India’s removal of duties on apples & walnuts in response to US' removal of tariffs on steel: Commerce ministry

Import of apples from the US decreased sharply from USD 145 million (127,908 tonnes) in 2018-19 to only USD 5.27 million (4,486 tonnes) in 2022-23. (Representative Image)

India’s reduction of import duties on agricultural products from US, including on apples and walnuts has come in response to US’ reduction of duties on steel imports from the country, commerce officials said on September 12.

India and the US had during Prime Minister Narendra Modi’s state visit to the US between June 21 and June 23, resolved six of the total seven disputes at the World Trade Organization (WTO) bilaterally during the Indo-US state visit. The last and final dispute was resolved during US President Joe Biden’s visit to India for the G20 presidency last week.

The seven WTO disputes had been filed by India and the US over a decade, representing certain key sectors of the economy such as steel, aluminium, renewable energy, solar products, and other key export-related measures.
The US and India had a number of disagreements on trade in recent years, including a dispute over steep steel and aluminum tariffs imposed by the US in 2018.

In 2018, the US imposed 25 percent and 10 percent import duties on certain steel and aluminium products, respectively, on grounds of national security.

In retaliation, India in June 2019 imposed customs duties on 28 American products, including chickpeas, lentils, almonds, walnuts, apples, boric acid, and diagnostic reagents. India had also filed a complaint against the US in WTO on imposing these duties.

“The US is allowing these imports from India without paying the extra 25 per cent and 10 per cent duties in return for New Delhi's decision to remove retaliatory duties on eight American products like apple and walnut,” Additional Secretary of the commerce ministry Peeyush Kumar clarified addressing the media on September 12.

The US, on its part, has agreed to provide greater market access to certain Indian steel and aluminium products, a development which would help increase outbound shipments of these goods.

Further talking about removal of an additional 20 percent duty on US apples and walnuts, the additional secretary said that the move would not impact local players. “The government has sufficient policy space to support growers if there is any implication of the move… Only the additional duty has been removed and the basic duty of 50 per cent will continue besides the minimum import on apples,” Kumar said.

Import of apples from the US decreased sharply from USD 145 million (127,908 tonnes) in 2018-19 to only USD 5.27 million (4,486 tonnes) in 2022-23.

It indicates that the market share of the US apples was taken by other countries due to imposition of additional retaliatory duty on American apples, as the imports from countries other than the US increased from USD 160 million in 2018-19 to USD 290 million in 2022-23.

The US's import share in the import market segment was taken by countries like Turkey, Chile, New Zealand and Italy.

Imports of walnuts dipped to 3,806 tonnes in 2022 from 8,663 tonnes in 2019. "In the last three years, the import of almonds has been about 233 thousand MT, while domestic production is only 11 thousand MT, and India is highly dependent on imports. Therefore, the removal of additional duties will now ensure fair competition among the countries which are exporting these products to India," a statement from commerce ministry read.

India-US set up joint monitoring mechanism

India and US have also agreed to set up a joint monitoring mechanism to enable domestic exports of at least 3.36 lakh tonnes of certain steel and aluminium products in a year to America without paying extra duties.
The commerce ministry had earlier said that the move would provide significant impetus to raise India's steel and aluminium exports by about 35 per cent.

"We will have a biennial meeting...We have requested steel and mines ministries to designate an officer from their side who will be talking to stakeholders and exporters that applications are being properly processed," Kumar said.

If Indian exporters would face any bottleneck or problem, it would be conveyed to the commerce ministry and will be taken up with the US during the meetings of the joint monitoring mechanism (JMM), he added.

As a goodwill gesture, the US started approving applications for the import of these items from January this year because the two countries were talking about mutually ending the trade disputes at the World Trade Organisation (WTO).

"On the exclusion part, applications of minimum 3.36 lakh tonnes of steel and aluminium per year will be permitted...This is the minimum quantity, they can approve more also... the US allowed imports from some tested players," he said.

(With inputs from PTI)