Rama Krishna Sangem
India is readying to cut import tariffs on some goods, to satisfy the new US president Donald Trump. One of items on the list could be import duty on Harley Davidson super bikes. A wing in the Prime Minister Narendra Modi’s office (PMO) is on the job. The top bureaucrats of finance and commerce ministry are figuring out a list of items that can see customs duty cuts.
They are preparing fresh policy briefs, especially on trade and investment, following the election of Donald Trump as the next US president, as per a story in Economic Times daily. During his campaign, Trump had threatened to impose tariffs on imports to protect US jobs.
The Indian government officials are preparing fresh policy briefs, especially on trade and investment, following the election of Donald Trump as the next US president, two officials told ET. During his campaign, Trump had threatened to impose tariffs on imports to protect US jobs.
Trump has described India a “tariff king,” and during his latest poll campaign, called it a “very big (trade) abuser”, while maintaining his strident criticism of China’s trade policies.
Fresh deal with the US
A deal involving concessional tariffs between India and the US on a number of products, which was being hammered out under the first Trump term, wasn’t pursued by the Biden administration. The prospect of a fresh trade deal is now brighter, said experts.
In 2017, the commerce ministry had prepared a note for the embassy to sensitise the US administration after Trump had claimed Harley Davidson was paying 100% duty on motorcycles it was exporting to India. The ministry’s note had highlighted that Harley, which had a plant in India at the time, used to import components in pre-assembled form and these were subject to just 10% duty.
The idea is that if India doesn’t keep all the relevant facts before the new US regime, vested interests may always try to feed their own agenda, which may not be in India’s interests,” another official said.
India’s duties remain well below limits allowed under the World Trade Organization (WTO) framework. The average tariff applied by India stood at 17% in 2023, below the average bound rate-or the permissible limit-of 50.8%, according to the latest WTO data.
India’s average tariff just 12 pc
The country’s trade-weighted average tariff is even lower, at 12%. This shows India has been restrained in hiking tariffs, despite “some rationalisations” in the past decade, said one of them. In his first term, Trump had slapped additional duties on steel and aluminum from a number of countries, including India and China.
He had also pushed India to ramp up imports from the US, including farm products. The two countries had also approached the WTO to settle disputes. The US is currently India’s largest export destination. India had a trade surplus of over $24 billion with the US between January and August this year. It’s also the third-largest foreign direct inve ..
India wants to get closer to Trump administration by fulfilling some of its policy priorities like Make America Great Again slogan etc. Some temporary and small sacrifices are necessary for some bigger and long term benefits, Indian officials feel.
