India is all set to increase the tariffs on the US imported good as a retaliatory measure against the withdrawal of vital trading privileges to India from the US.
India is the prime trading ally of the US, allows the export of goods worth 5.6 billion USD to the US on a duty-free basis. But, under the Generalized System of Preferences (GSP) initiated by President Trump in early June, the trade benefits to India would be lost.
In line with the revised US policy, India is likely to increase import tariffs on almonds, apples, and walnuts significantly. India is by a wide margin the biggest purchaser of US almonds, paying 543 million USD for the greater part of US almond sends out in 2018, as indicated by the US Department of Agriculture information. It is additionally the second biggest purchaser of US apples, bringing in 156 million USD worth in 2018. The Indian government had already referred to the US preferential system as unfortunate and indicated that the national interest would be their utmost priority.
The Indian increment in tariffs for US goods was long overdue as they planned to impose tax up to 120% on several items since June 2018. But the decision was delayed due to ongoing trade-related dialogues.
US has notified India that any increment in taxes in response to the GSP would be inappropriate as per the rules of World Trade Organizations.
The two countries are believed to be strong political and economic partners. It was also observed that the US was considering to move the manufacturing units of iPhones from China to India amid the escalated trade war with China over the 5G issue.
US Secretary of State Mike Pompeo, who is relied upon to visit India this month, said for the current week that the US was available to exchange with India by permitting US firms more access to Indian markets.