India mulls tit-for-tat tariffs after US revokes preferential trade treatment


  • India is mulling the imposition of retaliatory tariffs on nearly 30 products that are imported from the US.
  • This comes a day after the Trump administration decided to revoke India’s duty-free trade exemptions under the Generalised System of Preferences (GSP) programme.
  • The move will impose an additional tariff burden of $290 million on US imports.

A day after the Trump administration decided to revoke India’s duty-free trade exemptions under the Generalised System of Preferences (GSP) programme, India is responding with the same measure that caused the revocation in the first place: tariffs.

India is mulling the imposition of retaliatory tariffs on nearly 30 products that are imported from the US, according to media reports. The products include walnuts, chickpeas and chemical goods.

The move will impose an additional tariff burden of $290 million on US imports. They were initially planned to be enforced last year after the US increased duties on steel and aluminium imports but were deferred amid US-Indo trade talks.

While the removal of trade benefits under the GSP programme was predicted to hurt nearly $5.6 billion worth of Indian exports, India's commerce secretary Anup Wadhawan said the damage would be minimal, impacting only $190 million worth of trade benefits.

India’s tariffs on its largest trading partner could go into effect from April 1st, which means they will be imposed before the expiration of the 60-day period for the GSP removal to take effect.

If the retaliatory tariffs are enforced, the Trump administration’s plan to scare India into reducing its tariffs would have essentially backfired. The impetus behind the plan to end India’s preferential treatment was to achieve more equitable access to its markets.

However, despite the tit-for-tat tariffs, India’s relationship with the US isn’t in immediate danger. The US’s plan to reduce its trade deficit with India in the near term will be given a boost with India’s purchases of crude oil.


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