India hits back at US, hikes import duty on 29 products

India has increased customs duty on 29 products, including pulses and iron and steel products, imported from the US as a retaliatory action against the tariff hike by Washington.

The duty hike would come into effect from August 4, the finance ministry said in a notification.

With the United States adopting protectionist policies and hiking import duties, a trade war like situation has emerged. The European Union has decided to levy higher import duties on a variety of US products and a similar action is being contemplated by China.

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

Shelled almonds imported from the US will now attract import duty at Rs 120/kg as against Rs 100/kg earlier. Almonds in shell will attract import duty at the rate of Rs 42/kg as against Rs 35/kg.

Import duty on walnut in shell will attract customs duty at the rate of 120% as against 30% earlier. While apples will attract import duty of 75% as against 50% earlier.

The duty on boric acid has been hiked to 17.50%, while the same on phosphoric acid has been raised to 20% from 10% each earlier. Import duty on diagnostic reagents has been doubled to 20%, while binders for foundry moulds has been hiked to 17.5%.

Flat rolled products on iron has been raised to 27.50% from 15% earlier, while certain flat rolled products on stainless steel would now attract 22.50% duty as against 15% earlier.

Duty on artemia, a kind of shrimp, has been raised to 30%. Last week, India had submitted to the WTO a list of 30 items on which it proposed to raise customs duty by up to 50%.

In the notification, there is no mention of duty hike on motor cycle with engine capacity of over 800cc.

As per the list India submitted to the WTO, it had proposed to hike customs duty on specified motorcycles, which primarily include Harley Davidson and Triumph, to 50%.

For automobiles and earth moving equipment, SIM socket/other mechanical items (metal) for use in manufacture of cellular mobile phones, the duty has been hiked to 25% from 15% earlier.

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

“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.