US seeks removal of tariffs on American apples imported by India

Kashmiri apples (2020 Photo via Wikimedia Commons 4.0)

The lawmakers from the US State of Washington have urged the Biden administration to help remove or reduce the tariffs on American apples imported to India as the country's fruit industry has incurred significant losses due to India's retaliatory measures.

In a letter to US Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo, all members of the House of Representatives from Washington State and other two senators said the tree fruit industry suffered losses due to India's retaliation to US tariffs.

Also Read: India’s current account deficit, now at a decadal high of 3%, may reduce this year

On average, 30 per cent of the apples, cherries, and pears produced in the Pacific Northwest are exported and India was once a strong market. With retaliatory tariffs in place, Washington state apple growers have continuously lost market share in India, according to a PTI report.

Before the implementation of these tariffs, India was our number two export market, valued at $120 million annually. Last season, growers exported fruits barely worth $3 million. As growers have watched hard-earned market share and sales evaporate, their competitors in other countries have gained more of the market share, they said.

The lawmakers in their letter dated January 10, urged Tai and Raimondo to raise the issue with visiting Indian Commerce and Industry Minister Piyush Goyal. The India-US Trade Policy Forum (TPF) meeting was held on January 11.

"The damage inflicted by the retaliatory tariffs on tree fruit growers, their employees, and communities is clear and a solution is long overdue. On behalf of the many stakeholders throughout our region, we appreciate your attention to this matter," the letter said.

"Following the TPF, we request that you meet with members of the Pacific Northwest tree fruit industry to discuss the next steps to remove the retaliatory tariffs," it said.

According to the lawmakers, continued export losses coincide with the ongoing cost-of-production increases that are forcing multi-generational family farms out of business.

The 'Red Delicious' variety accounts for nearly all the exports to India. Families operating legacy 'Red Delicious' orchards, many of whom may not have the financial capacity to modernise their orchards, are disproportionately affected by the tariffs, the lawmakers wrote.

This year the 'Red Delicious' crop is the lowest since 1968. Corporate, out-of-state, entities are acquiring and consolidating larger operations, while smaller farms simply go out of business, as per the report.

Meanwhile, official data released last month showed India’s current account deficit widened to $36.4 billion or 4.4 of GDP in the third quarter of 2022 from $18.2 billion or 2.2 percent of GDP in the second quarter.

The deterioration in the current account deficit was driven by a widening in the goods trade deficit due to a fall in exports. While exports are likely to drop further as the global economy heads into recession this year, imports to also weaken as commodity prices ease back in the next few months and as domestic demand softens, according to economists.