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New Delhi: Washington, D.C.-based US and New Delhi relations come into renewed uncertainty following the proposal by the United States of new tariffs on India and a number of other countries. The transfer occurs as talks are ongoing between the two countries. The shift comes as negotiations for a potential trade pact between the two countries stay on.
India is on the list of 60 economies that could be hit with a fresh wave of import taxes under Section 301 of the 1974 U.S. Trade Act, reported U.S. Trade Representative (USTR). This investigation in particular was based on existing evidence and focused on the issue of effectiveness in the implementation of measures to prevent the import of forced labour of goods. However, USTR found that a number of countries, including India, have not taken sufficient steps to implement these restrictions.
In response, the U.S. has proposed a 10% to 12.5% additional tariff on goods coming in from these nations. If it is approved, India is expected to be one of the countries that will have to pay the higher tariff rate of 12.5%.
According to the U.S. government, products made from forced labor put competing products at issue, which impacts U.S. workers and businesses. The proposed tariffs are meant to spur improved global labour rights and fair trade, officials say.
This is because India and the U.S. are negotiating a trade agreement that seeks to enhance India’s market access as well as trade barriers reduction, a deal that is being emphasized by the timing of the announcement. Both sides have been making advances, it is reported, with high officials still meeting to hammer out an agreement.
The proposed tariffs may prove to be an issue that can be a major concern in these talks, according to trade experts. India may ask for an exemption from extra duties as higher duties may impact exports, and make products less competitive in the U.S. markets.
The tariffs have so far not been imposed, though. The proposal is open for public comment and USTR will hold hearings before deciding on a final action. This allows for discussion, negotiation and perhaps changes if they need to be made before any new duties come into effect.
As of now, India businesses and exporters will be keenly following the developments. The results of the ongoing negotiations could have a significant impact on whether India will ultimately be slapped with this extra tariff and/or receive a lift-off based on a comprehensive India-U.S. trade pact.
English (US) ·