India will continue to grow its exports to the US and leverage the large opportunity as long as it has tariff advantage or comparable duties against its competitors, Commerce and Industry Minister Piyush Goyal said in response to a question on imposition of 10% Section 301 duties.
The US has imposed extra duties on 60 countires including India after an investigation into the import of products made with forced labour that are used as inputs in goods exported to America.
“Section 301 investigation is a process that is being run by the US Trade Representative (USTR). We participated in that. They have imposed some tariffs under one investigation. Others are under discussion,” he said after delivering the JRD Tata Memorial Lecture organised by Assocham.
The investigation for import of products made with forced labour was launched on March 12 under Section 301 of the Trade Act of 1974. The report of the investigation came on June 2, which recommended tariffs ranging from 10-12.5% on all 60 economies. Following public hearings and consultation, the US Trade Representatives Jamieson Greer published the final findings confirming the tariffs.
Other than the forced labour issues, the office of the USTR is also investigating policies of India, China, EU, Singapore, Switzerland, Japan and nine other economies that enable excess manufacturing capacities and end up hurting American businesses. This investigation could lead to additional tariffs.
“The India-US interim trade agreement would come into operation as soon as the US is able to ensure that we get a comparative advantage over our competitors, the countries in our neighborhood, the countries in the Asean region and other countries with whom we compete,” Goyal said. The framework of the interim trade deal was finalised in February.
Meanwhile, a Bill that could bring back tariffs related to Russian oil purchases has made progress in the US Senate.
According to the Department of Commerce, an estimated 45% of India’s exports to the US remain outside the purview of the additional 10% Section 301 duties and the 55% of exports will attract the additional 10% duty, which is lower than that for most other economies covered by the forced labour investigation.
A substantial share of India’s exports to the US, which currently attracts zero additional duties, such as generic pharmaceuticals, smartphones and certain other specified products, continues to remain outside the scope of the additional 10% duty, the statement said.
Products already covered under Section 232 measures, including steel, aluminium and auto parts, are not subject to the additional 10% duty.