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India set to lower cartridge duties

March 6, 2019

New Delhi is offering to lower duties in imports of products including printer cartridges, smartphones, and other ICT goods from the USA, in return for greater market access.

In return for the lowering of duties on these products, India, the world’s fastest-growing large economy is seeking greater access for items including engineering goods, farm products, and auto parts, according to The Telegraph.

Recent trade talks between the two nations are apparently “converging towards a solution,” with both countries keen to overcome their respective differences as they aim for greater market access.

India is hoping that its willingness to lower duties on ink cartridges, among other products, will lead to the removal of steel duties from the US, and greater access therefore for the aforementioned products. The US is also currently demanding greater access – via cuts in import duties – for its own agriculture goods, medical devices, and dairy products. In recent weeks, Donald Trump has accused India of being a “high-tariff country,” with retaliatory levies threatened, with overtones reminiscent of the ongoing trade war with China.

In particular, Washington is keen for India to cut the duty on the iconic Harley Davidson motorbikes (which has already halved to 50 percent), while also hoping for a margin of 30 percent on medical equipment. Officials in New Delhi say that the country has offered to cut smartphone duties, although it is still hoping for continuation of duty-free access for Indian products under the GSP, or Generalised System of Preference.

The Telegraph reports that India is “the largest beneficiary nation under the GSP, having exported goods worth $5.6 billion (€4.95 billion) to the US in 2017-18.” The current US administration has reportedly threatened to “slash” the scheme, ending India’s position as a GSP eligible nation.

However, the US has offered to grant India exemption from steel and aluminium tariffs, on the condition that exports are lowered, to the average from the preceding three years. Due to the ongoing talks, India has extended its deadline for imposing high duties on 29 US products, including apples, almonds, and walnuts, as well as industrial products, which was to be a retaliation for the US’ move against India’s steel and aluminium.

The Indian Government claimed that these proposed levies were !equal to the estimated loss faced by India” following the extra 25 percent and 10 percent levies placed by Washington on steel and aluminium respectively.

Officials also revealed that the ongoing discussions between the two parties have twin objectives – increasing short- and medium-term trade, and identifying “long-term trade potential.”

According to The Telegraph, India’s exports to the US in 2017-18 stood at $47.9 billion (€42.3 billion), while imports were $26.7 billion (€23.6 billion),  with “the trade balance in favour of India.”


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