US tariffs' fallout: Inter-ministerial panel formed to monitor imports

This is because the United States (US) has imposed higher reciprocal tariffs on these countries as compared to the 26 per cent tariff it plans to impose on India

The Centre has set up an inter-ministerial panel to closely monitor imports hitting domestic shores, amid fears of diversion of shipments from neighbouring nations such as China, Vietnam, Thailand and Indonesia towards India, people aware of the matter said.

 

This is because the United States (US) has imposed higher reciprocal tariffs on these countries compared to India’s 26 per cent.

 

As much as 34 per cent tariff will be levied on China, 46 per cent on Vietnam, 32 per cent on Indonesia and 36 per cent on Thailand.

 

Last week, US President Donald Trump said that country-specific reciprocal tariffs will be imposed on 60 countries with which Washington has the largest trade deficits. The reciprocal tariffs are set to come into force from April 9.

 

“The inter-ministerial panel will include officials from the commerce and industry ministry, finance ministry and product-specific respective line ministries. The idea is to keep a close eye on imports under the current circumstances, study the changes in the pattern of movement of goods and come up with counter measures as and when required,” the person cited above told Business Standard.

 

“Till now, the government would receive feedback from the export promotion councils and industry representatives and had taken action accordingly. However, considering the (reciprocal) tariffs being imposed by the US, India needs to be alert with respect to any kind of diversion of goods from neighbouring countries over the next few months,” the person said.

 

In the past, the commerce department maintained that India has a strong institutional mechanism to prevent dumping of goods from China, with the Directorate General of Trade Remedies (DGTR) ensuring that an effective anti-dumping system is in place.

 

Another government official said that India can take World Trade Organization (WTO)-compatible action, as and when required.

 

According to a CareEdge report, broad categories that may see an upsurge in diversion of imports from the US to India include consumer goods, electronics, chemicals and steel.