By now, much has been written on U.S. trade tariffs, the latest being the 10% tariff on Chinese imports amounting to a value of $200 billion. While almost all the countries against whom the U.S. has imposed tariffs have chosen to retaliate and go in for a tit-for-tat policy, India, curiously, has decided to be cautious.
MetalMiner has followed this story over the last few months. As late as August, we reported that for the second time, India deferred imposing a tit-for-tat duty on the import of over two dozen products from India, including certain flat-rolled stainless steel products. It was supposed to come into effect Aug. 8, but now the new date is Sept. 18.
Sept 18’s come & gone, and it is now being reported that the Indian government has postponed its decision yet again.
A report by Live Mint said India would not be imposing a “revenge tax” against 29 American products worth U.S. $235 million to oppose the move by the U.S. to raise import duties on Indian steel and aluminum.
The Live Mint report quoted a “person with knowledge of the development” as saying the two nations were engaged in arriving at a negotiated solution on the issue.
So when’s the next date? Nov. 3.
It was on June 20 that India had said it would raise tariffs on the U.S. products, including fruits worth $10.6 billion imports in retaliation.
So why is India dithering?
Political observers cite many reasons for India’s reluctance. One is that India is headed for a general election soon and the government does not want Indo-U.S. ties to deteriorate because it could then become a poll issue, giving the opposition a handy weapon.
The other could be that both countries were engaged in what’s known as the “2+2” negotiations on many fronts, such as defense, so neither wants to ratchet up the heat. Also, U.S. President Donald Trump’s friendly relationship with his Indian Prime Minister Narendra Modi is well-known.
India has been demanding a waiver on tariff hikes similar to the ones the U.S. granted to Argentina, Brazil and South Korea. There were some unconfirmed reports here that the Trump administration had hinted that it was willing to waive off the tariff hikes on steel and aluminum if India were to cap the exports at 70% of its total exports to the U.S. last year. India, though, does not seem to be keen on doing this, though there’s no official word on it.
India’s exports of steel items to the U.S. went down by 42% in the quarter ending June, mostly because of the sanctions.