Indian Prime Minister Narendra Modi recently visited the United States. During his stay, the two nations agreed to resolve six long-standing disputes at the World Trade Organization (WTO). U.S. steel news outlets watched this exchange particularly closely. This is because one of the subjects of debate was India’s imposition of retaliatory tariffs on U.S. products, including steel. Many analysts expect this development to stimulate trade between the U.S. and India while offering crucial tax benefits to Indian exporters.
According to a report in The Economic Times, U.S. Trade Representative Katherine Tai recently confirmed that India would remove the retaliatory tariffs it imposed in response to the U.S. Section 232 national security measures on steel and aluminum.
India’s Commerce Minister Piyush Goyal also confirmed these reports. Specifically, he mentioned that Mr. Modi’s visit to the U.S. led to a “significant” announcement from President Joe Biden and other high-ranking officials. In the announcement, Biden assured markets that most of India’s imported steel and aluminum products would not suffer additional scrutiny.
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Indian and U.S. Steel News Outlets React Positively
So far, Indian experts seem to feel that excluding most Indian imports from additional scrutiny will prove a welcome relief for businesses. After all, the country is a major exporter of steel and aluminum products to the U.S. Earlier, to protect its domestic industry, the U.S. had imposed tariffs and trade restrictions on steel and aluminum imports from various countries, including India. With this new decision, the industry hopes to see a positive shift in the United States’ approach to trade relations with India.
The two countries plan to resolve the disputes through mutual agreement and subsequently inform the WTO in Geneva about the resolution. This is crucial considering the sheer volume of trade between the two nations. Indeed, the bilateral goods trade between India and the U.S. experienced a rise to $128.8 billion in 2022-23 from $119.5 billion in 2021-22. Moreover, many analysts expect these tariff cuts to reinstate and expand market opportunities for American agricultural producers and manufacturers.
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The Move Ends Five Years of Harsh Tariffs
According to a news report in BusinessWorld, under the newly established market access agreement, the U.S. Department of Commerce will approve 70% of steel and 80% of aluminum applications for products originating in India. It will be the importer’s responsibility to submit applications on behalf of the exporters through the Section 232 exclusion process.
In 2018, the U.S. implemented import duties of 25% on specific steel products and 10% on certain aluminum products. At the time, officials cited concerns related to national security. In response, India imposed customs duties on 28 American products. India also lodged a complaint against the U.S. at the WTO concerning the imposition of these duties.
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