In a significant diplomatic move, India has decided to remove retaliatory customs tariffs imposed on various American goods, including almonds, apples, walnuts, and lentils, effective from September 6, 2023. This strategic decision comes just two days before U.S. President Joe Biden’s arrival in New Delhi for both bilateral discussions and the upcoming G-20 Summit.
The roots of this decision trace back to June 2019 when India responded to the United States’ increase in customs duties on specific steel and aluminum products by raising import duties on 28 American items. However, in a recent notification, the Indian Finance Ministry justified its action by stating it was “necessary in the public interest” to revoke certain tariff hikes.
Key products affected by these tariff changes include chickpeas, lentils (Mosur), almonds, walnuts (in shell), and apples, as highlighted by Abhishek Jain, indirect tax head and partner at KPMG.
In particular, American walnuts faced a substantial tariff increase, rising from 30% to a staggering 120%, while tariffs on chickpeas, Bengal gram (chana), and masur dal were elevated from 30% to 70%. These tariff escalations had been in place for several years, contributing to trade tensions between the two nations.
This significant shift in India’s trade policy comes on the heels of a successful State visit by Prime Minister Narendra Modi to the United States in June 2023, during which both nations committed to resolving long-standing bilateral trade disputes. The agreements reached during this visit included unwinding the tit-for-tat tariff hikes on specific U.S. exports, such as walnuts, almonds, and apples, that had been in place for years.
The Almond Board of California (ABC) expressed its approval of India’s decision. ABC welcomed the removal of retaliatory tariffs, highlighting that the import duties on almond shipments to India will now revert to ₹35 per kilogram on inshell almonds and ₹100 per kilogram on almond kernels. Previously, India had set the applied tariff rates on U.S. almonds at ₹41 per kilogram on inshell almonds and ₹120 per kilogram on almond kernels.
Julie Adams, vice-president for technical and regulatory affairs at ABC, conveyed the industry’s delight, emphasizing how this move would boost demand in India while reducing costs for consumers. Adams also underlined the ongoing efforts between the almond industry and government officials to further enhance export conditions, specifically addressing tariff-related issues and technical barriers.
This development not only marks a positive shift in India-U.S. trade relations but also reflects the potential for enhanced economic cooperation between the two nations as they prepare for crucial discussions during President Biden’s visit to India and the upcoming G-20 Summit.
