Incensed by Washington’s refusal to exempt it from new tariffs, India has hiked duty on 29 products, including pulses and iron and steel products, imported from the US. The decision is seen as a retaliatory action against the tariff increase by Trump administration.

The duty hike would come into effect immediately for 28 products, while for artemia, a kind of shrimp, the rate hike would be effective from August 4, the finance ministry said in a notification. A duty of 120 per cent on imports of walnuts is the strongest action yet against the United States.

India is by far the largest buyer of US almonds, purchasing over half of all US almond shipments in 2017. A kilogram of shelled almonds will attract duty of Rs 120 ($1.76) instead of the current Rs 100.

As per the finance ministry notification, the import duty on chickpeas, Bengal gram (chana) and masur dal has been increased to 70 per cent from 30 per cent earlier, while that on lentils has been hiked to 40 per cent from 30 per cent.

Last month, New Delhi had sought an exemption from new US tariffs, saying its steel and aluminium exports were small in relation to other suppliers. But its request was ignored, prompting India to launch a complaint against the United States at the World Trade Organisation.

“India’s tariff retaliation is within the discipline of trade tariffs of the World Trade Organisation,” said steel ministry official said.

Trade differences between India and the United States have been rising since US president Donald Trump took office. Bilateral trade rose to $115 billion in 2016, but the Trump administration wants to reduce its $31 billion deficit with India, and is pressing New Delhi to ease trade barriers.
Earlier this year, Trump called out India for its duties on Harley-Davidson motorbikes, and India agreed to cut the import duty to 50 per cent from 75 per cent for the high-end bikes.

But Trump wanted more, who pointed to zero duties for Indian bikes sold in the United States and said he would push for a now famous “reciprocal tax” against countries, including US allies, that levy tariffs on American products.

Deloitte India partner MS Mani said that on several products such as pulses the increase is very steep (30 per cent to 70 per cent), while for iron and steel products, the increase is at least 50 per cent of the existing rate (from 15 to upwards of 22.5 per cent).

“The increase in the customs duties on goods originating from the USA was expected, but the magnitude of the increases would have been unexpected. These increases would make the domestic products cheaper compared to imports and lead to domestic manufacturing/demand pick-ups as a corollary,” Mani said.