Business Wire IndiaThe Impact of India imposing higher tariff on the import of health products
India was yet to absorb the tariff hike on walnuts and almonds of May 23, and there came another jolt of increased standard tariff for agricultural goods. Apples, almonds, pulses, and walnuts are to face a major burden of this trade war and industry is finding it challenging to function in this unstable arena.
India and its WTO commitments
India is believed to have punched U.S. with this tariff hike against the WTO notification, which was to get enforced within June 21 deadline date. Further, India has also surpassed its WTO bound rates too. However; there are numerous drawbacks on the Indian side
for placing such high import duties:
- Unreasonably higher prices for consumers,
- Food processing industry will face higher production cost,
- Loss of employment for those engaged in direct and allied sectors,
- Escalating international trade tensions have started damaging confidence among companies, threatening the global economic expansion.
Though, the implementation period gives room for negotiation between the two countries but, Indian trade and consumers will face the real brunt on ground as this ambiguity was floating since quite some time leading to a price hike at every stage.
Mr. Amit Lohani, Founder Director, FIFI said, “This is the time when purchases are made for the festive season but, the industry is holding on with their orders waiting for more clarity. Indian consumers will either buy fewer health products if prices were to raise to commensurate the increasing tariffs or will be compelled to pay huge prices.” He also said, “If these tariffs will be implemented then industry may have to renegotiate deals and find new suppliers. Few will gain and majority will lose that is why we as association urge that tariff increase should be revoked making the environment conducive for both industry and consumers."
Indo Afghan Chamber of Commerce was quoted saying, “New import customs duty rates on walnuts, will hurt the consumer and the legal trade community, it will reduce the revenue in the longer run. The step to impose this extremely high duty should have been taken after doing more research and homework.”
What’s in store?
||49/2018 wef from Aug 4
|Effective Duty on all other Exporting Countries
||Effective Duty on Goods from U.S.(BCD)
|0511 99 11
|0713 20 10
|0713 20 20
|0713 20 90
|0713 40 00
|0802 11 00
|0802 12 00
|0802 31 00
|0808 10 00
If tariffs are increased then consumers will face the impact as domestic supply may not be able to make the ends meet. In this case, domestic suppliers will increase prices and cause inflationary pressure on the consumers. Leading economists believe that trade wars could subvert market leading to uncertainty and can put a non-mendable dent in the relationships.