New Delhi: India and the US have agreed to set up a joint monitoring mechanism to enable domestic exports of at least 3.36 lakh tonnes of certain steel and aluminium products in a year to America without paying extra duties, an official said Tuesday.
Indian exports of these products were attracting additional duties in the US as Washington, in 2018, imposed a 25 per cent import duty on steel products and 10 per cent on certain aluminium products on grounds of national security.
In retaliation, India in June 2019 imposed additional customs duties on 28 American products.
The US is allowing these imports from India without paying the extra 25 per cent and 10 per cent duties in return for New Delhi’s decision to remove retaliatory duties on eight American products like apple and walnut.
Additional Secretary of the commerce ministry Peeyush Kumar said that officials will meet twice a year to review the arrangements.
“We will have a biennial meeting…We have requested steel and mines ministries to designate an officer from their side who will be talking to stakeholders and exporters that applications are being properly processed,” Kumar told reporters here.
If Indian exporters would face any bottleneck or problem, it would be conveyed to the commerce ministry and will be taken up with the US during the meetings of the joint monitoring mechanism (JMM), he added.
As a goodwill gesture, the US started approving applications for the import of these items from January this year because the two countries were talking about mutually ending the trade disputes at the World Trade Organisation (WTO).
“On the exclusion part, applications of minimum 3.36 lakh tonnes of steel and aluminium per year will be permitted…This is the minimum quantity, they can approve more also… The US allowed imports from some tested players,” he said.
During the visit of Prime Minister Narendra Modi in June, the two countries decided to remove trade irritants and as part of that, both sides agreed to end six trade disputes at the WTO.
They have mutually resolved those seven disputes and India has decided to remove additional duties on eight US products, including chickpeas, lentils and apples, which were imposed in 2019.
The US, on its part, has agreed to provide greater market access to certain Indian steel and aluminium products, a development which would help increase outbound shipments of these goods. The US has agreed to grant market access to steel and aluminium products under the exclusion process of Section 232 of the Trade Expansion Act 1962.
This market access will restore opportunities for Indian steel and aluminium exporters, which were restricted since June 14, 2018, because of the US 232 measure under which additional duties were levied on steel and aluminium products respectively.
The commerce ministry had earlier said that the move would provide significant impetus to raise India’s steel and aluminium exports by about 35 per cent.
These applications will be made under the exclusion process of Section 232 by the importers on behalf of the exporters.
The US had imposed these duties using Section 232 of an act that permits the president to restrict imports.
The additional tariffs had impacted $ 1.21 billion worth of India’s exports of steel and aluminium to the US in 2018. The duty burden on exports due to additional US tariffs amounted to $ 241 million.
The US had settled a similar dispute with Canada and Mexico at the end of 2019. While steel and aluminium imports from these countries got exemption from the extra tariffs, called Section 232 tariff, the agreement provided for aggressive monitoring and a mechanism to prevent surges in imports of steel and aluminium.
Further talking about removal of an additional 20 per cent duty on US apples and walnuts, the additional secretary said that the move would not impact local players.
The government has sufficient policy space to support growers if there is any implication of the move.
Kumar said that only the additional duty has been removed and the basic duty of 50 per cent will continue besides the minimum import on apples.
Import of apples from the US decreased sharply from $ 145 million (127,908 tonnes) in 2018-19 to only $ 5.27 million (4,486 tonnes) in 2022-23.
It indicates that the market share of the US apples was taken by other countries due to imposition of additional retaliatory duty on American apples, as the imports from countries other than the US increased from $ 160 million in 2018-19 to $ 290 million in 2022-23.
The US’s import share in the import market segment was taken by countries like Turkey, Chile, New Zealand and Italy.
Imports of walnuts dipped to 3,806 tonnes in 2022 from 8,663 tonnes in 2019.
Meanwhile, the opposition Congress Tuesday criticised the government’s decision to reduce import duty on apples.
The centre has also reduced the import duty on the Washington apple, which will also directly affect the horticulturalists of the State, thereby causing losses to them, the Congress said.
National Conference leader Omar Abdullah Monday appealed to the Centre to reconsider its decision to remove the additional duty on apples, walnuts and almonds imported from the US, saying the government should try to make its own people happy instead of pleasing foreigners.
PTI