US unlikely to offer India exemption from metals tariffs

Industry News | | MIC Customs Solutions |

Indian efforts to secure an exemption from US metal tariffs ahead of a visit to Washington by prime minister Narendra Modi are unlikely to succeed, sources have said.

Efforts by India to secure an exemption from tariffs on shipments of key metals products to the US are unlikely to be successful as Washington has shown little interest in reaching a deal on the issue.

According to sources familiar with the discussions, representatives from New Delhi have raised the issue with their US counterparts and signaled willingness to lift some of their own trade barriers in return, but have met with a cool reaction, Reuters reports.

The issue relates to tariffs of 25 percent on all steel imports and ten percent on aluminum products that were imposed by the US in 2018 under the leadership of president Donald Trump.

These were enacted under Section 232 of a 1962 trade act that allows presidents to add tariffs to certain items on national security grounds. This reasoning has been rejected by a World Trade Organization panel, which declared the duties in violation of international trade rules earlier this year, but the US has shown no signs of giving way.

Hopes among trade partners that the tariffs would be removed under president Joe Biden have not been realized, but Washington has issued exemptions for some of its key allies, including the EU and UK. India's government had sought a similar exception, but its offers are said to have been rejected.

"India has raised the issue but they've been turned down fairly quickly by the US team, so it isn't in serious consideration right now," a US source told Reuters. "US officials have been very clear with India in meetings that they are not considering an exemption for India on Section 232 tariffs."

To help the process, India had offered to remove a series of retaliatory measures it imposed on US imports in response to the metals tariffs. These include duties on agricultural goods such as almonds and walnuts. However, this has not altered the US' stance.

Indian prime minister Narendra Modi is set to visit Washington later this month and easing trade restrictions is expected to be on the agenda in talks with President Biden. 

However, the US steel sector strongly supported the tariffs in congressional hearings this week, with president of industry trade group the American Iron and Steel Institute Kevin Dempsey telling Reuters he did not think the US government would agree to withdrawing the duties.