The Department of Commerce has requested the finance ministry to extend the deadline to impose higher duties on 29 goods imported from the US by another month.
The department is also considering sending a delegation to hold talks with the US Trade Representative (USTR) as the trade package that the two sides were negotiating fell through due to Washington terminating preferential treatment to Indian exports earlier this month.
“The commerce department has requested the department of revenue to extend the deadline by one more month,” said an official in the know of the development.
India has extended the deadline multiple times despite announcing it in June last year in the hope of resolving its trade issues with the US including the Generalised System of Preferences (GSP), agriculture and dairy to medical devices and telecom.
These levies had been proposed in response to the US raising duties on steel and aluminium imports from India and other nations last year.
The department had weighed the option of allowing retaliatory tariffs on 29 American goods to kick in from April 1, after the US announced the withdrawal of special duty benefits available to $5.6 billion of Indian exports on March 5, which would come into effect after 60 days.
Exports of organic chemicals, nuclear reactors and electrical equipment are expected to get hit by the withdrawal.
The official added that to resolve the impasse, India may send a delegation to Washington.
“The last offer made to the US was in late February, before it announced the GSP withdrawal,” said another official privy to the details.
India said GSP withdrawal will not have a major impact on bilateral trade, citing the low level of exports under the concessional regime and the duty foregone by the US would be in the range of $190-250 million.
Though India has maintained that retaliatory tariffs are a separate issue from GSP, a trade expert said: “There can be no talks with the US without a discussion on GSP. There are at least five product categories including organic chemicals and auto components where exports are above $500 million, and other set of items where the GSP rate is above 5% which exporters can’t absorb”.
Trade bodies and the Federation of Indian Export Organisations have asked the government to come out with a scheme to protect such exporters.
Source : Economic Time