Trade war's battle lines drawn: Apples, lentils in India's hurt list for Donald Trump

64690730 From lentils to path lab reagents, India’s retaliatory tariffs seek to protect farmers and boost domestic industry equally. At a time when the US has a bumper crop of lentils, that it grows specifically for the Indian market, New Delhi has imposed an additional 10% duty to protect its market from oversupply and a price push down since domestic farmers too have a reasonably well crop this time.Similarly, diagnostic reagents which are used in blood tests, are tied to the respective machine that uses it. This market for machines is dominated by American and German players, which would get impacted by the move, said experts. This comes at a time when India is trying to cap the prices of medical devices in an effort to make healthcare affordable to public.“The list of products where the customs duties have been increased appear to be carefully calibrated and cover both agricultural and industrial products relevant to Indo-US trade,” said MS Mani, Partner, Deloitte India. Another example is boric acid, a key chemical used as an antiseptic, insecticide or a flame retardant, in virtually every chemical industry.“It is a signal that India is willing to increase duties on other such important chemicals as well. We are hitting where it hurts the most,” said an industry expert requesting anonymity.TARIFF RATES VS EFFECTIVE RATESExperts say the government has increased the tariff rate for certain products while keeping the effective rate unchanged. This means American apples will be subject to a 75% duty while apples from other countries continue to pay 50% tariff because India has revised the old tariff rate of 50% and made it 75%.While tariff rates are those which are specified in the Customs Tariff Act and usually tweaked in the Budget, effective rates are the actual duties levied. Effective rates are a tool to be used in case of specific countries and goods. “The government has this time increased the tariff rate, kept the effective rate unchanged and then said that the effective rates are not applicable to the US,” said an expert on indirect taxes.Metallic SIM sockets for use in manufacture of cellular mobile phones coming from the US would be subject to a 25% import duty whereas other countries would pay 10% as the tariff rate has increased from 15% earlier to 25%.

from The Economic Times https://ift.tt/2IfGYjh