A new dispute has emerged amid the ongoing trade negotiations between America and India. The US Trade Representative (USTR) has proposed to impose an additional 12.5% import duty on 54 countries including India. If this decision is implemented, it may become expensive for Indian exporters to do business in the US market. This is expected to affect many industries in India.
In fact, America alleges that many countries have not effectively banned the import of such products, which are allegedly produced with forced labor. USTR says this leaves American companies and workers facing unequal competition on a global scale. For this reason America had started investigation of 60 countries. After investigation, a proposal has been made to bring 54 countries including India under the ambit of extra tariff.
India rejected the allegations
India has vehemently denied the American allegations. India says such issues should be resolved through bilateral trade negotiations. The Indian side has also demanded America to end the investigation process. Let us tell you that negotiations are going on on the trade agreement between India and America, hence several rounds of discussions may take place between the two countries before the final decision is taken.
Which countries will be affected?
Apart from India, names of big countries like China, Japan, Brazil, Australia, Britain and Saudi Arabia are also included in this list. The US says that these countries have not taken sufficient steps to stop the import of products made with forced labour. You should know that America is considered to be India’s largest export market. If the additional 12.5% tariff is implemented, products from textiles, engineering goods, chemicals and many other sectors may become costlier in the US market. This may make it difficult for Indian companies to do business there and their exports may also be affected.
What will happen next?
USTR has sought suggestions on this proposal. There will also be a hearing on this matter in July. In such a situation, till the final decision is taken, Indian industries and exporters are keeping an eye on America’s next step. If negotiations between the two countries are successful, then this possible duty increase can also be avoided.
SK Sharma is a content writer who writes on news, entertainment, and lifestyle topics. She has over four years of experience and is known for conveying information in simple and clear language.
