INDIA PROPOSED 15% RETALIATORY TARIFFS ON UK LIQUORS, CASTS DOUBTS ON FREE TRADE DEAL
By Siulan Law Mathews DipWSET
Credit: Naveed Ahmed/Unsplash
India has proposed to levy retaliatory tariffs of 15 percent on 22 British goods, including Scotch, blended whisky, gin, and cheese to retaliate against UK’s decision to impose protectionist safeguard measures on 15 steel products.
The trade war casts doubts on the possibility for India and the UK to arrive at a free trade agreement by Diwali which will fall on 24 October this year.
The dispute started after UK move to extend safeguard duty and quota restrictions, originally applied by the European Union, on the import of 15 steel products with an out-of-quota duty of 25 percent until 2024.
India has raised concerns on UK’s move to the World Trade Organisation (WTO) claiming that the safeguard measures breached WTO rules and have resulted in the decline of Indian steel product exports to the tune of 219,000 tonnes.
Both countries has held virtual consultations on 5 August to discuss the issues, but no compromise has been achieved.
In a 27 September communication to the WTO, India said it will slap retaliatory tariffs on UK goods entail a duty collection of USD247.7 million.
“India’s proposed retaliatory measure would result in an equivalent amount of duty collected from products originating from the UK,” India wrote in the communication.
The products that would attract retaliatory tariffs by India include scotch, blended whisky, gin, cheese, animal feed, liquefied propane, select oils, unsorted diamonds, silver, platinum, semi-diesel engine parts, unwrought gold, turbo jets, and certain electric conductors.
India is currently levying a 150 percent tariff on liquor products, an additional 15 percent retaliatory duty will mean that UK spirit producers exporting to India will have to pay tariffs of 165 percent.
The two countries are reportedly in the final stage of negotiating a free trade agreement which will see tariffs for UK wine and liquors substantially reduced from the current 150 percent.
Reports also said UK is keen to conclude the free trade agreement before Diwali this year, with the trade dispute unfolding, it is not sure whether the agreement can be sealed by then.
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