Regular Update
ATM News Network : In a significant trade development, India has decided to remove import duties on American apples, effectively reopening its doors to over 1,400 Washington apple growers. This decision follows a recent trade agreement between the United States and India, which also entails the removal of retaliatory tariffs on several other US products.
The Background: This move comes in response to a trade dispute that began in 2018 when the United States imposed a 25 percent import duty on steel products and a 10 percent duty on specific aluminium products, citing national security concerns. In retaliation, India imposed customs duties on 28 American products in June 2019.
India's Tariff Reversal: As part of the newly established trade agreement, India will be lifting import duties on various US products, including chickpeas, lentils, almonds (fresh or dried), almonds (shelled), walnuts, boric acid, and Diagnostic Regents, in addition to apples. The import duty rates on these goods, which ranged from 10 to 20 percent, will revert to the current applied most-favoured-nation (MFN) rates.
Backlash from opposition and Farmers
Opposition leaders opposed the Central government’s recent move to lower import duty on American apples.
Congress leader Priyanka Gandhi Vadra, while visiting heavy rains-affected Himachal Pradesh recently, said: “This will make the import of American apples easy, and they will be sold more readily. Prices of apple procurement in Shimla have been reduced by prominent industrialists. When local apple growers are already suffering, the question arises – who should receive assistance, the farmers here or those in the US?”
Farmers' associations have reacted sharply to the reduction of import duties on American almonds, apples, walnuts and lentils, ahead of US President Joe Biden’s visit for the G20 summit in New Delhi. As per the Finance Ministry circular, import duty on masur dal has been exempted. Earlier, it was levied at 20%. Similarly, import duties on Washington apples have been reduced from 35%to 15%.
Clarification from Government
The Ministry of Commerce and Industry said that the removal of additional duties will not be detrimental to domestic producers of apples, walnuts and almonds.
Rather, it will result in fair competition in the premium market segment of these products, thereby ensuring better quality at competitive prices for Indian consumers, the ministry said.
Union Commerce Minister Piyush Goyal said India and the US made the decision to remove the additional duties on US apples and walnuts as both countries removed tariffs imposed on their respective products.
Positive Response from US Lawmakers and Industry Leaders:
US lawmakers and industry leaders have warmly welcomed India's decision to end these tariffs. Washington's apple growers, in particular, are poised to benefit significantly, as the removal of retaliatory tariffs opens the door to a lucrative market worth an estimated USD 120 million.
