Industry and government sources say US business and diplomats are pressing India to cut tariffs, after New Delhi's move to increase customs duties on dozens of products to help its flagship Make in India drive aggravated differences over trade. Ford, which has two plants in India, has sought a reversal of the new tariffs on auto components, While Apple Inc is concerned its iPhones have become even more expensive in the price-conscious $10 billion smartphone market.
A US State Department spokesperson said India must lower trade barriers, which were holding back economic ties. US President Donald Trump has already called out India on its duties on Harley-Davidson motorbikes, and this month, PM Modi ordered them cut to 50 per cent from 75 per cent for high-end bikes. However, that has not satisfied Trump, who pointed to zero duties for Indian bikes sold in the US. He said he would push for a “reciprocal tax” against countries, including US allies, that levy tariffs on American products.
“It is important that India make greater efforts to lower barriers to trade, including tariff and non-tariff barriers, which will lower prices to consumers, promote development of value chains in India,” the State Department spokesperson said.
India announced higher import tax on electronics products such as mobile phones and television sets in December, and then on 40 other items in the budget this month. The goods included sunglasses, juices, and auto components. India said the movie is aimed at giving local industry the chance to grow and is part of a broader plan to lift the share manufacturing makes up of GDP to a quarter, from around 15 per cent, and create the tens of thousands of jobs needed for a young workforce.
