE said despite the fact that India was working on an "extensive and reasonable" trade package, the US has decided to go ahead with its decision to scrap the preferential trade benefit after 60 days.

The package was covering all concerns related to bilateral trade with the US on sectors including medical devices, dairy products and agricultural goods, he said adding that India could not negotiate issues concerning interests of public healthcare.

India exported goods worth USD 5.6 billion under GSP last year, but "our total GSP benefits were to the tune of only USD 190 million, the secretary told reporters in New Delhi. 

He said "the benefits in absolute sense and a percentage of trade involved are very minimal and moderate".

GSP benefits are envisaged as non-reciprocal and non-discriminatory to be extended by developed countries to developing economies, Wadhawan said.

Elaborating the demands of the US on medical devices and dairy products, he said India is willing to find a reasonable solution but that has to balance with the country's non-negotiable public health concerns and requirements.

On dairy sector, "given our religious and cultural concerns, we have a requirement that there should be a certificate that source of the dairy product should have never been fed animal derived feed. So that again is a non-negotiable for us", he said adding that India could have simplified procedures for importing these two products "without compromising the basic requirements".

"Both these issues (medical devices and dairy) have aspects that are non-negotiable. Like in medical devices, we will not compromise on the affordability and needs of public health," Wadhawan said.

Commenting on the GSP developments, the Federation of Indian Export Organisations (FIEO) said that withdrawal of benefits would not have a major impact of India's exports to the US. "The GSP benefits ranged between one to 6 per cent".

The US Trade Representative's Office has said that removing India from the GSP programme would not take effect for at least 60 days after notifications to Congress and the Indian government, and it will be enacted by a presidential proclamation.

As many as 3,700 products get GSP benefits but India export only 1,900 items such as chemicals and engineering under that concession which was introduced in 1976 by America. 

(With inputs from PTI)

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